March 1, 2022 (WASHINGTON, DC) – The Surety & Fidelity Association of America (SFAA), a nonprofit, nonpartisan trade association representing all segments of the surety and fidelity industry, filed a motion seeking to file an amicus brief with the United States Court of Appeals for the Ninth Circuit in support of the Appellant’s petition for the rehearing of the court’s review of the District Court’s decision in Ernst & Haas Management Company, Inc v. Hiscox, Inc.
In the amicus brief, SFAA argues the decision made by the Ninth Circuit Court should be vacated and the District Court’s original finding that the loss in this case was an “indirect” loss, and therefore not covered by the fidelity bond, should be affirmed.
“Fidelity bonds issued in the United States use intentionally narrow causation language requiring losses to be the ‘direct result of’ policy specified perils,” said Julie Alleyne, vice president, policy and general counsel, SFAA. The panel’s decision to provide coverage for an indirect loss is contrary to the long-standing law in the Ninth Circuit and other jurisdictions, and the intent of the industry.”
In the amicus brief, SFAA explains that should the panel’s decision be allowed to stand, the unintended expansion of policy coverage would likely lead to significant negative impacts to the industry and the businesses they serve including reduced availability of fidelity insurance and significantly increased premiums.
The Surety & Fidelity Association of America (SFAA) is a nonprofit, nonpartisan trade association representing all segments of the surety and fidelity industry. Based in Washington, D.C., SFAA works to promote the value of surety and fidelity bonding by proactively advocating on behalf of its members and stakeholders. The association’s 410 member companies write 98 percent of surety and fidelity bonds in the U.S.
For more information visit www.surety.org.