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scot Specialty Insurance has filed a federal suit in Chicago on September 15, 2025, to limit its Errors & Omissions (E&O) exposure after a series of wire‑fraud incidents cost nearly $750,000 in real‑estate closings. The company seeks a ruling on the extent of coverage its policy offers when title agents fall victim to fraud.

    The dispute stems from two separate transactions involving Tek Title LLC, an Ascot‑insured title agent. In the first case, High 5 Group LLC lost almost $300,000 when a scammer, posing as the company’s principal and using a spoofed email address, redirected closing funds. High 5 pursued the money from Tek Title and attorney Samuel Einhorn, filing suit after the funds never appeared. The second incident involved First American Title Insurance Company, which had hired Tek Title for a property sale. A fraudster again used a fake email to trick Tek Title into wiring $447,174.53 to a fraudulent account. First American covered most of the loss for the buyer but sought $115,027.23 from Tek Title after recovering part of the funds.

    Ascot’s policy contains a Dishonest Conduct Exclusion that bars coverage for losses arising from fraud, theft, or unauthorized computer access, regardless of who commits the act. The policy does, however, provide a limited extension for cases where the insured negligently fails to prevent another party’s dishonest conduct. That extension is capped at $25,000 total, including legal fees, no matter how many claims or parties are involved.

    The insurer is asking the court to confirm that the $25,000 cap is the maximum liability for both lawsuits and that the broader E&O policy does not apply due to the fraud exclusion. The case remains at the complaint stage, underscoring how cyber‑fraud and traditional title risks intersect and how policy wording can dictate outcomes.