This is a really, really important question, for to get this wrong could be the difference between coverage afforded and coverage voided.

I’m writing this article in response to a guest post on the D&O Diary entitled “Dealing with Potential Claims Under Claims-Made and Reported Policies“ by Chris Quirk. In this article Quirk examines a court decision that, interestingly enough, I also examined and wrote about, also published in the D&O Diary. My article “Wait, YOU Also Wanted Coverage? Why Didn’t You Say So!“ examined the same case, albeit I draw a very different conclusion from Quirk.

First I’ll recount the case before articulating the different conclusions Quirk and I drew. Then I’ll give my two cents as to why my conclusions are correct (sorry Chris!).

I do want to acknowledge at the outset: I am not a lawyer nor the son of a lawyer. I’m approaching this as a layperson who cares deeply about getting these questions right. Ultimately what’s at stake here are the insureds who may or may not get bad advice, act upon that advice, and expect coverage to come through for them when they need it most.

The Case

First, the case (as summarized in my original article):

Background: HRC Fertility is a fertility clinic management company. The underlying dispute involved allegations of wrongful termination and claims that individual physicians participated in various alleged kickback schemes, including arrangements with a pharmacy vendor that allegedly prioritized financial incentives over patient care.

The Timeline:

• 8/29/2018 – 8/29/2019: HRC Fertility’s D&O/EPL policy period

• 3/14/2019: Claimant, a doctor whose employment at HRC Fertility had been terminated, puts HRC on notice for wrongful termination. This notice was sent and accepted by the carrier. At this point, only the named insured was listed as the subject of a potential claim.

• 11/27/2019: 90 days from policy expiration comes and goes without any further developments.

• 12/4/2020: The claimant filed her action against the insured. It is here where the list of defendants expanded to include the individual doctors.

The carrier took an interesting coverage position that was upheld in court: the insured entity would be covered, but the individual insureds would not. Why? Because the insured never reported that the individual insureds were potentially going to be sued.

The court in this case (Evanston Insurance Company v. Frederick, 2025 WL 2019379 (C.D. Cal. June 12, 2025)) meticulously examined the reporting requirements as stated in the policy and concluded that the insured failed to report in a timely manner. Therefore the carrier was correct; the individual insureds were on their own.

As I pointed out in my original article: when the insured was put on notice, only the named insured was listed. It was not apparent that the claimant would later modify her suit and name the individual insureds. In order to have fully complied with the reporting requirements, the insured would have needed access to a time machine. Receive the 2019 notice, hop in, travel forward to December 2020 when the expanded lawsuit names the individuals, update the notice accordingly, travel back, and submit. Everyone covered. No problem.

A Correction to My November Article

I need to make one correction to my November article. I rhetorically asked, “Do related claim definitions only matter when it’s to the carrier’s benefit?” I noted that if the related claim definition had been applied, the insured could have argued that since the 2020 suit was related to the 2019 notice, coverage should be afforded to all insureds. I was perplexed that this argument didn’t seem to be fleshed out in any way, shape or form

Turns out the court did address this… and arrived at a baffling conclusion.

The carrier had already filed a motion, which the court granted, seeking a ruling that only one single policy limit applied because these claims were related.

Great, well the individual insureds should be good to go!

But when the individual physicians tried to use that same “one claim” logic to establish that the originally reported notice covered them too, the court responded:

“But again, the Policy plainly provides that each Insured must provide written notice of the Claim as a condition precedent to coverage.”

Why didn’t you guys predict that you were going to get sued?

I really don’t understand the court’s reasoning here, other than they took an uber-libertarian “the contract’s the contract” reading, tortured as it is, reasonable expectations be damned.

Having reread the court decision, I still conclude that the denial of coverage to the individual insureds was wrong.

Where Quirk and I Part Ways

Quirk draws a different conclusion. I recommend reading his article in its entirety, but this particular passage encapsulates his thesis:

“It is important to recognize that HRC Fertility’s predicament was, in a meaningful sense, self-inflicted.”

One of the points Quirk zeros in on is the court’s reading of the notice of circumstance provision, which requires written notice containing:

“…3. The identity of the Insureds who may be the subject of the potential Claim.”

Quirk correctly points out that the policy requires the insured to report the identity of insureds who MAY become the subject of the potential claim, and this insured neglected to do that. Their initial report only named the insured entity.

Can we acknowledge how insane this requirement is? This policy genuinely expects the insured to prognosticate how a claim may evolve, predict that individual insureds may get sued, and if their notice did not include those prognostications, then the carrier gets to leave the individual insureds out in the cold.

But regardless — Quirk is correct that the insured did not report who MAY become the subject of the potential claim, and therefore did not fully comply with the reporting requirement of the policy.

It’s Quirk’s assertion that this was “self-inflicted” where we part ways entirely.

How was it self-inflicted? Quirk explains:

“HRC was not obligated to file a notice of circumstances under this policy. Had it declined to file an NOC and instead reported the claim when it was actually made in December 2020, the then-current policy would have responded, and all insureds (including the individual defendants) would have been eligible for coverage under that in-force policy (subject, of course, to its terms and exclusions). By electing to file an NOC, however, HRC Fertility voluntarily subjected itself to a technical procedure that carried strict conditions, among them, the requirement to identify all insureds who might be the subject of the potential claim.”

This entire analysis is predicated on that very first sentence: the insured was not obligated to file a notice of circumstances (NOC) under this policy.

Given Quirk’s otherwise scrupulous analysis, I was disappointed that this assertion was not backed up by citations to the court documents. Was there something in the policy that specifically clarified the insured did not have to report?

Quirk later remarks, “Although NOCs are often optional, there are situations in which they become effectively mandatory.”

Often optional? Often, like — most of the time? I’m genuinely not sure where this assertion comes from. I would never advise anyone to consider not reporting a circumstance. And in this particular case, if the insured had decided to sit on the claim and wait, the results would have been even more devastating than having only the insured entity covered.

What HRC Actually Received

I had to dig into the actual court documents on this one.

On March 4, 2019 — ten days before the Acord was filed with the carrier — the insured received a formal demand letter from retained counsel. Attorney Steven Goldsobel of the Law Offices of Steven Goldsobel sent a five-page confidential settlement communication to Huntington Reproductive Center Medical Group and its counsel at Buchalter Nemer. The letter alleged:

• Wrongful termination in breach of the employment agreement

• Defamation — false statements to patients and in the community damaging the claimant’s professional reputation

• Retaliation — terminated for refusing to participate in and for reporting illegal conduct

• Breach of contract — immediate termination without the 60-day notice required by the employment agreement

• Lost wages and underpaid bonuses

• Emotional distress damages

• Punitive damages

Would Quirk seriously advise someone who received that letter to sit tight and wait to see if a lawsuit actually materialized?

Because that is precisely what “the NOC was optional” advice suggests.

If the insured had waited until December 2020 when the lawsuit was filed, the carrier would have been well within its rights to deny coverage entirely — for everyone, entity and individuals alike — based on failure to report a known circumstance. You cannot sit on a formal demand letter from retained counsel, renew your coverage, get hit with a lawsuit twenty months later, and then put the carrier on notice expecting coverage.

Quirk’s “self-inflicted” conclusion mistakes an execution failure for a strategic choice. HRC didn’t choose wrong when they decided to report. They chose wrong when they neglected to say that the other individual owners might also get sued.

That’s not a coverage trap created by filing a NOC.

The individual insureds lost their coverage not because their employer reported a potential claim. They lost it because their employer’s HR administrator apparently didn’t look into their crystal ball to see how the claim would evolve before reporting.

So what’s the moral of the story here?

Report. Always report.

Or don’t. Hamlet ended up dead anyways just like the insured individual’s efforts to get coverage.

This analysis is provided for educational purposes only and is based on publicly available court filings in Evanston Insurance Company v. Frederick, Case No. 8:23-cv-00882-FWS-KES (C.D. Cal.). It does not constitute legal advice. The facts described herein are drawn from court documents including the parties’ statements of uncontroverted facts and supporting declarations. Readers should not rely on this analysis as a statement of applicable law in their jurisdiction. For specific coverage questions, consult qualified coverage counsel.

Until next time agents, stay bindin and grindin 🫡

I was reviewing a directors & officers submission they just sent me. Good financials. Clean loss runs. So far so good. But one document caught my eye; a quick note regarding five open lawsuits against the insured.

I scanned the loss runs again to make sure they were clean. Yep, no losses, and the date showed that the loss runs were pulled pretty recently.

How does a company carrying D&O have five active lawsuits and 0 claims?

I went back to the agent. Turns out the insured never reported the claim. They weren’t sure if there would be coverage or not.

To be fair to the insured, this is a pretty common heuristic that many of us use when deciding to file claims. You ever dinged your car and asked, “should I report this? I need to check my deductible first. No reason to file and make my rates go up when I’m going to be the only one that pays anyway.”

It’s worth noting here that D&O insurance is very, very different from personal auto insurance, but I digress.

It’s what my agent said last that almost made me crap myself; “They didn’t want to report the lawsuits and start a claim.”

That’s…..not how claims work, at least not in claims-made coverages.1

And getting this wrong means; not only does the insured not have coverage for that particular matter, but ANYTHING that’s related to that particular matter will also be barred from coverage.

This is the coverage death trap, the claims-made black hole that insureds and agents alike unknowingly walk into. In this article we’ll break down how claims-made coverages ACTUALLY work and why you should always report claims, even if you think there’s no coverage.

Warning; this article is going to get technical, but if you’ll bear with me I promise you’ll see how ALL claims-made coverages have these particular black holes. By the end you’ll be able to walk through a claims-made policy and show why all known matters need to be reported immediately, without delay and as soon as practicable.

What is a claim?

Remember what this agent said; the insured didn’t want to report the lawsuits and start a claim?

Well buddy, I got news for you; the claim’s already started, and the time to report is ticking.

To illustrate, let’s look at a generic definition of a claim within a claims-made policy:

Ask yourself; when the insured was served a lawsuit, did this constitute a claim? Yes, a formal complaint was filed against them. And it doesn’t matter if the complaint demanded monetary or non-monetary damages, it’s still a claim.

But what’s really important for us, and something my agent missed, was the fact that the claim is deemed first made “...WHEN ANY INSURED FIRST RECEIVED NOTICE…”

The claim doesn’t start when the insured decides to report. The claim starts when the insured receives notice of a demand alleging the insured committed a wrongful act.

Speaking of wrongful act, what’s the typical definition of a wrongful act for a D&O policy. Is it pretty broad?

My goodness, that’s an INCREDIBLY broad definition. ANY actual or alleged….yes, the insured being sued for damages is most likely going to satisfy the definition of a wrongful act.

Ok, we’ve established that the D&O claim started when the insured receives the suit against them. Does the policy specify when they have to report it?

You bet it does:

You might read this and think, “Ok, well as long as I report before the end of the policy period I’ll still get coverage. Shoot, I can buy an Extended Reporting Period if I want to give myself even more time to think about it!”

2 things. First, “as soon as practicable”, means exactly that. Yes, technically you have until the end of the current policy period, but it’s not recommended that you use that because:

Secondly, the carrier might be prejudiced by your delay. That last part of the Reporting Provision is how carriers can deny claims even if you reported within the policy period. If they can demonstrate that your withholding the claim prejudiced them, then they’re off the hook.

Now we’ve established that:

Claims start when the insured becomes aware of the Wrongful Act Wrongful Act definition is exceedingly broad for D&O policies Reporting Provisions dictate that the insured must report said claim “as soon as practicable”

What happens when… the claim goes unreported?

It goes where all unreported claims go: the eternal abyss of coverage-less matters.

Unreported Claims —> Black Holes

“Lucas, I hear what you’re saying, and shoot, I guess the stuff we didn’t report just isn’t going to get covered. But the next time something develops we’ll definitely make sure that we report as soon as practicable.”

I’m glad, but unfortunately… those unreported claims didn’t just fall into the galaxy, drifting into oblivion all by themselves. Those unreported claims inadvertently turned into black holes affecting future claims in a way you nor your insured has appreciated.

I have 2 more definitions for us to review, perhaps the most important, consequential, and sadly overlooked parts of a claims-made policy. Please bear with me as we get a little bit more technical.

You can’t bring previously known matters to a current policy. This makes a lot of sense admittedly. In the same way that you can’t buy a fire insurance policy on a burned out building and expect coverage, you can’t purchase a D&O policy and expect it to respond to claims from previously known matters. This is important to mention in case anyone thought they could switch their D&O carrier and have it respond to the unreported claims. Seems obvious, but worth reiterating.

The last definition we’ll look at is a doozy. It’s the killshot that turns unreported claims from previously known matters into black holes that carve out coverage for future, unknown matters, something both the insured and the agent are most likely expecting coverage for.

Let’s say we have a mining company that carries a D&O policy. Due to their ignorance of how claims-made policies work they neglect to report to their D&O carrier that they received notice from an environmental regulatory agency that they’re being investigated due to alleged failures to comply with environmental regulations. The investigation takes months. Finally after a full year the agency concludes from their investigation that the mining company is in violation, and proceed to levy fines and penalties against them.

Shareholders of the mining company are incensed that the management team was operating outside of the bounds of the law, and through their negligence caused the company to incur fines and penalties that damaged their reputation and their return on investment. They bring suit against the management.

The management NOW decides to report this new claim, and is shocked to discover that the claim is being denied.

“Wait, this doesn’t make any sense! We reported the claim as soon as we were served. Why is this being denied?”

“Did you report the regulatory agency’s action against you as soon as practicable?”

“Well…no, we didn’t think there would be coverage.”

“Because you didn’t report the regulatory agency’s action against you in a timely manner, there’s no coverage.”

“That I understand, but this is a new claim, coming from new claimants, and we reported asap. What’s the deal?”

“This claim arose from a previously known matter that was never reported to us, and is barred from coverage. Per the definition of interrelated wrongful act, since this action taken by the shareholders is related to the regulatory agency’s action, the policy then bars us from covering this claim.”

Claims Made Death Trap Post Mortem

I want to note here that all of the definitions and provisions I made up here for the sake of this article exist in some way, shape, or form on each of your claims-made policies. That’s not just D&O policies, that also includes:

• Employment Practices Liability policies

• Fiduciary Liability policies

• Errors & Omissions policies

• Lawyers Professional Liability policies

• Insurance Agent E&O policies

• Anything and everything that is “claims-made”

This article began with the misnomer that claims start “when the insured reports”. Not only is that very, very incorrect, there’s an entire cascading effect that occurs when claims aren’t reported.

Unreported claim turns into a previously known matter.

All previously known matters are barred from coverage.

Anything Interrelated to that previously known matter is also barred from coverage

Ask yourself; does anyone appreciate the severity of these definitions put together? Forget the insureds; their job isn’t to read insurance policies. They purchase coverage expecting their carriers to protect them should any claims arise. Do they realize that previously known matters, should they meet the definition of a Wrongful Act, are not and will never be covered by any claims-made carrier?

Agents should know and appreciate these nuances, which again affect all claims-made policies. As uncomfortable as it may be, agents should consider how to disclose these coverage gaps to their claims-made clients:

1. At application— known matter disclosure review

2. At placement — reporting provision counseling, condition precedent explanation

3. At renewal — prior acts coverage gap audit

Remember that claims begin at receipt, not when the insured decides to notify the carrier.

Anytime the insured mentions receipt of action being taken against them for allegations of a Wrongful Act, have them report.

Even if the insured doesn’t think they need or want the carrier’s help, they need to report if, for no other reason, the insured doesn’t inadvertently create a black hole that bars coverage for any future Interrelated Wrongful Acts.

Until next time agents, stay bindin and grindin 🫡

This article is provided for educational and informational purposes only and does not constitute legal advice, insurance advice, or professional consulting of any kind. The policy definitions and provisions referenced herein are generic composite examples created for illustrative purposes only and are not drawn from or attributable to any specific carrier’s policy form. Actual policy language will vary by carrier, form, and endorsement, and coverage determinations depend on the specific facts and policy language applicable to each individual case. No attorney-client relationship, broker-client relationship, or any other professional relationship is created by reading or relying on this article. Nothing in this article should be construed as a characterization of the conduct, competence, or legal liability of any named party, firm, or individual. For specific questions regarding insurance coverage, policy language, claims handling, or professional liability exposure, readers should consult with competent coverage counsel and/or a licensed insurance professional in their jurisdiction. The views expressed are solely those of the author in his individual capacity and do not represent the views of his employer or any affiliated organization.

Really appreciate Kevin LaCroix and Sarah Abrams publishing my latest article in The D&O Diary.

This was a really interesting case where a local chamber of commerce HAD a D&O policy, but since they didn’t also purchase EPLI they had no coverage whatsoever for the discrimination lawsuit they were faced with.

Parkland Chamber of Commerce was sued for civil rights violations after allegedly pressuring a hotel to cancel a regional Muslim organization’s conference.

They had a D&O policy, but the discrimination exclusion was written in absolute “arising out of” language.

The insured tried two arguments to get coverage: --> The Conduct Exclusion created ambiguity → court said that would be a “windfall for intentional discriminators” --> Tortious interference allegations were separately covered → court said “arising out of” discrimination pulls every claim back under the exclusion

Mount Vernon’s denial was upheld. The Chamber defended itself for 14+ months with zero carrier backing.

Plot twist: the Chamber ultimately won the underlying suit... but still ate every dollar of defense costs alone.

The fix was simple: EPLI alongside the D&O. Third-party discrimination/harassment coverage would have responded where the D&O could not.

Insurance professionals — have you ever upsold EPLI to your nonprofits with zero employees? Seems unintuitive... why would I purchase Employment Practices Liability when I don’t have ANY employees? But as this insured learned the hard way, zero-employee organizations still have third-party harassment/discrimination exposures that a monoline D&O policy most likely excludes. Third-party EPLI can be a real lifesaver...if you invest in the coverage.

Read the full analysis here:

https://www.dandodiary.com/2026/03/articles/d-o-insurance/guest-post-nonprofit-with-zero-employees-handles-discrimination-claim-alone/

The information shared in this post is for educational purposes only and does not constitute legal or insurance coverage advice. Always consult with a qualified insurance professional regarding your specific coverage needs.

Share 0 omissions

At issue is a business interruption loss that Stonegate Group’s subsidiary companies sustained during the pandemic of 2020…but couldn’t recover because they weren’t named on the policy.

As many of us remember, 2020 was a year full of unplanned shutdowns due to COVID. By March the Prime Minister announced that pubs, bars and restaurants were to be shut down. These establishments were not permitted to reopen until July.

The linked article is worth reading, but the irony of this whole debacle is that the group HAD business interruption coverage. The one entity that was named on the policy, Stonegate Pub Company Limited, recovered through a confidential settlement with insurers. But for some reason the phrase “and its Subsidiary Companies” was left off the named insured. The parent entity had coverage. The companies that actually operated 4,500+ pubs, bars, and restaurants across the UK? Left out in the cold.

According to the pleadings filed so far, no apparent explanation has emerged as to why this critical language was omitted. What makes this even more excruciating from the insured’s perspective is that the broker’s own marketing documents showed the proposed insured as “Stonegate Pub Company Limited and its Subsidiary Companies.” The right answer was on paper. It just never made it onto the policy.

What makes this really painful for the broker: Marsh fought hard to win this account in a competitive tender in 2018. They didn’t inherit someone else’s mistake. They built their own proposal from scratch. They HAD the named insured right in their Market Taster, and then somewhere between proposal and binding, the subsidiary language disappeared. They had everything right and still got it wrong.

The details matter. Stay bindin’ and grindin’.

If you’re the agent who built the excess tower that fell apart when coverage needed to come through, the first question you’re going to ask yourself is, “Did I omit something? Did I screw this up?”

Welcome to 0omissions.com. The purpose of this blog is to:

1) empower insurance agents with strategies that help prevent serious omissions

2) catechize the insurance public on current trends in the specialty commercial insurance market.

My name is Lucas Roberts. I’m an insurance professional who has worked both on the carrier side as an underwriter and as a wholesaler broker. I work with a variety of products such as Directors & Officers Liability, Employment Practices Liability, Fiduciary Liability, Crime Insurance, Professional Liability, among many others. I write a monthly blog for the Professional Liability Underwriting Society called “Claims Made Bites”, and I’ve been published on prestigious blogs such as the D&O Diary. I love Claims Made coverages. I love reading about it, talking about it, and writing about it.

If you’re an insurance professional like myself, or perhaps you’re just interested in these coverages as a consumer, then this blog is the right place for you.

For the premier article , I wanted to write about a case that best exemplified my intent as the author. I hate when claims are denied. There’s nothing worse than having someone invest in an insurance policy to transfer their risk, only to have the policy fall apart at the 9th hour. Even insurance professionals can get caught off guard when these denials happen. They’ll scour the policy to see if there’s any room for ambiguity, and lament their findings when, sure enough, there’s a clear and unambiguous exclusion listed in the policy that bars coverage for the claim in question.

While the details of this case are still ongoing, there’s enough information here for us to draw some strong conclusions. If the biggest brokers can mistakenly omit consequential provisions in the policies they write, then it can happen to any of us.

I first saw this case highlighted in Hunton’s very insightful Insurance Recovery Blog. The case in question is Federal Express Corp. v. National Union Fire Insurance Co. of Pittsburgh, Pa., et al. Fedex had a nuclear verdict of $165M for a wrongful death lawsuit back in 20151. A Fedex truck had crashed into the back of a pickup truck killing the driver and her daughter. Fedex appealed this verdict and the case was prolonged.

Fedex had purchased insurance, a large tower filled with a variety of carriers that expanded the total aggregate of coverage that was designed to respond to nuclear verdicts such as this. Fedex had these claims reported to the carrier expecting coverage to continue. You can imagine their shock and horror when one of the excess carriers notified the insured that they were refusing to pay toward the more than $200M in post-judgement interest that had accrued during the appeal. The entire excess tower won on the same policy language, leaving Fedex to bear this massive post-judgement bill all by themselves.

The Hunton blog post succinctly breaks down the insurance provisions within the policy that precluded coverage, but for our purposes I want to highlight a very specific part of the policy that was cited for the claim denial. The Appeals clause (Section VI.A, Endorsement 26 of National Union policy) reads as follows:

“If the Insured or the Insured’s underlying insurers do not appeal...we may elect to do so. If we appeal, we will be liable for...interest...”

I know not all of us speak legalese, so what does this mean?

First, what’s post-judgement interest? The basic definition is:

interest on any judgment against the insured that accrues from the time the judgment is entered by the court to the time the actual payment is made.

For Fedex, the $165M verdict came down in 2015. Fedex appealed, and the New Mexico Supreme Court upheld the ruling in 2022. And according to New Mexico state law, post-judgment interest for tortious conduct is 15%, which is how Fedex’s post-judgement bill ballooned to exceed the initial verdict.

This raises a broader issue that Frederick Fisher, J.D., CCP, one of the foremost authorities on legal risk management and claims-made insurance, identified when reviewing this piece: the cost versus necessity of multi-jurisdictional legal reviews on large national accounts2

If that wasn’t devastating enough, Fedex learned that according to their excess policy, the only way the carrier would pay the post-judgement interest is if:

1. The underlying carriers (or insured) do not appeal

2. The excess carrier decides to appeal

Since Fedex appealed, this meant that according to the clear and unambiguous language of the policy the excess carrier was not on the hook for the post-judgement interest. In order for the excess carrier to pay out, THEY would have had to be the ones who appealed, not the insured.

The Hunton blog, as informative as it is, did not answer some of my most burning questions about this case:

• Did Fedex not try to coordinate their appeal efforts with their carrier partners?

  • Did they really leave their carriers in the dark and not check to see if their appeal would inhibit coverage?

• And more importantly for us; did Fedex’s risk manager know about and disclose the Appeals Provision in this excess policy to Fedex BEFORE Fedex appealed the verdict?

To answer this, I went to Allegheny County’s docket portal to review the documents from the claim denial litigation for myself. While I couldn’t find a definitive answer for the first question, I was able to locate a resounding answer to the second.

No, the risk manager did NOT disclose the Appeal Provision to Fedex.

How do we know this? Because according to court documents Fedex brought it up!

Fedex moved to preclude the carrier “from making any statements or comments regarding the purported “negotiation” of the relevant terms of the insurance policies here at issue and references to the revenue, wealth, and corporate size of FedEx’s insurance broker, Marsh USA, Inc. (“Marsh”).

Fedex did not want the carrier to get in front of a jury and argue that Fedex should have known about the provision because Fedex used an insurance professional to place it. “It’s not our fault that they didn’t read their policy. They have an insurance broker who helped them buy our policy, for crying out loud!”

Not just any insurance broker, mind you. Fedex has the largest insurance broker in the world as their agent.

Here are some of the reasons Fedex used to argue against the carrier citing their broker’s expertise or service. I’ll just quote straight from Fedex’s motion (emphasis mine):

And:

Fedex is basically saying “The carrier didn’t find any evidence that our broker negotiated, or even brought up this provision!” That’s…quite the admission. Presumably the carriers would have served several deposition subpoenas to the relevant brokers and risk managers who helped place this policy and have their testimony entered into the record. Fedex preemptively made sure that this type of evidence could not be used against them in front of a jury.

The judge granted Fedex’s motion, basically confirming there was no evidence that any of the brokers or risk managers ever brought up this provision, certainly not with the carrier, and maybe even with Fedex themselves.

That last part is very important for us as insurance professionals. What if the broker never disclosed this provision to Fedex? Presumably they would have been aware of Fedex’s intent to appeal. As the insurance professionals, did anyone think to:

• Tell the carriers and check to see if coverage would continue to apply?

  • “Hey, the insured is looking at appealing, is that cool?”

• Check the policies for language addressing when the insured appeals a judgement

  • As the insurance professionals, the brokers would have been relied upon to flag any restricting policy language, and it’s clear that that didn’t happen here.

The evidence the carriers gathered for their case, evidence that Fedex reviewed and moved to preclude, showed that the broker, the insurance professional, did not negotiate the policy language in the Appeals Provision, or apparently “ANY PROVISION included in ANY OF THE DEFENDANT’S POLICY!” (direct quote).

Imagine Fedex arguing, “the carrier hasn’t shown a SINGLE INSTANCE where our broker negotiated a SINGLE PROVISION in ANY of our policies!” while their broker nods along, cringing with embarrassment.

Even though Fedex was able to convince the judge to preclude any evidence that their insurance broker was a sophisticated, capable broker, they still fell short. On January 21, 2026, the judge ruled in favor of the carrier (although they still have a bad faith claim issue the court is grappling with). But in regards to any coverage towards the $200M post-judgement interest that Fedex was hoping to get paid…no. The judge affirmed that the policy language is clear and unambiguous, and because Fedex decided to appeal, they were not privy to any of the coverage that may have remained had Fedex chosen not to appeal instead.

I cannot imagine the intensity of Fedex’s conversations with their broker.

“How could you have let this happen?”

“It was your job to flag this stuff, what do you think we pay you for?”

“How are you going to fix this?”

Anyone who has been involved in a claim denial situation knows better than most that these conversations are seldom cordial, and can often lead to the insurance professional themselves filing a claim with their carrier regarding their professional liability. This is why insurance agents carry Errors & Omissions insurance coverage, to protect them for when they make an error, or omit something to their clients that causes financial damage.

For this particular broker, the claim denial was litigated in Pennsylvania which does not hold insurance agents to a fiduciary standard of care. The linked legal post here notes that an insured in Pennsylvania would need to demonstrate that a special relationship was established, “for example… through overmastering influence and/or final decision-making power ceded to the insurance agent or broker--the insurance agent or broker is assumed to have undertaken additional, fiduciary duties.” If a fiduciary duty cannot be established, then the broker is usually safe from claims alleging failure to disclose.

While this legal standard may benefit the agent from taking on a large claim, it still doesn’t solve the larger problem; that an important policy provision was missed, and coverage MAY have been available but was never negotiated for. This is damaging not only for the insured whose claim was denied, but the insurance agent’s reputation becoming tarnished.

As mentioned earlier, I’ll be using “0 omissions” to explore the sometimes sneaky and onerous policy provisions that often catch insureds and their insurance professionals completely off guard. Not every exposure can be covered, and it’s a fool’s errand to try and predict how claim denials will end up in court as I’ve noted elsewhere.

Regardless, as insurance professionals we should hold ourselves to the highest standard possible and work to make sure our clients are getting the best insurance coverage available, unencumbered by unfavorable policy wording when possible.

Until next time agents, stay bindin and grindin 🫡.

This article is provided for educational and informational purposes only and does not constitute legal advice, insurance advice, or professional consulting of any kind. The analysis contained herein is based solely on publicly available court documents, statutory law, and secondary legal sources, all of which are cited and linked above. No attorney-client relationship, broker-client relationship, or any other professional relationship is created by reading or relying on this article. The author makes no representations or warranties regarding the completeness, accuracy, or current status of the legal proceedings discussed, which remain active and ongoing as of the date of publication. Court records and legal proceedings are subject to change, and readers should verify current case status independently. Nothing in this article should be construed as a characterization of the conduct, competence, or legal liability of any named party, firm, or individual. For specific questions regarding insurance coverage, policy language, claims handling, or professional liability exposure, readers should consult with competent coverage counsel and/or a licensed insurance professional in their jurisdiction. The views expressed are solely those of the author in his individual capacity and do not represent the views of his employer or any affiliated organization.

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