District Court Finds Coverage For Restitution Agreed-To In A Settlement

Insurers often deny coverage for restitution on the basis of a 2001 precedent that ruled they could do so on the grounds of public policy. A recent district court case, however, found coverage in a case where the restitution occurred as the result of a settlement. In U.S. Bank Nat’l. Assoc. v. Indian Harbor Insurance Company, a district court in Minnesota said that by excluding coverage for restitution in cases where there had been a final adjudication, the policy “by implication” should cover restitution stemming from a settlement.