(Article from Insurance Law Alert, January 2017)
For more information, please visit the Insurance Law Alert Resource Center. Our November 2015 Alert discussed a New York Supreme Court decision dismissing LifeLock’s coverage suit against its insurer. The trial court ruled that policy exclusions barred coverage for claims alleging deceptive practices and misleading advertising. LifeLock, Inc. v. Certain Underwriters at Lloyd’s, London, No. 651577/2015 (N.Y. Sup. Ct. N.Y. Cnty. Nov. 19, 2015). This month, the Appellate Division affirmed the ruling. LifeLock, Inc. v. Certain Underwriters at Lloyd’s, 2017 WL 161045 (N.Y. App. Div. Jan. 17, 2017).
Several class action suits were filed against LifeLock alleging that it engaged in fraudulent and deceptive activities to induce customers to purchase its services. LifeLock sought coverage from Certain Underwriters at Lloyd’s London, which the insurer denied. Underwriters argued that coverage was barred by Exclusion L, which precluded coverage for claims “[a]rising out of any related or continuing acts, errors [or] omissions . . . where the first such act, error or omission . . . was committed or occurred prior to the Retroactive Date.” Underwriters argued that the underlying claims alleged a pattern of false and misleading advertising since 2005, more than three years before the Retroactive Date of January 8, 2008. In addition, Underwriters argued that coverage was barred pursuant to Exclusion I, which precluded coverage for claims “arising out of or resulting from . . . unfair competition . . . false, deceptive or unfair trade practices, or false or deceptive or misleading advertising.”
The trial court agreed with Underwriters and dismissed the suit. The Appellate Division, First Department, unanimously affirmed, with costs. Underwriters are represented by Simpson Thacher attorneys Bryce Friedman and Summer Craig.