Court Holds Insurer Must Cover FCA Settlement Despite “Fraudulent Acts” Exclusion
In a significant decision for policyholders facing False Claims Act (“FCA”) claims, the Eastern District of Virginia granted judgment on the pleadings to a government contractor against its professional liability insurer. Guidehouse Inc. v. Continental Casualty Co., No. 1:25-cv-1601 (E.D. Va. Sept. 29, 2026). The court held that the insurer must cover the contractor’s $7.6 million qui tam settlement (less a $5 million retention) and its costs of responding to two DOJ civil investigative demands (“CIDs”). Notably, in so holding, the court determined that the policy’s Deliberate Acts exclusion for “dishonest” or “fraudulent” acts did not apply.
DOJ Reaches $9.8 Million Settlement with Genetic Testing Company Illumina Inc. to Resolve FCA Allegations
DOJ announced that genetic testing company Illumina Inc. will pay $9.8 million to resolve allegations that it sold genomic sequencing systems with cybersecurity vulnerabilities to the various federal Departments and agencies in violation of the FCA. According to DOJ Civil Division Assistant Attorney General Brett A. Shumate, “This settlement underscores the importance of cybersecurity in handling genetic information and the Department’s commitment to ensuring that federal contractors adhere to requirements to protect sensitive information from cyber threats.”
