Hunton Insurance Recovery Blog

Insurers generally have a right to conduct a full, fair, and thorough investigation of a claim. Depending on policy language, one investigative tool available to insurers is the examination under oath, or an “EUO.” In an EUO, a representative of the policyholder is sworn-in, and an employee of or attorney for the insurer asks questions related to the claim. EUOs may be a condition precedent to coverage, meaning failure to appear and comply with a reasonable EUO request may void coverage for the claim. See, e.g., Quality Health Supply Corp. v. Nationwide Ins., No. 2021-06955, 2023 WL 3486573 (N.Y. App. Div. May 17, 2023); Raymond v. State Farm Fire & Cas. Co., 614 F. Supp. 3d 1303 (N.D. Ga. 2022).

A New York federal judge recently ruled that an insurer waived its late notice defense because a generic reservation of rights was insufficient to preserve it. As a result, the policyholder’s claim was preserved despite being submitted more than three months after the loss—a delay which would ordinarily be fatal under New York law. The decision underscores the importance both of timely submission of claims and careful attention to reservation of rights letters.

The False Claims Act continues to make headlines. The DOJ announced earlier this year that its fiscal-year recoveries—across 351 settlements and judgments—exceeded $2.2 billion, which was the second-highest number of settlements recorded in a single year. More recently, the US Supreme Court heard oral argument and is poised to issue a decision in a closely-watched FCA case that could radically change the balance of power between the government and industry.

The Superior Court of New Jersey Appellate Division recently upheld a lower court’s finding that the war exclusion in a property insurance policy did not preclude coverage for Merck’s claim stemming from a 2017 cyberattack. The decision is appropriately being heralded as a huge win for policyholders and an affirmance of New Jersey’s longstanding history of protecting policyholders’ reasonable expectations. We previously blogged about developments relating to the war exclusion and the Merck case when it was initially heard by the Appellate Division.

Artificial intelligence technology (“AI”) is poised to radically improve human functionality, although some say the technology is quietly learning how to overtake it. In the meantime, the insurance industry has been using AI to save time, attain consistency and improve risk mitigation. However, while the industry looks forward to cost savings and better business utilizing generative AI, some insurers have simultaneously cautioned policyholders about the potential risks that reliance on AI may pose. Insurer’s cautionary statements cast doubt on the integrity of their own reliance on the technology.

Six members of Hunton Andrews Kurth LLP’s insurance coverage team (Walter Andrews, Lorie Masters, Koorosh "KT" Talieh, Larry Bracken, Mike Levine and Scott DeVries) attended the American College of Coverage Counsel’s annual meeting in Chicago, where Lorie Masters received the College’s prestigious Thomas F. Segalla Service Award. The College annually bestows the award in recognition of dedication and service to the College. Named in honor of the College's first president, the award recognizes recipients that demonstrate Creativity, Visibility, and Persistence, three characteristics that embody the approach of Tom Segalla to his practice, volunteerism, and leadership in the practice of law.  In addition to receiving the award, Lorie, as well as Larry and Mike, presented during the conference.

Congratulations to Jae Lynn Huckaba, an associate in Hunton Andrews Kurth LLP’s Miami office and a member of the Firm’s insurance coverage team, for being named to the Miami Dade Bar Young Lawyers Section (YLS) board of directors.

The Miami Dade Bar YLS is comprised of attorneys aged 36 and under, competitively selected from among a large group of nominees.  As a member of the YLS board of directors, Jae Lynn will help organize member and networking events, as well as judicial receptions and CLE programs. 

Congrats, Jae Lynn!

In 2008, Illinois enacted the Biometric Information Privacy Act (BIPA) to protect individuals’ privacy rights in their biometric information, including retina or iris scans, fingerprint, voiceprint, hand scans, facial geometry, DNA and other unique, identifying biological information. Companies are now paying hundreds of millions of dollars to settle employee and consumer suits for BIPA violations. In a recent Reuters Legal News article, Hunton Andrews Kurth LLP attorneys Syed Ahmad, Rachel Hudgins and Torsten Kracht, discuss what BIPA is, how it applies to companies ...

The explosive growth of representations and warranties (R&W) insurance over the last decade is no secret.  But, for many, R&W insurance remains an enigma, particularly as respects filing a claim under such policies.  Indeed, even those involved in buying R&W insurance may not have experience on the claims end and, as a result, possess little knowledge on how to navigate the assortment of issues that may arise.  Of course, policyholders pursuing a claim under an R&W policy should be aware of the minefield of issues that await in establishing the two primary thresholds to recovery: breach ...

On April 11, 2023, Maryland Governor Wes Moore signed into law the Child Victims Act of 2023, allowing Maryland to join the growing number of states to rejuvenate previously time-barred lawsuits by victims of child sexual abuse against public school boards, government entities and private institutions. The Act also increases the statutory cap on civil damages for child sexual abuse—damages against public school boards and government entities are capped at $890,000 per incident, while per-incident damages against private institutions, including independent schools, are capped at $1.5 million. Maryland follows other states, like California and New York, which paved a path for abuse victims to bring previously time-barred claims based on alleged abuse that occurred decades earlier. Maryland is the first state, however, to pass this type of statute with a lookback period of infinite duration—meaning there is no limit for how long ago the alleged abuse occurred, and the statutes of limitation for lawsuits based on future acts of abuse are eliminated. Other states, such as New York and New Jersey, created limited lookback periods (one or two years), during which survivors were able to file previously time-barred claims.  

An insurer for University of Southern California recently filed suit in California federal court against the university and a former gynecologist at USC’s Student Health Center seeking to rescind USC’s insurance policy.  The dispute concerns North American Capacity Insurance Company’s coverage obligations for hundreds of sexual abuse-based lawsuits brought against USC.  NACIC seeks, among other things, to rescind a policy it sold to USC based on alleged failures by USC to disclose material facts during the policy application process.  NACIC is also seeking to avoid its coverage obligations under the policy’s “Prior Known Acts” exclusion.

In ExxonMobil Corp. v. Natl. Union Fire Ins. Co. of Pittsburgh, PA, the Texas Supreme Court held that an insurance policy did not incorporate the payout limits of an underlying service agreement and thus the insured was entitled to the higher limits under the insurance policy. 2023 WL 2939596, at *1 (Tex. Apr. 14, 2023).