Kik Interactive Inc. sought indemnification from AIG Insurance Company of Canada for legal expenses incurred defending an action by the Securities Exchange Commission (SEC) related to its cryptocurrency, Kin.
Kik argued the SEC claim was a securities claim covered by its AIG PrivateEdge Plus policy.
AIG denied coverage, citing exclusion 4(j) for claims arising from any public offering of securities.
Kik contended the exclusion was ambiguous or, alternatively, that an exception to the exclusion applied.
The court found the exclusion unambiguous, applying to all public offerings of securities, not just initial public offerings of shares.
It also determined that Kik failed to satisfy the conditions for the exception to the exclusion, as it did not provide proper notice or underwriting information, nor did AIG offer additional coverage.
Consequently, Kik's application for indemnification was dismissed.