A federal court in West Virginia held that an insurer was entitled to rescind an insurance policy based on the insured's misrepresentations regarding disciplinary complaints and potential claims in a renewal application. Liberty Ins. Underwriters, Inc. v. Martin, 2025 WL 1298110 (S.D. W. Va. May 5, 2025).
The attorney's professional liability insurer sued the attorney seeking to rescind the policy because of material misrepresentations made in renewal applications. Nine separate lawsuits for professional malfeasance were filed against the attorney.
The court granted the insurer's motion, holding that the attorney's misrepresentations were material as a matter of law. "Here, the insurer submitted affidavits and underwriting documentation showing that the attorney knowingly failed to disclose at least 23 disciplinary complaints, two formal statements of charges, and a client demand letter. No counterarguments were raised, nor did the claimants respond to the motion." There being no controversy as to any material facts, the court ruled in favor of the insurer.
"Insurance Policy Voided Due to Attorney's Failure to Disclose Disciplinary History" https://www.jdsupra.com/legalnews/insurance-policy-voided-due-to-attorney-8098129/ (Jun. 30, 2025).
Commentary
Helpful information for any attorney can be found on the American Bar Association's website "FAQ's on Malpractice Insurance for the New or Suddenly Solo Attorney".
In particular, the information states: "It is extremely important to be as candid and truthful as possible on the application, and answer the questions asked. The failure to do so could have serious consequences, such as denial of a claim. If there is a question that asks if there is a potential for a claim, or facts and circumstances that could give rise to the claim, then disclosure should be made. This situation may also give rise to a duty to report under the policy currently in place."
As seen in the above case, lack of candor can not only result in denial of a claim, but also in cancellation of the insurance policy.
