Hunton Insurance Recovery Blog

California’s highest court held yesterday in Pitzer College v. Indian Harbor Insurance Co., that the state’s insurance notice-prejudice rule is a “fundamental public policy” for the purpose of choice of law analyses. This unanimous ruling, issued in response to certified questions from the Ninth Circuit, confirms and emphasizes California’s common law rule that policyholders who provide “late notice” may proceed with their insurance claim, absent a showing by the insurer of substantial prejudice. The California Supreme Court also extended the prejudice ...

The Seventh Circuit recently withdrew its controversial opinion that broadly interpreted an exclusion in Emmis Communications Corporation’s D&O policy, thereby barring coverage for losses in connection with claims of circumstances “as reported” under Emmis’ other insurance policy. The reversal, while very rare, was the correct result that alleviated concerns about the chilling effect the court’s broad reading of the exclusion may have on policyholders’ decisions to provide notice under all potentially applicable insurance policies.

On August 19, 2019, a Texas appellate court reversed a trial court’s summary judgment in favor of an excess carrier, and ruled as a matter of law that an arbitration award in favor of a former officer was covered under the EPL component of a management liability policy.  In doing so, the court rejected the carrier’s reliance on an Insured v. Insured exclusion.  The court also looked to the policy’s definition of “Interrelated Wrongful Acts,” a concept typically relied on by carriers to deny or limit coverage, to sweep a variety of allegations within the scope of the policy’s EPL insuring agreement and an exception to the Insured v. Insured exclusion.

In a recent Law360 expert analysis, titled “Considering Disclosure Risks In Sensitive Product Recalls,” Hunton Andrews Kurth insurance lawyers Syed S. Ahmad and Geoffrey B. Fehling discuss the disclosure risks companies face in pursuing insurance coverage for losses arising from product recalls that involve potentially sensitive communications with the Food and Drug Administration or other government agencies. The authors focus on a recent New York opinion, which denied a pharmaceutical company’s motion to seal status reports between the company and the FDA, and ...

On Friday, August 9^th, an Indiana Court of Appeals reversed a trial court’s ruling and allowed an insureds’ claim for bad faith based on misrepresentations in the insurer’s quote for coverage to proceed to trial.

In a recent article in the ABA Business Law Section publication Business Law Today, Hunton insurance recovery lawyers Syed Ahmad and Geoffrey Fehling discuss several important D&O insurance coverage issues to consider in M&A transactions. In the article, the authors discuss the intersection of M&A and insurance and how mergers, acquisitions, and other deals can impact the potential risks and protections afforded by D&O and other insurance policies . A copy of the article can be found here.

On August 6, 2019, Hunton Andrews Kurth insurance lawyers Walter J. Andrews and Daniel Hentschel discussed the effect of eroding insurance policies in an article appearing in Florida’s Daily Business Review. The full article is available here. In the article, the authors discuss the potential risks associated with the use of eroding insurance policies and the obligations that the use of such policies imposes upon insurance companies based on their control over the policyholder’s liability defense ...

In the August 2019 publication of Contract Management, Hunton insurance recovery lawyers Walter Andrews, Lorelie Masters, Michael Levine, and Latosha Ellis discuss how a robust insurance program can help government prime contractors mitigate potential financial risks associated with downstream data breaches or releases. In the article, the authors explain government prime contractors’ cybersecurity obligations under DFARS and other federal regulations. A copy of the article is here.

Increasing public concern over sexual misconduct, evidenced by the #MeToo movement and investigations into high-profile organizations such as USA Gymnastics, the Boy Scouts of America, various religious institutions, and the entertainment industry, has led to the enactment of laws that may have a major impact on the coverage litigation world. This year, eighteen states and the District of Columbia will enact laws modifying the statute of limitations for child sexual abuse cases, allowing victims to bring claims that otherwise would have been time-barred.

In an article appearing in Law360 on August 8, 2019, Hunton insurance partner, Syed Ahmad, provided insight into three recent significant D&O insurance decisions.

A Louisiana court recently denied an excess insurer’s bid for summary judgment, finding that the insurer’s interpretation of a pollution exclusion would lead to “absurd results.”

Benchmark Litigation has named Syed Ahmad, a partner in Hunton Andrews Kurth’s Insurance Coverage practice, to the publication’s 40 & Under Hot List. Benchmark Litigation is the definitive guide to America’s leading litigation firms and attorneys. The 40 & Under Hot List honors the most notable up-and-coming litigation attorneys in the United States. Those named to the list have proven their eligibility as individuals at the partner level of their respective firms who are 40 years of age or younger.

Read more on the firm’s announcement about Syed’s selection here.

The U.S. District Court of Appeals for the First Circuit recently held that Zurich American Insurance Company was obligated to defend Electricity Maine, LLC in a class action lawsuit brought by its customers.  The case stems from alleged misconduct by Electricity Maine that resulted in customers receiving higher bills than were previously represented.  Plaintiffs Jennifer Chon and Katherine Veilleux sought to represent a class of approximately 200,000 customers seeking damages totaling approximately $35 million.  Specifically, the complaint asserted claims for negligence, negligent misrepresentation, violations under the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18. U.S.C. §§ 1962, 1964, and the Maine Unfair Trade Practices Act.

A Delaware court held that an appraisal action, which includes $39 million in attorneys’ fees, prejudgment interest, and costs incurred in defending litigation that arose out of Solera Holdings Inc.’s acquisition by Vista Equity Partners LP, constitutes a covered “securities claim” under Solera’s directors and officers liability insurance policy.

A recent outbreak of Legionnaires’ Disease has been traced to a Sheraton hotel in Atlanta, Georgia.  According to the Georgia Department of Public Health, 11 cases are confirmed and 55 more cases are “probable.”  The Atlanta Sheraton closed on July 15 to investigate the outbreak.  The closure is certain to result in a substantial immediate loss of revenue for the property.  The closure and loss of advanced reservations also will likely result in an extended interruption of hotel revenue.  Add to that potential stigma-related losses that will result from those afraid to reenter the property after the hotel reopens.  Sheraton will likely turn to its insurers to seek payment for its business interruption costs.

Recent reports of another social engineering scam, this time at a North Carolina public school system, demonstrates why public entities and companies, alike, need to regularly review their cyber vulnerabilities and potential exposures and ensure that their cyber insurance is properly tailored for their specific risks.