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Insurer shuts down in defending Western Union against terrorist financing suit

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An insurer’s war and financial services exclusion is relieved from providing coverage to prosecute an insured for allegedly aiding international terrorists responsible for the 2014 crash of Malaysia Airlines Flight 17 in eastern Ukraine .

The US District Court for the Southern District of New York has given a declaratory ruling to Hartford Fire Insurance Company that it has no duty to protect or indemnify Western Union, which is being sued by the family of one of the victims. , which alleges that Western Union provides “financial assistance” by facilitating money transfers to the Donetsk People’s Republic (DPR).

The plane was shot down by the Donetsk People’s Republic, a Russian-backed separatist group in eastern Ukraine. 298 passengers and crew members died in this attack.

In the underlying lawsuit against Western Union, the family of victim Quinn Schenzman, an American college student, makes a claim under the federal Anti-Terrorism Act. According to the family’s lawsuit, Western Union knowingly and with knowledge of its terroristic activities provided material support and financing to the DPR in the form of money transfer services upon which the DPR relied to purchase the weapons and equipment needed for its terrorist was. activities, including the July 2014 attack on MH17.

The family alleges that Western Union “knows, or knowingly exhibits indifference” to the fact that they provided material assistance to the DPR. The suit seeks unspecified damages.

The Hartford issued a commercial general liability policy to Western Union for the policy period of October 1, 2013 to October 1, 2014, with a limit of $1 million per incident and a total of $3 million.

Although the Hartford Fire initially refused Western Union’s request for coverage, it simply called for a boycott of the war; In subsequent arguments, it added the financial services exclusion as a reason.

The Hartford Fire argued that the lawsuit falls within the scope of a war exclusion in commercial general liability, which states that the policy does not apply to bodily injury or property damage “caused, directly or indirectly, by, . . . war, . . . a war-like action by a military force, . . . or rebellion, rebellion, revolution, [or] took power.”

Citing the facts in the family’s complaint, based on extensive news coverage and government information, the federal court found that there was no need to decide whether the Skansman’s case was subject to war and excommunication for war-like action. Because it comes under exclusion for rebellion. ,

“In essence, as alleged, the DPR was in the middle of a ‘violent uprising’ in eastern Ukraine to “overthrow the formed government” – in other words, an insurgency – when it shot down MH17,” US District Judge Jesse M Furman wrote in the opinion.

In any event, Judge Furman said, even if the boycott of the war did not defeat Western Union’s coverage claim, the policy would boycott financial services. It provides the exclusion that the policy does not apply to “Bodily Injury . . . as a result of failure by any insured to render or provide financial services to others.”

The court rejected the notion that its interpretation of the financial services exclusion would “absolutely swallow all coverage it provides to Western Union”, noting that it could, for example, lead to patent infringement claims or slip-ends. -Fall will not exclude coverage for lawsuits. ,

PHOTO: In this Friday, July 18, 2014, file photo, a piece of a plane bearing the sign “Malaysia Airlines” lies in the grass as a group of Ukrainian coal miners near the Malaysia village site of the crashed Malaysian passenger plane searched for. Rossippne, Ukraine. AP Photo/Dmitry Lavatsky, file)

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