Hunton Insurance Recovery Blog

Wildfires continue to present serious risks for California property owners. Unfortunately, commercial property owners, corporate facilities, landlords, and homeowners need to overcome not only the flames themselves, but also remediating hazardous contamination against a backdrop of unpredictable and ambiguous environmental safety standards. In response to the destructive Los Angeles area fires in 2025, the California Legislature recently introduced Assembly Bill 1642 aimed at creating uniform science-based standards for evaluating, testing, and clearing wildfire-impacted properties.

A Feb. 17 federal court ruling has found that neither the attorney-client privilege nor work product protection apply to a criminal defendant’s self-directed prompts and large language model outputs.  In the ruling in USA v. Heppner, US District Judge Jed S. Rakoff ordered the production of 31 documents generated by the defendant using Anthropic’s Claude, notwithstanding that the defendant had incorporated information obtained from counsel and later shared the AI outputs with his attorneys. In a recent legal update, Hunton partner Meghan Podolny and associate Jessie Purtell discuss how the ruling provides early judicial guidance on privilege issues related to AI-generated materials, an area with limited existing case law.

Although the ruling occurred in a criminal proceeding, the reasoning should apply equally across all litigation.  The ruling could therefore have serious implications for policyholders in coverage litigation and mandates a cautionary approach to client-guided “research” using open ai models.

In a recent opinion addressing cross‑motions for summary judgment, a Pennsylvania state court set forth a clear holding that policyholders may recover post-judgment interest under excess liability insurance policies only when the policy language expressly says so—and only when the stated conditions are met. The decision underscores the importance for policyholders to thoroughly examine the defense and payment provisions outlined in their insurance policies.

In Illinois National Insurance Company v. Harman International Industries Incorporated, No. N22C-05-098 (Del. 2026), the Delaware Supreme Court affirmed D&O coverage for a $28 million settlement of a securities class action, finding the policies’ “bump-up” exclusion inapplicable to the settlement.

In a recent legal update, Hunton attorneys Steven Haas, Johnathon E. Schronce, Geoffrey B. Fehling, and Madalyn Moore discuss important takeaways from the Harman decision for policyholders who find themselves embroiled in M&A litigation. The decision underscores the continued relevance of bump-up exclusions, how those exclusions can lead to coverage disputes involving M&A litigation, and the importance of policyholders’ awareness of potential bump-up coverage issues when placing or renewing D&O coverage, pursuing transactions, and defending and settling deal-related claims.

If recent years have taught insurance practitioners anything, it is that the most consequential coverage disputes rarely turn on novelty alone. In 2025, courts continued to resolve high‑stakes insurance disputes by returning to first principles—examining when claims are related, how losses and occurrences are defined and aggregated, and how policy language allocates risk across time and conduct. D&O coverage and other core insurance law issues again occupied center stage, while decisions in property, cyber, and liability disputes reinforced a familiar theme: policy interpretation remains the decisive factor in determining whether coverage is available in an increasingly complex claims environment. As the decisions discussed below demonstrate, 2025 confirmed that even as risks evolve, coverage disputes remain grounded in careful, policy‑specific analysis.

A recent Ninth Circuit decision—Las Vegas Sands, LLC v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 2025 WL 3754348 (9th Cir. Dec. 29, 2025) —reversed a Nevada district court’s ruling in favor of a D&O insurer that had refused to cover a lawsuit asserting both contract and tort claims under the policy’s contractual liability exclusion. The ruling is a timely reminder for policyholders about why they should carefully scrutinize coverage denials, especially overbroad readings of contract exclusions, and consider pursuing insurers who wrongfully deny coverage.