Applying Illinois law, the U.S. District Court for the Northern District of Illinois has held that a D&O policy’s professional services and contract exclusions do not bar coverage for lawsuits seeking damages for fees and expenses paid to the insured in connection with a cancelled trade show. Fed. Ins. Co. v. Healthcare Info. & Mgmt. Sys. Soc’y, Inc., 2021 WL 4864142 (N.D. Ill. October 19, 2021).

While finding that the insurer had a duty to defend, the court also held that the insured did not adequately plead a cause of action for bad faith against the insurer.

The insured, a non-profit health information systems advisory firm, was sued in two lawsuits for repayment of non-refundable fees, travel expenses, and other expenses incurred by exhibitors after the insured cancelled its annual global conference due to the COVID-19 pandemic.

The first lawsuit sought return of fees and damages for expenses incurred in connection with the cancelled conference.

The second lawsuit, a putative class action, alleged that the insured breached contracts with the putative class members by refusing to refund fees under force majeure clauses in the contracts.