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Insureds sue Evanston and Markel over refusal to indemnify settlement
A complaint filed Aug. 12, 2026 in Alaska federal court says Evanston covered defense costs but later declined to pay toward a settlement tied to allegations in a separate Texas whistleblower case.
An Alaska federal lawsuit filed Aug. 12, 2026 accuses Evanston Insurance Company and its claim administrator, Markel Service, Incorporated, of refusing to indemnify an insured for a settlement, after the insurers reimbursed defense costs. The dispute centers on a coverage fight over alleged liabilities and whether policy language required Evanston to fund the settlement.
According to the complaint, Kodiak, Incorporated and four affiliated Koman companies say the insurer owes indemnity for an agreement tied to an “Underlying Action,” a federal qui tam case in Texas brought by whistleblowers and based on allegations that former Koman Construction employees made regarding False Claims Act and Anti-Kickback violations. The Alaska complaint describes those underlying allegations as unproven in the separate Texas case and says the current action concerns coverage duties for that matter.
Insurance Business reports that Evanston issued an Environmental Common Policy with Professional Liability coverage for March 1, 2023 to March 1, 2024 with a $1,000,000 Each Claim limit and $2,000,000 aggregate, alongside a For Profit Management Liability policy with D&O and Employment Practices components each with a $1,000,000 limit. The filing also cites a Commercial Excess Liability policy with a $5,000,000 limit and points to a regulatory endorsement that, according to the insureds, blocks the professional-services exclusion from applying to claims involving alleged False Claims Act violations and related statutes.
The complaint alleges that Markel’s Oct. 29, 2024 coverage determination found the False Claims Act allegations triggered the D&O portion and retaliation allegations triggered the Employment Practices portion, with the professional liability portion addressed later. It further alleges that beginning in June 2026, after the insureds were asked to participate in mediation, Evanston asserted the management liability policy was eroded, exhausted, and closed, and declined to pay further toward the settlement.