LCS Corrections Services, Inc. v. Lexington Insurance Company

The Fifth Circuit recently decided whether Lexington Insurance Company was required to defend and indemnity LCS Corrections Services, Inc., a private prison operator, in a civil rights suit brought by the family of an inmate housed at one of its facilities. The inmate died in detention after the facility allegedly failed to provide him with his medication. The appeal arose from an insurance dispute regarding whether Lexington had a duty to defend and indemnify LCS against the claim by the inmate’s family. LCS held two insurance contracts with Lexington:  a Commercial General Liability (“CGL”) policy and a Commercial Umbrella Liability (“CUL”) policy.

           LCS sought coverage for the civil rights action under the commercial general liability and commercial umbrella liability policies issued by Lexington. The Court held that the insurer was not required to defend or indemnify LCS for liability in the suit under either policy. More specifically, the commercial liability policy issued by Lexington expressly excluded damages stemming from a failure to render professional or medical services, under a “medical services” exclusion to the CGL policy. The Court further determined that Lexington was not required to defend LCS in the underlying suit nor indemnify the facility because the CUL disallowed coverage under a “professional liability” exclusion. The case was remanded for entry of judgment in favor of Lexington Insurance Company. Read the full story here.