Hunton Insurance Recovery Blog

In the case of County of San Bernardino v. Insurance Company of the State of Pennsylvania, the Ninth Circuit recently addressed the issue of whether general liability policies issued in the 1960s and 1970s included aggregate limits for claims arising under the premises-operations coverage in CGL policies. The difference between the policyholder’s interpretation of the policies’ limits clauses and the insurer’s interpretation was worth hundreds of millions of dollars in exposure for the insurer. The Court closely examined the policy language and extrinsic evidence from both the insurance industry’s drafting history and the parties before concluding that the policies were ambiguous. The Court construed that ambiguity in favor of the policyholder and ruled that aggregate limits did not apply to the claims at issue. The Court’s decision underscores the importance of carefully examining a policy’s limits, especially for older policies written before 1986 when the insurance industry revised the standard-form CGL policy to state the aggregate limits apply not only to products liability claims but to premises-operations claims as well. Decades of insurance industry drafting history confirms, as the policyholder’s submissions in this case indicate, that the industry well understood that operations claims like the environmental waste-disposal claims at issue here typically were not subject to aggregate limits. 

In a recent client alert, Hunton insurance lawyers Lorelie S. Masters, Geoffrey B. Fehling, and Charlotte E. Leszinske discuss emerging ESG-related risks and insurers’ interests in those risks when underwriting insurance policies.  Increased focus on ESG by regulators and the public have brought ESG programs and ESG-related liabilities, such as “greenwashing,” to the forefront.  Insurers are also paying attention to these risks and have signaled that their clients’ efforts to address ESG may factor into underwriting of their insurance policies.  Many emerging ESG risks may be covered under existing corporate insurance programs, including directors and officers insurance.  Before incurring a claim, companies should proactively evaluate their insurance program and assess ESG-related risks, expecting that they may need to explain such assessments to their insurers.  Read the full alert here.  

Hunton Andrews Kurth’s 300-lawyer cross-disciplinary Retail Industry Team has released its annual 2023 Retail Industry Year in Review. The Review discusses retail industry issues that implicate multiple legal practice areas and highlights new and emerging risks retailers may encounter in the year ahead.

Significant issues from 2023, with insurance implications that will continue to evolve in 2024 and beyond, include copyright infringement claims for retailers engaged in social media and polyfluoroalkyl substances (PFAS) related liability claims and related putative class action lawsuits.

We discuss these risks in the 2023 Retail Industry Year in Review and on our insurance recovery blog, along with other risks that will continue to affect the retail industry in 2024.

On September 26, 2023, KPMG published independent research showing that three-quarters of global businesses feel they are not ready for new ESG reporting regulations. KPMG’s findings are the latest reminder to businesses—and their directors and officers and other insureds—about the important role that Directors & Officers (D&O) insurance can play as businesses and organizations strive for ESG compliance and work to mitigate ESG-related risks.

Extreme weather events—such as heat waves, wildfires, hurricanes, and tornadoes—may create major protection gaps for insureds. In California, rising temperatures and massive heat waves have led the California Department of Insurance (the “Department”) to rethink risk solutions and insurance programs that protect the state’s communities from the risks associated with extreme heat. While the Department’s proposed solution applies only to coverage for local governments, Tribes, and public health agencies, it is a “hot” topic among many Californians, as insurance professionals and policyholders debate the Department’s proposed approval of parametric insurance.

The Court of Appeals of Georgia recently found an excess insurer liable for environmental costs related to a leak in an insured’s pipeline.  In doing so, the court rejected the insurer’s argument that liability for the costs should be spread among policies issued by other insurers spanning nearly three decades.  The opinion is available here.