Delaware Court Deals Loss to Insurers Over Housing Fraud Lawsuit

Directors and officers insurers, including an Allianz SE unit, may be liable for legal defense costs in a Chicago housing fraud suit brought against a property owner under the False Claims Act, a Delaware state court ruled.

A policy exclusion for breach of contract doesn’t preclude coverage for a suit alleging Pangea Equity Partners LP and affiliated companies submitted false information regarding rent comparability in connection with their participation in the US Department of Housing and Urban Development’s Section 8 Housing Choice Voucher Program, Delaware Superior Court Judge Meghan A. Adams said in a Wednesday ruling.

Relying largely on a ...