Failure to disclose a previous crime can end up voiding a coverage. If a company or an employee was found to be guilty of a crime and has been less than truthful in disclosing it, an insurance carrier is well within their rights to deny the coverage outright. In the court case Nat’l Fire & Marine Ins. Co. v. Holper, the insurer sued the doctor in charge of their client for wrongful death following an overdose. While it was going on, the doctor plead guilty in Nevada to drug trafficking charges. The insurer started proceedings to deny coverage based on the line “any willful violation of any law, statute or regulation”[1] The courts ruled that they could do this and as a result his insurance would not cover the civil suit.
When your talking about a civil case, most carriers won’t cover a client, if they’ve been proven guilty in a criminal case. As a result, these coverages will be denied or lessened to prevent risk to the insurer. Make sure that both sides know what they’re getting into before coverage is signed.
[1] https://professionalliabilitymatters.com/2019/11/04/no-coverage-for-the-guilty/