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Harvey Weinstein’s Insurance Companies Sue to Avoid Liability
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Harvey Weinstein, age 66, a former film producer and co-founder of the entertainment company Miramax, was arrested on May 25th.   He is charged with two counts of rape (forced sexual intercourse),  one count of criminal sexual act (forced oral sexual conduct),  and predatory sexual assault  (rape or criminal sexual act plus serious physical injury or the threat of immediate use of a dangerous instrument).   The latter charge carries a minimum sentence of 10 years in prison and a maximum of 25 years to life.  Weinstein is out of prison on $1 million bail (a sum of money paid by or on behalf of a criminal defendant to secure the defendant’s release from custody; if the defendant does not return to court, the bail money becomes the property of the state).  The prosecutor is the Manhattan, New York District Attorney; the court is New York State Supreme Court. Weinstein has pled not guilty.

Defending criminal charges can be costly, particularly when the charges are serious felonies as in Weinstein’s case.  He seeks coverage from his insurance companies for the cost of his legal defense team.  He has policies (contracts between an insurance company and an insured that detail the types of conduct for which insurance coverage is and is not covered) with Steadfast Insurance Company, an affiliate of Zurich North America, and Chub, Ltd.

 

His insurance companies have filed a lawsuit seeking a declaratory judgment (a court order that resolves the rights of litigants in a circumstance where no monetary relief is sought) that the criminal cases are outside the scope of coverage provided by his policies .  Additionally Steadfast is seeking to recoup money it has already paid in connection with Weinstein’s criminal case.

 

Among Weinstein’s coverage is an employment practices liability policy.  This type of insurance covers wrongful acts arising from employment practices.  The most frequent types of claims include sexual harassment, discrimination, wrongful termination, and retaliation.  Also covered are employment-related claims of invasion of privacy, defamation,  failure to promote, deprivation of a career opportunity, and  negligent evaluation.  Most policies exclude intentional acts, bodily injury, dishonest acts, and property damage.  

 

In addition to attorneys’ fees, Weinstein seeks reimbursement from the insurance companies for his $1 million bail.  The companies take the position that bail is not within the definition of defense costs or loss under the policy.

 

Additionally, 11 civil suits (cases seeking monetary damages rather than punishment) have been pursued against the movie producer for sexually harassing or assaulting behavior over the past three decades.  Also, the NY Attorney General has accused  Weinstein of civil and human rights violations.  The insurance companies also are refusing to pay the legal defense in those cases and seek a court order supporting their refusal. 

 

Weinstein is also under investigation for alleged sex crimes in Los Angeles and London.  He denies non-consensual sex with anyone. 

 

Weinstein has countersued the insurance companies asserting breach of contract and bad faith.  His legal team notes that Weinstein has paid “a fortune” in premiums during the past 25 years. 

 

One of his attorneys is Ben Brafman who represented Michael Jackson in his acquittal of child molestation charges.

 

DISCUSSION STARTERS:

Based on the information in this article, in your opinion should the insurance companies be required to pay Weinstein’s defense expenses?  Why or why not?

 

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