Hunton Insurance Recovery Blog

While the holiday season brings joy to many, it can be a stressful time for businesses. Cyberattacks often spike during weekends and holidays when businesses are less vigilant and slower to detect unusual activity. This reduced oversight creates an opportunity for attackers to exploit weaknesses and cause significant disruption. A recent article in Tech Times noted that ransomware groups launch over 50% of their attacks during weekends and take advantage of December’s increased operational shortages.

In a recent opinion, the 8th Circuit rejected an insurer’s attempt to expand insurer victories in a COVID-19 context to other more traditional claims of property damage. Reaffirming long standing principles, the court held soot and water damage associated with a fire constituted “direct physical loss or damage” under a commercial property insurance policy.

North Carolina has once again favored policyholders seeking insurance coverage for COVID-19 business interruption losses. A recent decision from the Middle District of North Carolina in Durham Wood Fired Pizza Co. LLC v. Cincinnati Ins. Co., reinforces the North State Deli decision and suggests that a failure to provide coverage for COVID-19 business interruption claims may constitute bad faith.

From insurance agents and wholesalers to risk consultants and policyholders, there are many parties involved in commercial insurance transactions. While each has an important part to play, the policyholder-agent relationship is particularly important to ensure both sides understand their respective roles and obligations when an agent assists in obtaining coverage.

The Northern District of California recently rejected an insurer’s attempt at avoiding its duty to defend the insured based on erroneous application of a prior knowledge exclusion. The case highlights the breadth of an insurer’s duty to defend and reiterates that to avoid this duty, “it is the insurer’s burden to demonstrate there is no possible theory that would bring a single issue within coverage.”