While an insured can't be penalized for not filing a claim related to a sealed qui tam action within a certain policy period, the insurance company can deny coverage based on the "prior or pending" litigation exclusion in the policy even though the insured wasn't aware the sealed action was pending, a Philadelphia judge has ruled.
Philadelphia Court of Common Pleas Judge Albert J. Snite Jr. rejected Ace American Insurance Co.'s argument that it did not have to cover AmerisourceBergen's $17.6 million claim under the claims-made policy because the underlying qui tam action was first filed under seal in 2006, before AmerisourceBergen's 2007 policy with Ace began.
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