Medill

Appellants, former directors and officers of a nonprofit organization, seek coverage under a liability insurance policy for claims of negligence and breach of fiduciary duty asserted against them in litigation which arose after the organization and its related entities defaulted on their contractual payment obligations on a series of municipal bonds. The bondholders and the trustee for the bonds sued the directors and officers individually. The insurer denied coverage on three grounds: The policy’s definition of “loss” excludes coverage for claims arising out of breach of contract; the policy excludes coverage for claims arising out of the issuance or endorsement of bonds; and the policy excludes coverage for claims arising out of the failure to pay on financial instruments. Summary judgment was granted in favor of the insurer. We agree there is no duty to defend appellants under the policy and affirm.

FACTUAL AND PROCEDURAL BACKGROUND

The Parties and Relevant Nonparties

Heritage Housing Development, Inc. (Heritage), is a nonprofit organization and the parent company of various nonprofit entities (Heritage entities). Heritage raised money through municipal bond…