Hunton Insurance Recovery Blog

In Hemisphere Media Group, Inc. v. Fair American Select Insurance Co., the Delaware Superior Court held that when a D&O policy contains an allocation provision requiring the parties to use “best efforts” to reach a fair allocation but does not expressly mandate a specific allocation methodology in the event of disagreement, Delaware’s policyholder-friendly “larger settlement rule” applies by default. The court rejected the insurer’s argument that references to relative legal exposures and benefits constituted a binding allocation framework, finding instead that the common relative-exposure language governs negotiations only and does not displace applicable law when negotiations fail.

Corporate transactions are on the rise. A recent report by Aon reveals that between 2024 and 2025, the average deal value for its North American clients increased by 73 percent. Deals exceeding $1 billion in value increased 26 percent. This growth points to a healthy transactional market and increased deal activity, creating meaningful opportunities for businesses and investors to pursue strategic acquisitions. 

In 3371 Reading, LLC v. Liberty Mutual Group, the Sixth Circuit did something courts do not always do in coverage disputes: it refused to let an insurer avoid liability based on a technical policy condition that could never actually be satisfied.

The decision is a straightforward reminder of two core principles. First, policies must be interpreted from the standpoint of a reasonably prudent insured. Second, hyper-technical conditions cannot be used to deny coverage where compliance is never possible.

Whether a loss counts as one “occurrence” or many can determine whether meaningful coverage is available. In J.M. Smucker Company v. Ace American Insurance Company, the Sixth Circuit held that thousands of claims tied to alleged salmonella contamination in peanut butter arose from a single occurrence—not hundreds of separate occurrences grouped by production lot. For manufacturers and other policyholders facing recall or mass-claim exposure, the decision is a useful reminder that courts applying a cause-based analysis should look to the common source of the alleged harm, not the number of claimants.

A Delaware trial court recently addressed a relatively uncommon insurance coverage dispute—litigated claims under a buyer-side representations and warranties policy—arising from a global surface technology firm’s assertion that the chemical company it acquired breached three representations in the deal documents. The Delaware Superior Court decision, in Surteco North America, Inc. v. AIG Specialty Insurance Co., highlights some common friction points in RWI claims and provides guidance for policyholders navigating future coverage disputes that mature into litigation.

Happy 4^th and 250 years of freedom . . . to contract!

Many policyholders assume insurance policies are “standard” and must be accepted as-is. That assumption is often wrong—and dangerously limiting. Unlike many consumer insurance markets, the commercial insurance realm preserves a robust “freedom to contract,” allowing sophisticated policyholders to negotiate terms, exclusions, definitions, and limits before a policy is even issued. Particularly in recent years, high-profile disputes over cyber coverage, business interruption, and war/cyber exclusions have shown not just what happens when coverage is denied, but what could have been done up front to avoid those fights.

This post highlights the power policyholders still hold in the negotiation process and illustrates, with concrete examples from recent media-covered disputes, how that freedom can be strategically used.

A New York federal court has broken new ground and laid a foundation for insureds to pursue damages flowing from bad faith claim handling practices. In a significant decision for policyholders, the Southern District of New York has clarified that bad faith claims (and the consequential damages that accompany them) are not limited to first-party insurance disputes. In Renergy, Inc. v. Mt. Hawley Ins. Co., No. 25-CV-5073, 2026 WL 1192415 (S.D.N.Y. May 1, 2026), the court rejected an insurer’s argument that New York law categorically bars bad faith claims stemming from third-party insurance.

Hunton’s insurance coverage practice was once again recognized among the nation’s top policyholder insurance practices, receiving a Band 2 national ranking in the 2026 United States Edition of The Legal 500 for Insurance: Advice to Policyholders. The Legal 500 recognizes firms solely based on merit through numerous factors including client feedback and peer input.