Making use of New Jersey legislation, the United States District Court for the Southern District of Florida has held that an insurer experienced no duty to defend or indemnify an insured’s subsidiary for the reason that the auditing providers at situation did not cause the policy’s insuring agreement where the products and services ended up not carried out “for economic institutions” as needed by the policy’s definition of “management consulting products and services.” ECB United states, Inc., v. Chubb Ins. Co. of New Jersey, 2022 WL 611536 (S.D. Fla. Feb. 25, 2022). The Courtroom also reformed the policy to include the insured’s subsidiary as an insured based on the parties’ intent in negotiating the coverage.
From 2002 to 2019, the insured taken care of professional legal responsibility insurance policies providing specified coverage for promises related to “management consulting products and services,” defined as “services directed toward experience in banking finance, accounting, threat and units examination, style and implementation, asset restoration and approach setting up for monetary institutions.” A subsidiary of the insured was sued in connection with the auditing of money statements, and it tendered the lawsuit to the insurer for coverage under the plan issued for the 2017-2018 policy period of time (the “2017-2018 Policy”). The insurance provider denied coverage on the foundation that the alleged auditing companies ended up not “management consulting services” as outlined beneath the 2017-2018 Plan, and thus the claim did not fall inside the scope of the 2017-2018 Policy’s insuring settlement.
In the coverage litigation that adopted, both equally the insured and the insurance provider moved for summary judgment. In addition to asserting that the claim did not allege “management consulting solutions,” the insurance company argued that the subsidiary was not an insured less than the 2017-2018 Coverage, despite currently being insured in earlier many years, for the reason that the 2017-2018 Policy was not intended to be a renewal of the prior year’s coverage. The insured, in change, argued that the auditing services at challenge fell within the definition of “management consulting services” and sought reformation of the 2017-2018 Coverage to contain the applicable subsidiary as an insured centered on the parties’ intent that the 2017-2018 Policy be a renewal of the prior year’s plan.
The Court granted in element and denied in portion the motions of both equally sides. The Court held that the get-togethers intended for the 2017-2018 Plan to be a renewal of the previous procedures issued to the insured, and for that reason the Court docket reformed the 2017-2018 Coverage to involve the subsidiary as an insured. Nevertheless, the Court concluded that the insurance provider did not have a responsibility to protect or indemnify the subsidiary for the lawsuit. The Court discussed that despite the fact that the economical auditing at situation experienced as “accounting” products and services within the that means of “management consulting providers,” all those solutions were being not executed “for fiscal institutions” as was also expected beneath the Policy’s categorical definition of that expression. The Courtroom held that the “for economical institutions” requirement used to each of the solutions established forth in the definition, which include “accounting.”