Back to the Library
Companies reviewing their primary and excess ERISA fiduciary liability policies should take note of the New York Court of Appeals’ ruling in Federal Insurance Co. v. IBM Corp., 2012 N.Y. LEXIS 311 (N.Y. Feb. 21, 2012). In that case, the state’s highest court ruled that an excess insurer on a “follow form” ERISA fiduciary liability policy was not required to cover the attorney fee portion of a settlement IBM paid in an ERISA class action, even though the primary insurer had provided coverage to the point of exhausting the primary policy limits. The court held that the claim was not covered by the terms of the primary policy because IBM was sued in its capacity as a plan “settlor” rather than as an ERISA fiduciary. In this advisory, attorneys from our ERISA Litigation Practice summarize this case and identify important ramifications of the court’s decision.