"Personal Injury" (Defamation) Coverage under a PULP -- Depp v. Heard Defense Costs

From my LinkedIn post today (Sat., June 4, 2022):

I rarely learn anything useful from the New York Post, but this article reports that Amber Heard "had to switch legal representation and is relying on her homeowner’s #insurance policy to cover the cost of her attorneys in the case. The bill for Heard’s attorney has mostly been footed by The Travelers Companies, Inc under terms of the actress’s insurance policy, sources said." "Mostly" likely because Travelers would not be responsible for paying attorneys' fees and costs associated with the prosecution of Heard's $100 million counterclaim against Depp.

Most homeowners policies don't provide coverage for "personal injury", defined to include "injury arising out of one or more of the following offenses, but only if the offense was committed during the policy period: *** 4. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services[.]" Personal umbrella policies typically provide "personal injury" coverage. I'm guessing that the Travelers policy that provided defense costs is a PULP (personal umbrella liability policy) sitting above Heard's homeowners policy.

The article is probably correct, however, in pointing out that Heard's policy with Travelers will likely NOT provide indemnification coverage for Johnny Depp's $10 million compensatory damages verdict against Heard. PULPs typically exclude personal injury coverage for:

"Personal injury":

a.  Caused by or at the direction of an "insured" with the knowledge that the act would violate the rights of another and would inflict "personal injury";

b.  Arising out of oral or written publication of material, if done by or at the direction of the "insured" with knowledge of its falsity;

c.  Arising out of oral or written publication of material whose first publication took place before the beginning of the policy period;

d.   Arising out of a criminal act committed by or at the direction of an "insureds"; or

e.  Sustained by any person as a result of an offense directly or indirectly related to the employment of this person by the "insured"[.]

The jury's positive finding on each of the prima facie elements of defamation on the three statements in Heard's op ed piece likely triggers at least one of these exclusionary provisions--"b."--and possibly two of them--"a." and "b."

I'm no bankruptcy lawyer but I do know that judgments based on intentional torts, like libel with malice aforethought, are NOT dischargeable in bankruptcy.

#personalinjury #defamation #insurancecoverageinthenews

So You Think YOU Pay a Lot in Defense Fees?...

DEFENSE FEES – INSURED VERSUS INSURED EXCLUSION
Trustees of Princeton Univ. v. National Union Fire Ins. Co. of Pittsburgh, Pa.
(1st Dept., decided 6/5/2008)

In this action, Princeton sued National Union to recover the $15 million in attorneys' fees it had already paid out in defending an underlying action relating to a foundation board's alleged breach of fiduciary duties and misappropriation of $100 in foundation assets. National Union argued in defense that the policy's $5 million equitable relief claim sub-limit and the "insured versus insured" exclusion precluded advancing more than the $5 million in defense costs that National Union had already paid. The New York County Supreme Court granted summary judgment to Princeton and awarded it $9,607,021.93.

The First Department AFFIRMED, rejecting as a "strained construction of the terms of the policy" National Union's contention that the policy's $5 million sublimit for claims that seek equitable relief applied also to claims arising from the same underlying occurrence that seek legal relief based on tort and contract law principles. The court also rejected the contention that the policy's "insured versus insured" exclusion applies to claims brought against the insured entities by individual insureds (foundation board members) acting in their individual capacities.