Post-Termination Correspondence Between Insured And Its Former Officer Did Not Constitute A "Claim"

The United States Court of Appeals for the Eleventh Circuit, applying Florida law, has held that letters from an insured company explaining the basis for termination of its CEO and President and requesting that he preserve documents and return company equipment did not constitute a "claim" because they did not include a demand for monetary relief or any other legal remedy. Scott v. Certain Underwriters at Lloyd's London, et al., 2025 WL 2443382 (11th Cir. Aug. 25, 2025). The court also held that the correspondence was not a valid "notice of circumstances" per the policy's terms.

The plaintiff was terminated from his role as CEO, President, and Secretary of the insured company after a failed attempt to purchase the majority interest held by the insured's controlling investor. After his termination, the former officer threatened legal action against the insured entity, which responded with a series of letters accusing the former officer of misconduct, demanding that he return company property, and requesting the preservation of documents. The insured never sent, nor did the former officer ever receive, a summons, subpoena, or formal arbitration demand during the applicable policy period. The former officer sued the insured for wrongful termination and entered into a settlement agreement. He ultimately initiated coverage litigation against the company's insurer, but the district court dismissed the case because the written correspondence did not constitute a "claim," and the former officer did not provide a sufficient "notice of circumstances" to implicate coverage.

The Eleventh Circuit affirmed, agreeing that the letters between the terminated officer and the insured did not qualify as a "Claim . . . for a Wrongful Act" because they did not contain a demand for relief against the former officer. The policy defined a "claim" to mean, in relevant part, "a written demand for monetary damages, non-monetary, or injunctive relief against any of the Insureds." The letters explained the basis for the officer's termination and detailed post-termination expectations, such as returning equipment and preserving documents, but they did not request monetary payment or demand any other legal remedy. At best, in the court's view, the letters were "anticipatory posturing for a future dispute" regarding the officer's conduct, which was insufficient to satisfy the policy definition.

The court also agreed with the insurer that none of the letters constituted a valid "notice of circumstances . . . that may reasonably be expected to give rise" to a claim as would be required to preserve the potential for future coverage under the policy. The terminated officer stated in a letter to the insured that he intended to seek monetary compensation for damages caused by the insured, but this letter did not identify circumstances that would lead to a claim against him, as required under the policy. Rather, the letter reflected the ex-officer's demands surrounding his alleged wrongful termination. The court also noted that, after his termination, the plaintiff no longer qualified as an officer who could provide a notice of circumstances under the policy.

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