Court Rules Insurer Not Liable for Telecom Legal Costs
A Tenth Circuit panel found an insured-versus-insured exclusion bars coverage for a former director's suit against Tri County Telephone Association.
Updated on Nov. 3, 2026 in Insurance
The Tenth Circuit ruled Tuesday that Twin City Fire Insurance Co., a Hartford Insurance Group subsidiary, is not liable for the legal costs of Tri County Telephone Association Inc., a Wyoming telecommunications company. The court affirmed a lower-court decision applying the policy's exclusion for suits between insureds.
Why it matters
The ruling reinforces that insured-versus-insured exclusions can bar coverage even when the suit arises from a corporate transaction. Companies and their directors may need to review whether such exclusions apply to claims brought by former managers.
The ruling was issued as an unsigned, unpublished opinion, meaning it does not establish binding precedent beyond this case. The source reports no dollar figures for the disputed legal costs or the policy limits.
The players
Twin City Fire Insurance Co.
A subsidiary of Hartford Insurance Group, the insurer that the Tenth Circuit found not liable for the telecom company's legal costs.
Tri County Telephone Association Inc.
A Wyoming-based telecommunications company whose request for insurer-funded legal defense was rejected by the court.
The details
A former director sued over Tri County Telephone Association's acquisition, and Tri County sought coverage from Twin City Fire under its policy. Twin City's policy excludes suits where one insured sues another, and the court held that exclusion applies, with no carveout for suits brought by former managers.
Timeline
Tuesday, November 3, 2026: Tenth Circuit issues the ruling on the coverage exclusion.
Market Dynamics
Insured-versus-insured exclusions are standard in directors and officers liability policies, designed to prevent coverage for disputes among the insured parties themselves. This Tenth Circuit ruling follows that established pattern by denying coverage where a former director sued the company.
Directors and officers should review whether their company's policies contain insured-versus-insured exclusions that could bar coverage for suits brought by former managers. Companies facing similar claims may need to budget for defense costs that insurers are not obligated to cover.
The takeaway
Coverage disputes often turn on the precise wording of policy exclusions, so reviewing those terms before a claim arises can prevent unexpected defense costs. Directors should confirm how their policies treat suits brought by former officers.
Further reading
For related coverage questions, see Insurance news and analysis across Wyoming.
Source note: This article includes information reported by Bloomberglaw.
