Ascot Specialty Insurance is battling in federal court to cap its E&O liability after wire fraud drained nearly $750,000 from real estate closings.
On September 15, 2025, Ascot Specialty Insurance Company filed suit in Chicago, seeking a ruling on just how much coverage its errors and omissions (E&O) policy provides when fraudsters strike title agents.
The dispute centers on two real estate transactions where criminals, using deceptive emails, convinced Tek Title LLC – a title agent insured by Ascot – to wire large sums to fraudulent accounts.
In the first incident, High 5 Group LLC lost nearly $300,000 when a scammer, posing as the company’s principal with a lookalike email address, redirected the closing funds. High 5 demanded the money from Tek Title and attorney Samuel Einhorn, eventually filing suit when the funds failed to appear.
The second incident involved First American Title Insurance Company, which had engaged Tek Title for a property sale. Once again, a fraudster used a fake email to trick Tek Title into wiring $447,174.53 to the wrong account. First American covered most of the loss for the homebuyer but sought reimbursement of $115,027.23 from Tek Title after recovering a portion of the funds.
Ascot claims its E&O policy contains a Dishonest Conduct Exclusion, barring coverage for losses stemming from fraud, regardless of who commits it. The policy defines “dishonest conduct” broadly, including fraud, theft, and unauthorized access to computer systems.
However, the policy does offer a narrow extension for cases where the insured negligently fails to prevent someone else’s dishonest conduct. That coverage is capped at $25,000 total, including legal fees, no matter how many claims or parties are involved.
Ascot is asking the court to confirm that this $25,000 cap is the full extent of its liability for both lawsuits, and that the broader E&O policy does not apply due to the fraud exclusion.
The case is at the complaint stage, with no decision yet from the court. The dispute highlights how cyber risks and traditional fraud are converging in real estate, and how the fine print in policy language can make all the difference when disputes arise.