Arch Insurance Unit Dodges Fraudulent Billing Case on Appeal

A directors and officers insurer had no duty to defend or indemnify a hospital management company in underlying litigation alleging fraudulent billing, an Illinois appeals court ruled.

Coverage for the costs of the underlying suit against People’s Choice Hospital LLC was barred by an exclusion in the Arch Capital Group Ltd. unit’s policy for interrelated wrongful acts, the Illinois Appellate Court, First District said in a Monday order affirming a lower court ruling.

“Specifically, Arch asserted the claim triggered that exclusion because it was interrelated with another claim brought by a hospital against PCH in a different lawsuit before the ...