The U.S. Eleventh Circuit Court of Appeals, applying Florida law, recently held that a professional services exclusion, which excluded coverage for any loss arising out of any insured’s performance of professional services, barred coverage for claims arising from an alleged Ponzi scheme. Stettin v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 2017 WL 2858768 (11th Cir. July 5, 2017).

The insured, a bank, and multiple of its executives were sued by a bankruptcy trustee to recover losses caused by a Ponzi scheme using the insured’s accounts. The insureds sought coverage under their primary and excess liability policies, and the insurers disclaimed coverage. The insureds settled the underlying claims and assigned their rights under the policies to the trustee. The trustee then sued the insurers for breach of contract and for bad faith. The insurers maintained their position of no coverage based on a professional services exclusion that stated, in relevant part, that the insurers “shall not be liable to make any payment for loss in connection with any claim made against any insured alleging, arising out of, based upon, or attributable to … any insured’s performance of or failure to perform professional services for others….” The trial court granted the insurers’ motion to dismiss on the basis that the exclusion barred coverage since some of the executives provided professional banking services to the company responsible for the Ponzi scheme. The trustee appealed.

The Eleventh Circuit affirmed, finding that the professional services exclusion applied to all claims. The trustee argued that the phrase “any insured” in the exclusion should be read severally so as to bar coverage only as to the claims against those insureds working directly with the company responsible for the Ponzi scheme, but the Eleventh Circuit found that the district court properly observed that the phrase “any insured” unambiguously expresses a contractual intent to apply to joint obligations.