On November 8, 2022, the Eleventh Circuit Court of Appeals agreed with the U.S. District Court for the Middle District of Florida that Mount Vernon Fire Insurance Co. did not have a duty to defend Global Travel International Inc. in an arbitration between Global Travel and Qualpay Inc. despite Global Travel’s best efforts to bring the claim within coverage.
Global Travel and Qualpay entered into a merchant card processing agreement pursuant to which Global Travel would pay certain fees and expenses and Qualpay would process Global Travel’s credit and debit card transactions.
Mount Vernon insured Global Travel under a professional errors and omissions liability insurance policy.
In February 2019, Global Travel discovered that an employee had embezzled approximately $1.1 million of its funds, leaving the company unable to fulfill its obligations to Qualpay under the agreement.
Qualpay demanded arbitration for breach of contract, alleging more than $300,000 in damages due to Global Travel’s failure to pay pursuant to the terms of the agreement.