A unit of Bermuda-based Endurance Specialty Holdings Ltd. must cover defence costs for a brokerage that placed coverage and provided other services to the bank at the centre of the notorious Stanford Financial Group fraud, a federal court judge has ruled, according to a report by Business Insurance.

The publication said that New York-based Endurance American Specialty Insurance Co. owes a duty to defend broker Brown, Miclette & Britt Inc. (BMB) and one of its employees in connection with claims arising out of the alleged Ponzi scheme, ruled US District Court Judge Nancy Atlas of the Southern District of Texas in Houston.

Houston-based BMB, one of Stanford's brokers, and BMB employee Robert Winter are defendants in three lawsuits filed by victims of the alleged $8 billion fraud.

The victims, who include citizens of Mexico, The victims, who include citizens of Mexico, Venezuela and several other countries, allege that BMB and Mr. Winter provided Stanford International Bank with "safety and soundness letters" and failed to ensure that the letters properly described Stanford's insurance coverages.

Willis Group Holdings plc. also is named as a defendant in two of the suits.

BMB's and Mr. Winter's professional liability insurer, Endurance American, denied coverage for the claims, arguing that the underlying lawsuits are not based on "professional services" as required by the policy, but were based on securities violations, which are excluded.