Insurer, Real Estate Co. Resolve Policy Misrepresentation Row

June 16, 2026 - 07:59

A legal battle over a $6.5 million insurance claim has been resolved after an insurer agreed to settle a lawsuit against a commercial real estate company and one of its former directors. The dispute centered on whether the insurer was obligated to cover the firm for losses tied to the sale of a client's properties. The insurer had argued that the real estate company made false statements when applying for an errors and omissions policy, which would have allowed the insurer to deny coverage entirely.

The case stemmed from a claim by a client who alleged the firm mishandled the sale of multiple properties, resulting in significant financial damages. When the real estate company sought coverage under its professional liability policy, the insurer refused to pay, pointing to alleged misrepresentations in the initial application. The insurer claimed the firm failed to disclose prior legal actions or disputes that would have affected the policy's terms.

Rather than proceeding to trial, both sides reached a settlement. Details of the agreement were not disclosed, but the resolution ends a legal fight that highlighted the risks of incomplete or inaccurate information on insurance applications. Legal experts note that such disputes underscore the importance of full disclosure when applying for professional liability coverage, as even unintentional omissions can lead to coverage denials. The real estate firm and its former director are no longer facing the threat of a $6.5 million uninsured loss, though the settlement likely involved a payment from the insurer to close the matter.