No Coverage For Wrongful Acts Of Acquired Company Occurring Before Purchase

In a win for Wiley's client, the United States District Court for the Western District of Pennsylvania, applying Pennsylvania law, determined that an insured was not entitled to coverage for a judgment against it because both a "Changes in Exposure Provision" and an "Interrelated Actions Provision" applied. PNC Bank, N.A., v. AXIS Ins. Co., No. 21-01299 (W.D. Pa. Mar. 13, 2024).

The insured bank was held liable for a "nine-figure" judgment arising out of liabilities it assumed through the acquisition of another bank. The insured sought coverage for the judgment and defense costs under several excess bankers professional liability policies. While the acquisition occurred eleven hours after the primary policy incepted, the liabilities arose prior to the acquisition and pre-dated the coverage period. The excess insurers denied coverage, and the insured brought a declaratory judgment action.