23 Fla. L. Weekly Supp. 535a
Online Reference: FLWSUPP 2306SKYBInsurance — Fidelity bonds — Coverage — Loss resulting from dishonest or fraudulent acts committed by employee acting alone or in collusion with others and committed with manifest intent to cause insured to sustain such loss or to obtain financial benefit for employee or another person or entity — Action against insurer by insured, which operated a “fund of funds” in the business of investing its clients’ capital with third-party investment advisors, who would select and manage the ultimate investments — Managers of funds in which insured invested were “employees” as defined by bond, which incorporated parties’ express agreement that “underlying managers” would fit within definition of “employees” — Standard of proof governing question of whether employee acted with “manifest intent” to cause loss is satisfied either by proof that it was employee’s purpose or desire to cause the insured to sustain a loss or by proof that the employee knew the loss was substantially certain to result from the employee’s conduct — Lack of due diligence is not a defense to coverage — Financial benefit — Language in bonds stating that financial benefit does not include salaries, commissions, fees bonuses, promotions, awards, profit sharing, pensions or other employee benefits earned in normal course of business does not encompass compensation secured by employees as direct consequence of their fraudulent conduct, even if it is of “type” an employee would earn in normal course of business — Discovery of employee dishonesty claims during bond period — Under policy language at issue, relevant question is not whether insured actually discovered its dishonesty claims during bond period, but whether, during the bond period, insured possessed facts which would cause a reasonable person to assume that a covered loss had been or will be incurred — Insurer not entitled to summary judgment on basis of insured’s admission that it did not discover its employee dishonesty claims until after the policy had terminated because factual issues exist as to what facts insured possessed during bond period which, when viewed objectively, would cause reasonable person to assume employee dishonesty — Proof of loss — If insured breached notice provision, prejudice to insurer will be presumed, but may be rebutted by showing that insurer has not been prejudiced by lack of notice — Because insurer argued only that insured’s failure to file proof of loss, standing alone, precluded suit, insurer is not entitled to summary judgment on proof of loss issue — Loss arising out of wire transfers — Although bonds provided that coverage arising out of wire transfers on behalf of employee would arise only if the wire transfers requested were approved in writing by an employee of the named insured listed on the declaration page, and employees in this case engaged in fraudulent conduct by, in part, “use” of the wires, that does not mean insured’s loss was one “arising out of” those transactions — Compensable damages — Insurer not entitled to summary judgment based on its contention that insured failed to prove compensable damages where insurer failed to affirmatively establish the absence of any genuine issue of material fact on the question of whether insured suffered any covered loss — Claim to setoff for collateral recoveries can be fully addressed post-trial if verdict is rendered in favor of insured
