Hunton Insurance Recovery Blog

The SEC’s effort to rescind its 2024 climate disclosure rules marks a significant change in federal ESG regulation, but it should not be mistaken for a retreat from climate-related disclosure risk.

The Pennsylvania Supreme Court’s recent decision in Samsung Fire & Marine Insurance Co. v. RI Settlement Trust, No. 61 EAP 2024 (Pa. July 21, 2026), rejected three insurers’ attempts to avoid coverage for lawsuits alleging that hotel operators enabled or profited from sex trafficking based on Pennsylvania’s purported public policy against sex trafficking.

The court found that Pennsylvania had no such articulated public policy against insuring those kinds of claims and, absent an exclusion barring coverage for the alleged conduct, the insurance contract would be enforced as written. The ruling is an important reminder for policyholders that courts will enforce the agreed-upon language in policies and will not allow insurers to deny coverage by invoking insurability defenses to eliminate coverage without a clearly articulated public policy in the relevant jurisdiction.

Policyholders facing “related” claim denials under D&O policies should take note of the recent Delaware Superior Court decision, Big V Capital LLC v. Great American Insurance Company (Del. Super. June 30, 2026), where the court held that a derivative action filed during a renewal policy period was covered—even though it was related to an earlier books-and-records action that the policyholder had not reported under the prior policy. The decision turned on the specific structure and wording of the policy at issue but reinforces core policyholder-friendly principles under Delaware law, including construing coverage broadly while refusing to deny claims absent a clear and specific exclusion.

A policyholder’s settlement negotiations—even without a formal proceeding like arbitration or mediation—can give rise to its insurer’s duty to defend.

The Fifth Circuit in BPX Prod. Co. v. Certain Underwriters at Lloyd's London found that because the contractor master services agreement (MSA) required the negotiations, the negotiations were not informal and were a type of alternative dispute resolution (ADR) proceeding. This case emphasizes that trade policyholders and risk management teams should give serious consideration to ADR provisions when working up construction contracts, such as ensuring that the ADR provision requires initial negotiations if the parties seek that type of alternative resolution. These provisions not only pave an avenue for dispute resolution out of court but can also serve as the impetus to trigger an insurer to defend, and indemnify, the claim.

A coverage extension ordinarily does what its title suggests: it extends coverage beyond the standard policy form. But what happens when an insurer tries to use an insurance extension to exclude coverage? That was the question in Parsons v. Crum & Forster Specialty Insurance Company, in which the Indiana Court of Appeals held that the same principles limiting broad pollution exclusions also apply when an insurer invokes a pollution coverage extension to narrow coverage. The result was a significant victory for the policyholder.

In Hemisphere Media Group, Inc. v. Fair American Select Insurance Co., the Delaware Superior Court held that when a D&O policy contains an allocation provision requiring the parties to use “best efforts” to reach a fair allocation but does not expressly mandate a specific allocation methodology in the event of disagreement, Delaware’s policyholder-friendly “larger settlement rule” applies by default. The court rejected the insurer’s argument that references to relative legal exposures and benefits constituted a binding allocation framework, finding instead that the common relative-exposure language governs negotiations only and does not displace applicable law when negotiations fail.

Corporate transactions are on the rise. A recent report by Aon reveals that between 2024 and 2025, the average deal value for its North American clients increased by 73 percent. Deals exceeding $1 billion in value increased 26 percent. This growth points to a healthy transactional market and increased deal activity, creating meaningful opportunities for businesses and investors to pursue strategic acquisitions. 

In 3371 Reading, LLC v. Liberty Mutual Group, the Sixth Circuit did something courts do not always do in coverage disputes: it refused to let an insurer avoid liability based on a technical policy condition that could never actually be satisfied.

The decision is a straightforward reminder of two core principles. First, policies must be interpreted from the standpoint of a reasonably prudent insured. Second, hyper-technical conditions cannot be used to deny coverage where compliance is never possible.

Whether a loss counts as one “occurrence” or many can determine whether meaningful coverage is available. In J.M. Smucker Company v. Ace American Insurance Company, the Sixth Circuit held that thousands of claims tied to alleged salmonella contamination in peanut butter arose from a single occurrence—not hundreds of separate occurrences grouped by production lot. For manufacturers and other policyholders facing recall or mass-claim exposure, the decision is a useful reminder that courts applying a cause-based analysis should look to the common source of the alleged harm, not the number of claimants.

A Delaware trial court recently addressed a relatively uncommon insurance coverage dispute—litigated claims under a buyer-side representations and warranties policy—arising from a global surface technology firm’s assertion that the chemical company it acquired breached three representations in the deal documents. The Delaware Superior Court decision, in Surteco North America, Inc. v. AIG Specialty Insurance Co., highlights some common friction points in RWI claims and provides guidance for policyholders navigating future coverage disputes that mature into litigation.