Don't Let Insurance Companies Dodge Overdraft Settlement Claims

Ever since the nation's largest retail banks began settling out of the multidistrict litigation regarding overdraft fees last year, many insurance companies that sold them professional liability insurance have been trying to avoid paying the banks' insurance claims for those settlements.

These denials mainly have been premised on the notion that the settlement payments reflected the disgorgement of ill-gotten gains to which the banks were not legally entitled.

Insurance companies trying to dodge overdraft claims recently were dealt a severe blow by the U.S. Court of Appeals for the Ninth Circuit, which held that banks were entitled to the overdraft fees after all – essentially undermining the insurance companies' main argument against coverage.

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