(Article from Insurance Law Alert, November 2015)
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A New York court dismissed LifeLock’s coverage suit against its insurer, finding that policy exclusions barred coverage for deceptive practices and misleading advertising claims. LifeLock, Inc. v. Certain Underwriters at Lloyd’s, London, No. 651577/2015 (N.Y. Sup. Ct. N.Y. Cnty. Nov. 19, 2015).
Several class action suits were filed against LifeLock, a company that provides identity theft protection services. The suits alleged that LifeLock engaged in fraudulent and deceptive activities to induce customers to purchase its services. LifeLock sought coverage from Certain Underwriters at Lloyd’s London, which the insurer denied. Underwriters argued that coverage was barred by Exclusion L, which precluded coverage for claims “[a]rising out of any related or continuing acts, errors [or] omissions . . . where the first such act, error or omission . . . was committed or occurred prior to the Retroactive Date. Underwriters emphasized that the underlying claims alleged a pattern of false and misleading advertising since 2005, more than three years before the Retroactive Date of January 8, 2008. In addition, Underwriters argued the coverage was barred pursuant to Exclusion I, which precluded coverage for claims “arising out of or resulting from . . . unfair competition . . . false, deceptive or unfair trade practices, or false or deceptive or misleading advertising.”
In a ruling from the bench, the court dismissed the suit against Underwriters, agreeing with the insurer that the exclusions were unambiguous and applied squarely to the claims against LifeLock. Underwriters are represented by Simpson Thacher attorneys Bryce Friedman and Summer Craig.