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Employment Practices Liability Insurance: When the Insurance Company Says No, The Jury Says Yes

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After an epic battle between family members contesting the ownership of an East Coast car dealer conglomerate, the car dealer recovered $4.3 million from its insurance company at trial. The company, Darcars, purchased an employment practices liability insurance policy with an indemnity limit of $22 million from its insurer, Universal Underwriters Insurance Company.

Darcars is owned and operated by the Darvish family. One of the Darvish daughters, Tammy, sued her father and brother in Maryland state court, claiming they denied her an ownership interest in the company. Darcars tendered the lawsuit to Universal Underwriters, who refused to provide coverage. Darcars then spent more than $4 million out of pocket in fees and expenses defending the lawsuit.  Darcars beat Tammy’s claims on summary judgment and then settled for an undisclosed sum on appeal.

Darcars then sued Universal Underwriters in Maryland federal court, seeking to be reimbursed the $4.3 million it spent in connection with Tammy‘s lawsuit. Darcars claimed that the lawsuit brought by Tammy clearly contained allegations which were potentially covered under the employment practices liability insurance policy sold to Darcars by Universal Underwriters.  Thus, Darcars argued that the insurance company should have provided them with a defense, and not forced Darcars and the Darvish family to spend millions of dollars in legal fees and expenses defending the case on their own.

A federal jury agreed with Darcars and awarded Darcars all of the monies it spent, totaling $4.3 million.

Now, that’s making an insurance company keep its promise the hard way, but sometimes the hard way is the only way to get them to listen.

If you have a claim with your insurance company and need help, feel free to contact us.

Evan-Schwartz

Evan S. Schwartz
Founder of Schwartz, Conroy & Hack, PC
800-745-1755
ESS@schlawpc.com

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