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Federal Court Finds Search Warrant is a “Claim” Triggering Duty to Defend

Blogs, Insurance Coverage

In a recent decision, the United States District Court for the Eastern District of Virginia held that a search warrant constituted a “claim” under a directors and officers insurance policy’s broad definition, thus triggering an insurer’s duty to defend. Protection Strategies, Inc. v. Starr Indemnity and Liability Co., Civil Action No. 1:13-CV-00763. Specifically, the court granted a motion for partial summary judgment filed by plaintiff, Protection Strategies, Inc. (“PSI”), which sought a determination that defendant Starr Indemnity and Liability Co. (“Starr Indemnity”) breached its duty to defend when it refused to reimburse defense costs associated with a search warrant served on its insured, PSI, by NASA Office of the Inspector General (“NASA”), because it was not a “claim” under the policy. 

In particular, the court found that Starr Indemnity’s policy uses a broad definition of “claim,” which includes any “written demand for non-monetary, or injunctive relief made against an Insured . . . .” Consequently, the court concluded that a search warrant was a written order demanding non-monetary relief in the form of PSI’s obligation to turn over numerous files and records, and, thus, Start Indemnity had a duty to defend PSI in the underlying government ordered investigations. 

 To read a copy of the court’s decision click here