Insurance coverage for civil RICO claims against professionals: The impact of recent trends and developments
Litigants alleging violations of the Racketeer Influenced Corrupt Organizations Act (RICO) have increasingly attempted to ensnare attorneys and accountants. The rapid expansion of RICO lawsuits presents complex questions regarding insurance coverage under professional liability policies. Coverage for RICO claims against professionals may not automatically be excluded by typical policy language. The federal circuits have provided conflicting definitions of the elements of a RICO violation, including the nature of the intent that must be established against a defendant. The issues significantly affect the application of intentional and criminal act exclusions found in professional liability policies. Developing trends in the courts, including the recent Supreme Court decision in Reeves v. Ernst & Young will also undoubtedly have an impact upon these controversies and, indirectly, their coverage implications. The circuit courts are also divided on whether RICO liability can be imposed vicariously, an issue of great significance to professional firms and their insurers. Coverage may be available to a firm or its members for vicarious liability where a valid basis exists for disclaiming coverage for the person who committed the RICO violation. The RICO treble damages remedy creates another common coverage dispute. Recent cases analyzing the compensatory and punitive components of the treble damages remedy provide significant guidance regarding its insurability. Commentators have struggled with RICO insurance coverage issues during the twenty-two years since Congress enacted the legislation. While developing precedent in recent years provides a greater perspective on coverage issues, many unresolved questions remain. This article explores common coverage controversies arising out of RICO claims against professionals and the coverage implications of developing trends and controversies in RICO jurisprudence. 139 refs.
- OSTI ID:
- 468719
- Journal Information:
- Tort and Insurance Law Journal, Vol. 28, Issue 3; Other Information: PBD: Spr 1993
- Country of Publication:
- United States
- Language:
- English
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