John M. Kirby
Anderson v. Cincinnati Insurance Company
In Anderson v. Cincinnati Insurance Company, the federal court in Asheville (on February 5, 2013) ruled in favor of an insured, in a claim against the insurer arising from a Directors and Officers (D&O) policy. The insureds sought defense costs and indemnity for liability arising from their service as directors at a bank and members of the loan committee. The primary issue on appeal was determining the duration of the policy (based on an "extended reporting period" for D&O claims). The facts of this dispute are too complex to summarize here, but the court ruled in favor of the insured on the motion for summary judgment. The court relied in part on the principle that ambiguities in the policy should be construed against the insurer. Of some interest is a discussion in the opinion regarding the role of the insurance agent. The insurer argued that the agent was the agent for the insured, and not for the insurer. This was relevant because the insurer argued that information about the reporting period available to the agent was imputed to the insured. The court, however, rejected this argument, and noted the general rule (by statute and common law) holding that the insurance agent is the agent of the insurer.