Hunton Insurance Recovery Blog

In a recent client alert, Hunton insurance attorneys Geoffrey B. Fehling and Alundai J. Benjamin discuss the Fourth Circuit’s broad interpretation of a “related claims” provision in a healthcare liability policy. The dispute arose from two lawsuits against a laboratory testing company alleging systemic deficiencies in testing practices that produced false positives, where the later-filed lawsuit repeated and expanded on allegations from an earlier suit. Interpreting policy language and Fourth Circuit law requiring only a logical or causal connection based on “any common fact,” the appellate court overturned the district court opinion and held that the lawsuits were related and deemed a single claim first made during the earlier policy period.

Directors and officers liability insurance is first and foremost protection against personal exposure of boards and management who are targeted in claims challenging their decisions in running the company. That’s why it is surprising how often dedicated “Side A” coverage—insurance coverage, subject to no self-insured retention, available exclusively for the benefit of directors and officers who are not indemnified by the company—is overlooked in placing and renewing D&O insurance programs. One recent Texas bankruptcy ruling, In re First Brands Group, LLC, No. 25-90399 (CML) (Bankr. S.D. Tex. Jan. 7, 2026), demonstrates just how powerful Side A protection can be. There, against strong objections from the creditors’ committee, the bankruptcy court granted motions by numerous former executives seeking relief from the automatic stay to recover D&O insurance proceeds, unlocking millions in Side A coverage to defend against private and governmental claims asserted in connection with the bankruptcy.

A self-insured retention is a dollar amount specified in the insurance policy that an insured must pay toward a claim before insurance coverage begins to apply to pay for remaining covered amounts. While ordinarily straightforward, insurers may sometimes argue otherwise. In a recent summary judgment ruling in The Archdiocese of New York, et al. v. Century Indem. Company, et al., No. 652825/2023 (N.Y. Sup. Ct. Sept. 8, 2025), based on the plain language of the insurance policies, a New York state trial court rejected an insurer attempt to treat a self-insured retention as reducing the amount covered under the policies. 

Businesses decide to switch liability insurers or obtain higher policy limits for various reasons. In doing so, policyholders should exercise caution to avoid future claim denials (or even policy recission) based on so-called “prior knowledge” issues. Prior knowledge comes into play when the policyholder knew about facts, incidents, or circumstances that occurred before the policy incepted, which can lead to problems if the insurer asserts that the policyholder had “prior knowledge” of an incident before seeking new coverage, limits, or policies.