FCL Fidelity Blog

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Westlake Chemical: Texas Court of Appeals applies Authorized Representative Exclusion in finding No Coverage under Crime Policy for Phony Invoicing Scheme

By Chris McKibbin and Devra Charney On May 25, 2023, the Texas Court of Appeals released its decision in Westlake Chemical Corporation v. Berkley Regional Insurance Company.  The Court affirmed the District Court’s summary judgment in favour of the insurers on the basis that the Authorized Representative Exclusion applied.  The Court’s decision is notable in finding that the exclusion does not require an agency relationship and applies to a broader range of circumstances where the representative has permission to, or is otherwise empowered to, act on an insured’s behalf. The Facts Westlake Chemical Corporation (“Westlake”) manufactures polyethylene and polyvinyl

C.S. McCrossan Inc.: Eighth Circuit applies Crime Policy’s Authorized Representative Exclusion in finding No Coverage for loss caused by Insured’s Property Manager’s Employee

On August 6, 2019 the Eighth Circuit Court of Appeals released its decision in C.S. McCrossan Inc. v. Federal Insurance Company.  The decision addresses a host of coverage issues, including the application of the “Authorized Representative” exclusion and the definitions of “Subsidiary” and “Contractual Independent Contractor.”  The case is instructive for fidelity claims and underwriting professionals, as well as brokers and corporate risk managers.   The Facts C.S. McCrossan Inc. (“McCrossan”) maintained a subsidiary, Blakeley Properties, LLC (“Blakeley”).  One of McCrossan’s owners also owned a separate company, Stewart Properties, LLC (“Stewart”).   Blakeley and Stewart owned commercial rental properties.  Through intermediate