Insurer Not Required to Defend Investment Firm in $8.5 Million Employment Action, Judge Rules

LOS ANGELES — An insurer has no duty to defend an investment firm in an $8.5 million action filed by a former employee because the claims fall within the policy’s “Contract Exclusion,” which bars coverage for “arising from, or in consequence of any Insured’s liability under any contract or agreement.”

In a Jan. 28 order, Judge James V. Selna of the U.S. District Court for the Central District of California found the allegations in the underlying lawsuit arise from an employment agreement between the firm and the former employee.

TriPac is a financial services company that manages institutional capital for …