Skip to Content



GL E-Note 9-28-22


Today’s E-Note by partner Vince Vitkowsky explains how, in Hartford Fire Insurance Company v. The Western Union Company et al., Case No. 22-cv-00557-JMF, 2022 WL 4386836 (U.S.D.C., S.D.N.Y. decided September 22, 2022), a Federal Court applied the insurrection provision of war exclusion and financial services exclusion of a comprehensive general liability (CGL) policy to find no duty to defend claims concerning the death of an airline passenger killed by a Russian-backed separatist group in Ukraine.

Hartford Fire Insurance Company v. The Western Union Company et al., Case No. 22-cv-00557-JMF, 2022 WL 4386836 (U.S.D.C., S.D.N.Y. decided September 22, 2022)

On July 17, 2014, a Russian-backed separatist group in Eastern Ukraine shot down Malaysian Airlines Flight 17 (“MH17”). The casualties included an American student. His family sued Western Union and other financial institutions for allegedly providing financial support for the separatist group. Western Union sought a defense and coverage from Hartford Fire Insurance Company under a CGL policy. The Southern District of New York, applying Colorado law, denied the claim because of the insurrection provision in the War Exclusion, and the Financial Services Exclusion.

The group was the Donetsk People’s Republic (“DPR”), a Russian-backed group allegedly acting to create a “Proto-state, Novorossiya, through control of territory in Ukraine acquired through acts of intimidation and coercion.” The policy contained a common War Exclusion, which in addition to excluding war and warlike action, excluded “insurrection, rebellion, revolution [or] usurped power ….” The Court found that the case fell squarely within the exclusion for “insurrection.” It relied on previous Second Circuit authority that defined insurrection as “(1) a violent uprising by a group or movement (2) acting for the specific purpose of overthrowing the constituted government and seizing it’s powers.” Pan Am. World Airways, Inc. v. Aetna Cas. & Sur. Co., 505 F.2d 989, 1017 (2nd Cir. 1974). Hence, there was no duty to defend.

Another exclusion also precluded coverage. The Financial Services Exclusion provides that the Policy “does not apply to ‘bodily injury’ …. resulting from the rendering of … financial services by any insured to others.” Financial services was defined to include “interbank transfers,” and “[s]elling or issuing travelers checks, letters of credit, certified checks, bank checks or money orders.” The Court said this plainly encompasses the factual allegations against Western Union, because the allegations indicated that Western Union’s sole role in the downing of MH17 was its “ongoing and essential financial support to the DPR.” The court rejected the argument that allegations of “material support” changed the outcome.  “Material support” is a broad legal allegation, not a factual allegation. It is the factual allegations of the complaint, and not the legal claims, that determine the duty to defend.

Although this is one of the few cases construing war exclusions, it does not add significant new principles of law. It does address a factual scenario of potential ongoing relevance.

For more background on insurrection, see Vitkowsky and Samuel, A Legal Guide to Insurance Coverage for Violent Protests, Terrorism, Insurrection, and Revolution, July 11, 2021.