Lack of Culpable Intent to be ‘Dishonest’ Could Be Costly

ClarkDietrich, a steel producer, sued CSSA, a trade association of three competitors, for publishing false statements regarding its material quality. When the jury returned a verdict against CSSA for $43 million, the association’s E&O insurer, Evanston Insurance Company, declared it had no obligation to indemnify. Evanston claimed CSSA’s publication of false statements fell under the dishonest conduct exclusion. The Sixth Circuit Court of Appeals disagreed, distinguishing the jury’s finding that while CSSA acted intentionally, it did not find that CSSA intentionally published false statements, which could trigger the exclusion, as opposed to intentionally publishing statements that later proved to be false. Learn more about the case here.