"Mixed Subjective/Objective Standard", by Andrew S. Kowlowitz, published in Professional Liability Underwriting Society (PLUS) Journal12/2008

Article by Andrew S. Kowlowitz: New York Appellate Court adopts a mixed "subjective/objective" standard to determine the scope and application of the "prior knowledge" insurance policy exclusion. Published in Professional Liability Underwriting Society (PLUS) Journal, December 2008.

On September 29, 2008, the New York State Appellate Division, First Department, found that a law firm's professional liability insurers could not invoke a "Prior Knowledge" Exclusion to disclaim coverage, holding that although the insured law firm anticipated claims against its client, and that claims against the law firm may be brought as well, no "prior knowledge" existed because the firm justifiably believed it did nothing wrong. In reaching its decision, the New York Appellate Court applied a mixed "subjective/objective" test to determine whether "prior knowledge" existed, which takes into account the insured's culpability from the perspective of a "reasonable attorney."

To read a detailed explanation of the law and to view the article in its entirety, click here and scroll to page 4.

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