Article ID: f7b5f9f7a334561c3620c96e5c2f32fccd87540adbc89b185f9a44737297243e
Source ID: secondary:businessinsurance.com
Published At: -
Extraction Method: bs4_heuristic
URL: https://www.businessinsurance.com/cna-unit-must-cover-covid-era-fraud-settlement-court/
Body Text
CNA unit must cover COVID-era fraud settlement: Court - 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 2026 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 2026 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 2026 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 2026 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 CNA unit must cover COVID-era fraud settlement: Court by Richard Sine Coronavirus , Coverage Disputes CNA Oct 1, 2026 A CNA unit must cover a consulting firm’s $7.6 million settlement with the U.S. government over a botched pandemic-era rental assistance program, a federal judge ruled, rejecting the insurer’s argument that the firm’s alleged misconduct was too deliberate to qualify for coverage. The decision, in Guidehouse Inc. v. Continental Casualty Co., was issued Tuesday by the U.S. District Court for the Eastern District of Virginia in Alexandria. McLean, Virginia-based Guidehouse served as the prime contractor for New York’s COVID-era Emergency Rental Assistance Program, using software built by a subcontractor, Nan McKay and Associates. Hours after the online application portal went live in June 2021, the state shut it down after discovering applicants’ personal information had been exposed online. A whistleblower later sued Guidehouse and Nan McKay under the False Claims Act, alleging they rushed an outdated, insecure system into use and hid its defects from the state. The Justice Department intervened, and Guidehouse settled in 2024 for $7.6 million, without admitting wrongdoing. Continental, which had issued Guidehouse a liability policy with a $5 million retention, denied coverage, arguing the whistleblower suit alleged intentional misconduct barred by the policy’s “Deliberate Acts” exclusion. The judge disagreed, finding the underlying complaint didn’t necessarily establish the dishonest or knowing conduct the exclusion requires, since the False Claims Act imposes liability based on reckless disregard for the truth, a lower bar than deliberate wrongdoing. He also rejected Continental’s argument that the exclusion applied because Guidehouse’s chief information officer testified that he knew about the security flaws. The judge said the whistleblower’s complaint did not allege that the CIO knew Guidehouse’s certifications to the state were false. Continental’s “Deliberate Acts” exclusion does not cover conduct that was reckless but not dishonest, he ruled. He also found the settlement itself was not excluded as a fine or penalty, since it was a single undifferentiated payment that didn’t allocate any portion to punitive measures. The judge ordered the parties to schedule a settlement conference and stayed the case in the meantime. Related News EEOC retreats on enforcement, defends religious, majority groups: Report October 1, 2026 Lyft to pay $272.5 million to settle California misclassification claims October 1, 2026 New insurance coverage law firm forms out of Wiley Rein October 1, 2026 Missing billing proof stalls medical benefits in mold claim: Judge October 1, 2026 Parametrics firm hires former Allianz cyber leader October 1, 2026 ICC, Axa cut ties amid Trump campaign against court October 1, 2026 Court dismisses intentional-tort claims in propane explosion October 1, 2026 USI launches property facility October 1, 2026 Saudi-linked tanker war risk premiums triple October 1, 2026 Facebook-f X-twitter Linkedin-in Business Insurance is a singular, authoritative news and information source for executives focused upon risk management, risk transfer and risk financing. Never miss important news: Become a Business Insurance Online subscriber today Subscribe Now Information About Us Contact Advertise Privacy Policy Terms & Conditions Copyright 2026. BUSINESS INSURANCE HOLDINGS Member, Beacon International Group, Ltd.
Metadata (JSON)
{
"score": 13.583333333333334
}