On August 1st, the Sixth Circuit affirmed the district court's liability determination in an insurance coverage dispute. Plaintiffs, a bank holding company, its bank, and its investment firm, were insured by Progressive against losses stemming from an employee's dishonest or fraudulent acts. When an employee stole almost $1 million from a customer's account, plaintiffs sought coverage under the policy. The Sixth Circuit held that the loss was covered. The fiduciary relationship between plaintiffs and their clients, which pre-dated the theft, made plaintiffs responsible, and the loss insurable. Because a second insurance policy covered a different loss, the Court partially reversed the trial court's damages calculation. First Defiance Financial Corp. v. Progressive Casualty Insurance Co.
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Registered rep's theft of customer funds was a covered loss
- Winston & Strawn LLP
- USA
- August 7 2012
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Philip I. Weis
Senior Corporate Counsel
Pfizer
