Hunton Insurance Recovery Blog

Hunton insurance recovery group partner Larry Bracken and associate Rachel Hudgins were each recognized in Georgia Super Lawyers 2023’s most recent publication. Larry Bracken was recognized as a Super Lawyer, and Rachel Hudgins was selected as a Rising Star for Insurance Coverage.

A recent settlement filed by the Federal Trade Commission (FTC) and GoodRx may merit a review of your cyber insurance coverages. Earlier this month, the FTC took enforcement action for the first time under its Health Breach Notification Rule against the telehealth and prescription drug provider, GoodRx, for failing to notify consumers of its unauthorized disclosures of personal health information.

As detailed in a February 27 Hunton client alert, the Health Breach Notification Rule generally requires that vendors not covered by the Health Insurance Portability and Accountability Act (HIPAA) of personal health records give notice in the event of a “breach of security,” which is defined to include “unauthorized acquisition” of personal health records.

Earlier this month, the US District Court for the Northern District of Illinois ruled that Call One Inc., a tele-communications company, must litigate a claim by its insurer, Berkley Insurance Company, seeking to rescind coverage based on the information provided by the policyholder in its application for insurance. The coverage dispute is illustrative of insurers’ increased scrutiny of the answers to all policy application questions—including where no response is provided—to identify new or additional grounds to avoid coverage, even if it requires rescission of the policy. Policyholders should thus carefully consider all questions and requirements during the policy application process (including during renewal) to avoid potential disclosure disputes should a claim arise.

The surge in prices for eggs—the fourth most-purchased US grocery item—over the past months has surprised many American shoppers.  Last December, a dozen eggs cost $4.25 on average; 120% higher than at the same time in 2021.  The price hike stems from many factors, including supply chain issues and inflation.  But the primary culprit is the outbreak of the deadliest bird flu in US history, which has killed millions of chickens.  Grocery shoppers, however, are not the only ones feeling the economic impact of the ravage to poultry flocks.  Livestock owners and businesses are also feeling the economic pinch, particularly in areas hit hardest by the bird flu.  Insurance is a key component of risk management for livestock businesses and owners.  Here, we explore how insurance can mitigate the risks to livestock owners and businesses of accidental or unexpected events that result in the death of animals or economic losses.

On February 6, 2023, The Claims Journal highlighted a letter by members of Hunton’s insurance team, submitted on behalf of United Policyholders, to the California Supreme Court, which alerts the Court to the fundamental infirmities in the “standard” expounded by the insurance industry in COVID-19 business interruption litigations nationwide. The letter was issued to assist the Court in addressing a question certified from the US Court of Appeals for the Ninth Circuit, in Another Planet Entertainment, LLC v. Vigilant Insurance Co, asking whether the actual or potential presence of the COVID-19 virus on an insured’s premises “constitute direct physical loss or damage to property” for purposes of coverage under a commercial property insurance policy.

PFAS Regulation

Per- and polyfluoroalkyl Substances (“PFAS”) are a class of substances that have increasingly become the target of federal and state regulation in everything from drinking water, groundwater, site contamination, waste, air emissions, firefighting foam, personal care products, food and food packaging, and now consumer and commercial products. PFAS are widely-used chemicals that have the unique ability to repel both oil and water, which led to their application in many products including items such as stain and water-repellent fabric, chemical-and oil-resistant coatings, food packaging materials, plastics, firefighting foam, solar panels and many others. The carbon-fluorine bond is the strongest in nature, making these compounds highly persistent in the environment.

Last week, the Fifth Circuit affirmed that a title company’s crime protection policy applies to cover loss from a fraudulent wire transfer. The insurer, RLI Insurance Company (RLI), had argued that the $250,945.31 transfer was not covered under the funds transfer fraud endorsement because the instruction that led to the transfer was authorized and approved by the insured, Valero Title Inc. (Valero). Specifically, a Valero employee instructed Valero’s bank to wire the funds to a fraudulent account after a fraudster posing as a lender’s employee intercepted email communications regarding a payoff transaction and deceptively instructed the transfer.

The Delaware Chancery Court recently held that the duty of oversight extended to corporate officers. The important decision came after McDonald’s shareholders sued the company’s former head of human resources, alleging that the officer breached his duty of oversight by “allowing a corporate culture to develop that condoned sexual harassment and misconduct.” In that same decision, Vice Chancellor Laster also determined that acts of sexual harassment can constitute a breach of fiduciary duty. Officers are rightly focused on the potential ramifications on their personal liability following the ruling. But that potential increased exposure also raises several insurance implications for companies to consider while procuring and renewing directors and officers insurance coverage.

For many, the “metaverse” sounds like some obscure sci-fi fantasyland. You may be asking, where is it? How does one get there? Chances are, if you are reading this article on a screen then you are already interacting with what could be described as the metaverse. One thing is certain though, if the metaverse is to succeed, insurance will play a pivotal role. The metaverse is not without risk.

The Insurance Journal recently published an article by Hunton Insurance Recovery lawyers discussing risk management of exposures in the metaverse. In the article, Syed S. Ahmad, Kevin V. Small ...

In First Mercury Insurance Co. v. First Florida Building Corp., et al., a federal district court ordered that an insurer had a duty to defend its insured against an underlying personal injury lawsuit. 2023 WL 23116, at *1 (M.D. Fla. Jan. 3, 2023). First Mercury is a cautionary tale about how insurers may try to circumvent their obligations by improperly considering extrinsic evidence when determining whether they have a duty to defend their insureds.