Court Addresses Trigger Of Coverage For Malicious Prosecution
When it comes to trigger of coverage for malicious prosecution (usually following the exoneration of someone wrongfully convicted), typically only the liability policy on the risk at the time that the wrongful charges were brought is obligated to provide coverage.  Key to the courts adoption of this majority rule is that the policy provides coverage for a personal injury offense (e.g., malicious prosecution) occurring during the policy period. 

Courts usually reject the argument that a continuous trigger should apply, thereby disallowing potential coverage under all policies on the risk from the time that the charges were brought until the exoneree is freed from custody.  In other words, all policies on the risk, while a person was wrongfully incarcerated, are not obligated to provide coverage.      

And that’s what the Kentucky appeals court said in City of Newport v. Westport Ins. Co., No. 2022-CA0384 (Kt. Ct. App. Oct. 6, 2023).  The court held that policies issued by Westport -- providing coverage for a personal injury offense occurring during the policy period -- were subject to the majority rule and not obligated to provide coverage as they were not on the risk at the time that the charges were initially brought. 

In reaching its decision, the court departed from the Sixth Circuit’s 2020 decision in St. Paul v. City of Newport – involving the same underlying claim – that permitted application of a continuous trigger to malicious prosecution. But there, the policies [law enforcement policies] were distinguishable, as they provided potential coverage for “injury or damage that . . . happens while this agreement is in effect.”