First Insurance Funding Corporation v. Federal Insurance Company

RIPPLE, Circuit Judge.

Defrauded of over $4.3 million, First Insurance Funding Corporation (“First Insurance”) sought indemnification for these losses under the terms of a financial institution bond that its parent corporation had purchased from Federal Insurance Co. (“Federal”). When Federal denied the claim for coverage, First Insurance filed this action seeking a declaratory judgment of Federal’s obligation to indemnify for these losses. In addition, First Insurance alleged that Federal’s actions constituted not only a breach of contract but also an unreasonable and vexatious denial of…