Hunton Insurance Recovery Blog

In today’s unpredictable world, event cancellation insurance is essential for event organizers, artists and venues. With risks ranging from natural disasters and terrorism to health crises like COVID-19, this insurance protects against financial losses when events are disrupted. But with this coverage comes a web of legal complexities.

Monitoring and managing the risks that may impact supply chains in Latin America are key to maintaining their functionality and reliability, as a single point of failure can quickly ripple to stop or limit business operations and cause serious financial and reputational losses.  In a recent Daily Business Review article, counsel Jorge R. Aviles and associate Jae Lynn Huckaba provide insight into the insurance coverage options available to manage some of the key supply chain risks in 2025 for policyholders doing business in Latin America.

Los Angeles continues to be devastated by wildfires, and our thoughts are with those who have been affected. Tragically, lives have been lost. Homeowners and businesses ordered to evacuate have left behind properties that suffered enormous property damage and loss. At this time, more than 15,000 structures have been burned and counting. Landmarks, places of worship, schools and notable business are among the structures that have been damaged or destroyed. Recent estimates have pegged insured losses in the $20 billion to $30 billion range with some estimates coming in even higher.

Safety is the number one priority. At some point, though, the focus will shift as the fires seize and those affected rebuild and replace their property. There has already been much talk of insurance availability and maximizing insurance recoveries will be a key component of the recovery process. For those who will go through the insurance claims process, we have prepared critical action items to help policyholders navigate the claim process. We also invite you to visit our Wildfire Insurance Resource Center for additional helpful resources and materials, including a seven-part wildfire insurance coverage series that includes an overview on handling the claims process.

Officers and directors must constantly navigate new and emerging risks, and that trend will continue in 2025. Ever-growing use (and misuse) of artificial intelligence, increased geopolitical risk, boardroom fallout following cybersecurity incidents, a new administration in the White House, and many other factors point to another eventful year for D&O exposures. Ensuring adequate protection for company leadership is more important than ever to attract and retain top talent.

On December 13, 2024, the North Carolina Supreme Court refused to follow the herd of poorly and in many cases, erroneously-reasoned decisions and applied settled rules of insurance policy interpretation to find Cincinnati Insurance Company owes coverage to a group of restaurants suffering business interruption losses stemming from the COVID-19 pandemic.  While the North Carolina Court’s decision in North State Deli, LLC v. The Cincinnati Insurance Co., may come too late for many, the decision nevertheless offers reassurance that some courts remain willing to stand firm on fundamental guiding principles.

As businesses integrate artificial intelligence (AI) into their operations, the potential for AI-associated risk increases. The recently filed lawsuit, A.F. et al. v. Character Technologies, Inc. et al., illustrates the gravity of such risk. The lawsuit not only highlights the potential risks associated with products utilizing AI technology but also provides an illustration of how insurance can help to mitigate those risks.

In the year ahead, supply chains for corporate America will likely be vulnerable to disruptions arising from multiple risks—from natural disasters to geopolitical strife—heightening companies’ dependence on insurance to manage their risks. Bloomberg Law’s recent article, “Climate, Labor Disruptions Leave Companies Reliant on Insurers” features commentary from counsel Jorge Aviles on how insurance can help shield businesses from financial losses following a supply chain-related loss. “Any business with operations that rely on a supply chain should be looking into insurance coverage to manage risks.” That safety net “gives the company the confidence that it won’t be out of pocket,” Aviles says. “It gives the employees and managers and directors of the company confidence as well, and it gives your lenders and investors confidence that the company won’t be on the hook for these massive losses.” “Companies relying on such coverage should keep in mind the tiers of suppliers,” Aviles said. “A policy might offer coverage for a direct supplier, for example, but not an indirect supplier that’s disrupted.”

It is common knowledge in the insurance industry that an insurer’s duty to defend is broad.  Recently, a U.S. District Court reminded us just how broad that duty is when it held that a complaint with only two scarce factual allegations triggered an insurer’s duty to defend.

The extent of coverage is often a function of how many occurrences (or accidents) are involved in a claim. For example, lawsuits based on product liability claims may involve a flawed manufacturing process constituting a single occurrence, or the sale of each individual product may result in hundreds of occurrences. A recent ruling involved the number of occurrences debate and resulted in the insured establishing coverage for up to $55 million instead of just $5 million in limits. 

A California appeals court recently reversed a trial court’s determination that a D&O insurer had no duty to reimburse legal fees incurred by a company’s former CFO in defending against an SEC civil enforcement action, shareholder derivative claims, and counterclaims by the company asserting that the CFO breached his indemnification agreement. In doing so, the appeals court rejected the insurer’s argument that the defense costs the company advanced to the CFO were “restitutionary” damages excluded from the D&O policy’s definition of loss.

The court explained that its ruling favoring broad executive protection was consistent with the generally understood purpose of D&O liability insurance—to provide protection for individuals whose business decisions, made in their capacity as the management of a corporation, subject them to the risk of personal liability for losses that the corporation or its shareholders may incur.