March 08, 2012 Articles

Trigger of Insurance Coverage for Wrongful Arrest, Prosecution and Conviction Lawsuits

A rising tide of exonerations is producing a wave of lawsuits over when coverage should begin for such wrongful litigation

by Benjamin C. Eggert and Ashley Eiler [1]

As Chief Justice John Roberts noted in a recent opinion, “DNA testing has an unparalleled ability both to exonerate the wrongfully convicted and to identify the guilty.”[2] Justice Roberts’s observation is clearly correct given that, in the last two decades, DNA testing has led courts to set aside nearly 300 criminal convictions of persons who later were found to be innocent.  Hundreds of other individuals also have been exonerated through other means without DNA evidence.  By some estimates, the rate of exonerations has been rapidly increasing, and as many as 50 wrongfully convicted persons are exonerated annually in states nationwide.[3] 

Federal and state courts are wrestling with a range of complex issues presented by such exonerations, and in 2011, the United States Supreme Court ruled on or heard argument as to at least three cases bearing on wrongful convictions.[4]  Meanwhile, exonerations have given rise to a surge in the filing of federal and state civil rights lawsuits seeking compensation from governmental entities and public officials for wrongful arrests, prosecutions, and convictions (“wrongful APC litigation”).[5]   Recent studies conclude that wrongful APC litigation can lead to millions of dollars of exposure for governments and their officials for payment of defense costs, settlements, and judgments.[6]

Such lawsuits, in turn, have led to disputes between insurers and their insureds concerning insurance coverage for wrongful APC litigation, with specific focus on the applicable trigger of coverage under public entity and officials liability policies or similar coverage.  In the two years since the article Trigger of Insurance Coverage for Wrongful Conviction Lawsuits was published in the January/February 2010 issue of this journal,[7] courts have issued at least seven opinions concerning the appropriate trigger of coverage for wrongful APC litigation.[8]  These decisions are generally consistent with the established judicial consensus that the trigger of coverage typically is when the wrongfully accused first experiences injury, which, at the latest, is the date of conviction.

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