Zurich and Evanston are facing a fresh lawsuit after being accused of stonewalling coverage for business clients caught up in a lawsuit - raising big questions for the commercial insurance world.
On August 20, 2025, Axiom Strategies, LLC, Garrison Management Group, LLC, and Vanguard Field Strategies, LLC filed a complaint in the US District Court for the Western District of Missouri, Western Division, against Zurich American Insurance Company and Evanston Insurance Company. The plaintiffs claim that Zurich and Evanston failed to honor their obligations under management and professional liability insurance policies by refusing to defend and indemnify them in an ongoing lawsuit, despite the policies’ express coverage for such claims.
The dispute centers on insurance coverage for an underlying lawsuit, Community Schools Initiative v. Vanguard Field Strategies, LLC, et al., case number 2:23-cv-00069-APG-EJY, pending in the US District Court for the District of Nevada. That suit alleges breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, fraudulent inducement, fraudulent misrepresentation, negligent misrepresentation, and deceptive trade practices against Vanguard, Axiom, and other parties. According to the complaint, Zurich and Evanston issued policies that provide coverage for these types of business risks, but have not provided a defense or paid defense costs.
The Zurich policy at issue is a “Zurich Select Plus” liability insurance policy, including a Management and Company Liability Coverage Part, issued to Garrison Management, Policy No. MPL 7647590-00, with a policy period of August 7, 2022, to August 7, 2023, and a liability limit of $1,000,000. The policy obligates Zurich to pay “Loss” on behalf of the company for claims involving “Wrongful Acts,” which are defined to include errors, misstatements, misleading statements, acts, omissions, neglect, and breaches of duties. The policy also requires Zurich to pay defense costs, including attorney fees, and to defend potentially covered claims.
Evanston’s policy is a liability insurance policy that includes a Professional Liability Insurance Coverage Part, issued to Garrison Management, Policy No. MKLV2PEO001138, with a policy period of August 7, 2022, to August 7, 2023, and liability limits of $2,000,000 per claim and $4,000,000 in the aggregate. The policy obligates Evanston to pay all sums that the insureds become legally obligated to pay as damages and claim expenses incurred as a result of a claim first made during the policy period by reason of a “Wrongful Act.” “Wrongful Act” includes any negligent act, error, or omission in “Professional Services,” which are identified as “Direct Mailing Including Campaign” and “Public Affairs.” The policy also requires Evanston to pay defense costs and to defend potentially covered claims.
According to the complaint, Zurich was notified of the claim and acknowledged receipt on April 27, 2023. After initial correspondence, Zurich allegedly ceased communicating with the insureds and did not provide a coverage position until April 18, 2025, when it denied coverage as to Garrison Management under the First Amended Complaint in the underlying lawsuit. The denial letter stated that there would be coverage but for certain exclusions and noted that the “coverage investigation [was] ongoing.” The plaintiffs submitted additional materials to Zurich on May 23, 2025, and requested reconsideration, but as of the filing of the complaint on August 20, 2025, Zurich had not responded.
The complaint alleges that Evanston was notified of the claim and acknowledged receipt on April 28, 2023. The assigned claims professional initially corresponded with the insureds, but Evanston later stated it could not make a coverage determination and opted to treat its policy as an excess policy. The complaint alleges that, after a change in claims handlers, Evanston failed to provide a coverage position despite repeated requests from the plaintiffs.
The plaintiffs are seeking declaratory relief, damages, statutory penalties, attorney fees, and a judicial declaration that the insurers must defend and indemnify the policyholders in the underlying lawsuit.
As this is a newly filed complaint, all allegations represent the claims of the plaintiffs and have not been proven in court. The outcome of the case remains to be determined.
