An insurer is fighting a $10 million crime claim, arguing its policyholder learned of an alleged $106 million theft before the policy even started.
Beazley Insurance asked a federal court in Nevada on June 30, 2026, to declare that it owes nothing on a crime claim filed by Innova Medical Group, a COVID-19 test-kit distributor. The whole dispute comes down to a date.
Innova sought coverage for what the complaint calls the "alleged theft of $106,184,673.14" by two former directors and officers. The company has alleged the pair funneled sales commissions to an entity they secretly owned, then disguised the money as payments to legitimate intermediaries.
Beazley's case does not turn on whether the alleged theft happened. It turns on when the company discovered it.
The Employee Dishonesty coverage carried a $10 million limit and a $250,000 deductible for each loss. It covers "Loss resulting directly from Employee Theft," but only "Loss which is Discovered during the Policy Period." The policy defines discovery as the point when a member of the insured's "Control Group" first becomes aware of "facts that would cause a reasonable person to believe a Loss covered by this Policy has been or will be incurred." That group is defined as "the General Counsel, Human Resource, Internal Audit or Risk Management departments of the Insured or their equivalent."
The policy started on October 19, 2022. Beazley says a company principal who qualifies as a Control Group member learned of the alleged theft on or before September 9, 2022 - more than a month too early. Discovered before the policy began, the insurer argues, means no coverage.
To make the point, Beazley points to statements those parties made elsewhere. The complaint says the company, a related company, and a company principal represented "on numerous occasions" that they first became aware of the alleged wrongdoing on September 9, 2022 - in a proof of loss to another insurer, in a lawsuit against a former officer, and in a sworn declaration. After hearing allegations that the pair had "defrauded Innova," the complaint says, the principal hired outside counsel and terminated one officer on September 30, 2022 - all before the policy took effect.
Beazley also wants the option to rescind the policy. It says Innova's application, signed on November 7, 2022, declared no awareness of "any loss(es) discovered during the past five (5) years which involve or potentially involve, a peril of the type covered by the policy." The insurer alleges the company already knew about the suspected scheme and stayed quiet, and that it would not have issued the policy on the same terms had it known.
For claims and underwriting teams, the filing pairs two coverage defenses that rest on the same date. The first is the discovery trigger: coverage applies only to a loss found during the policy period, and Beazley argues the finding came before inception. That turns on whether the company principal counts as part of the insured's "Control Group," which the policy defines to include the general counsel, HR, internal audit or risk management functions - roles Beazley says the principal filled. The second is rescission: Beazley says the application it relied on left out the suspected scheme, and calls that omission material to the policy's terms and premium.
The two former officers described in the underlying allegations are not defendants in this case. The only defendant is Innova Medical Group.
None of these allegations has been tested in court, and no judge has ruled on whether coverage applies or whether Beazley may rescind.
