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Appeals court revives part of Vesttoo-related suit against Gallagher - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Appeals court revives part of Vesttoo-related suit against Gallagher by Gavin Souter Agents and Brokers , Coverage Disputes , Reinsurance Arthur J. Gallagher & Co. Apr 3, 2026 A federal appeals court has reinstated part of a lawsuit by Porch.com accusing Gallagher Re of failing to meet its obligations as a reinsurance broker in connection with a program tied to the collapsed Vesttoo operation. In Porch.com v. Gallagher Re Inc. , the 5 th U.S. Circuit Court of Appeals on Thursday found that while some of Porch’s breach-of-contract claims were properly dismissed, others could proceed. The dispute stems from a reinsurance arrangement for Homeowners of America Insurance, a Porch subsidiary, that involved White Rock, an Aon-managed segregated account company, and was backed by collateral tied to Vesttoo, the Israel-based insurance-linked securities platform that filed for bankruptcy in 2023 amid allegations it used fraudulent letters of credit. The agreement at issue was originally entered into with Willis Re, which was later acquired by Arthur J. Gallagher & Co. and merged with Gallagher Re. Under the arrangement, Gallagher brokered a reinsurance contract involving Homeowners of America, White Rock and Vesttoo, with funding for the coverage expected to be supported by a letter of credit purportedly issued by China Construction Bank. The bank later said it had never issued the LOC. Porch claimed it had to inject tens of millions of dollars to support HOA after it terminated the reinsurance contract. The appeals court upheld various lower-court rulings regarding Gallagher’s obligations under the contract, but found it had erred in dismissing claims related to Gallagher’s post-placement administrative duties. Porch plausibly alleged that Gallagher failed to properly handle collateral documentation, including by mischaracterizing a collateral letter as a valid letter of credit, overlooking discrepancies and assuring the insurer that the reinsurance program was adequately funded, the court said. Those allegations fall within contractual obligations requiring the broker to perform “all servicing duties customarily performed by a reinsurance intermediary-broker” after placing coverage, including administering reserve funding, the court said. “At a minimum,” the court said, the scope of those duties is ambiguous and may depend on industry custom, making dismissal at the pleading stage inappropriate. The appeals court sent the case back to the district court for further proceedings. The decision is the latest development in litigation tied to the Vesttoo collapse, which has triggered multiple lawsuits involving brokers and financial institutions over allegedly fraudulent collateral supporting reinsurance transactions. Gallagher declined to comment on the ruling. 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