Hunton Insurance Recovery Blog

Hunton Andrews Kurth LLP’s insurance coverage practice was once again recognized among the top policyholder insurance practices nationally, receiving a Band 2 national ranking in the 2024 United States Edition of The Legal 500 for Insurance: Advice to Policyholders. The Legal 500 ranks the nation’s top law firms, practices, and lawyers, highlighting those that consistently provide “the most cutting edge and innovative advice to corporate counsel … based on feedback from 300,000 clients worldwide, submissions from law firms and interviews with leading private practice lawyers, and a team of researchers who have unrivalled experience in the legal market.”

Congratulations to Jae Lynn Huckaba on winning the Miami-Dade Bar Association Young Lawyer Section’s inaugural Rookie of the Year Award. This year, the MDB YLS Officers created the Rookie of the Year Award to recognize one new MDB Board of Director who consistently moves the YLS forward. President of the YLS, Beau Blumberg, stated, “Jae Lynn jumped right into the YLS, helping wherever it was needed, from the Breakfast with the Judiciary event to Miami Nights to multiple service projects and social events. After one year, we know Jae Lynn is destined for great things in the YLS.”

In November 2023 and January 2024, Hunton Andrews Kurth LLP released the first two issues of its AI and Emerging Technologies Newsletter. Both publications featured contributions from insurance coverage partner Michael Levine and associate Alex Pappas, which analyze significant issues at the intersection of insurance and AI.  

Washington, DC-based partner Michael Levine has been recognized for his extensive experience and insights into emerging and legacy property and business interruption insurance coverage issues by being selected to Law360’s 2024 Editorial Advisory Board for Insurance Authority Property. As a member of the board, Mike will provide feedback on Law360’s coverage of property issues and expert insight on how best to shape future reporting of issues affecting businesses across all industry sectors.

New York’s Commercial Division is a sophisticated forum for resolving complex commercial disputes.  The Commercial Division has many advantages over other forums: judges are hand-selected for their experience with commercial cases, discovery procedures are streamlined to save time and money, and dispute resolution is encouraged early and often.  However, the several sets of overlapping rules governing practice in the Commercial Division can intimidate outsiders and trip up the uninformed. 

We are pleased to announce that counsel Rachel E. Hudgins has been recognized as one of Business Insurance’s 2024 Break Out Award winners. The magazine’s Break Out Awards honor 40 top professionals each year from a competitive field of nominees who have under 15 years’ experience in the insurance and risk management sector and are “on track to be the next leaders in the risk management and property/casualty insurance field.”

On February 7, the Emory Public Interest Committee (EPIC) honored insurance coverage partner Lawrence (Larry) J. Bracken II with their 2024 Lifetime Commitment to Public Service Award at the annual EPIC Inspiration Awards. As one of the Emory University School of Law’s signature events, the Inspiration Awards celebrate members of the community who do extraordinary work in the public interest and provide funding for public interest summer jobs.

We are pleased to announce that Hunton Andrews Kurth LLP insurance coverage partner Andrea DeField was named to the South Florida Business Journal’s 2024 list of Influential Business Women. The award celebrates 25 women who have a strong record of leadership, performance and innovation in their industry, as well as meaningful community involvement. This distinction is well-deserved given Andi’s leadership in the cyber insurance space, contribution to the firm’s pro bono efforts, and longstanding record of community involvement in South Florida.

Andi and the other ...

Hunton Andrews Kurth LLP is pleased to announce the release of the inaugural edition of our AI and Emerging Technologies Newsletter. The newsletter focuses on multidisciplinary, current topics affecting businesses in the AI and emerging technology industry. Inside our first edition, we cover a bit of what you need to know about AI in the context of contract terms and conditions, US privacy laws, insurance, employer use monitoring and workforce management, and copyright law, as well as the rise in crypto class actions. Our first edition also includes an article written by insurance ...

Boston-based insurance coverage partner Geoffrey Fehling has been appointed to the Greater Boston Chamber of Commerce’s Financial Services Leadership Council.

The Chamber’s Leadership Councils—focusing on topics like climate and energy, health care and life sciences, and higher education—draw together select groups of business leaders with an interest in specific policy areas to connect with one another, share ideas and perspectives, and help inform and develop the Chamber’s policy positions. The Financial Services Leadership Councill works to identify ...

Hunton Partner, Lorelie S. Masters, was recently named to Benchmark Litigation’s 2023 Top 250 Women in Litigation. The publication honors the accomplishments and distinguished careers of female litigators nationwide and recognizes them as top players in their respective fields. Benchmark Litigation highlighted, “Lorelie Masters has won significant decisions, trials, and arbitrations enforcing insurance for clients, including confidential international arbitrations and litigations for clients like New Century Liquidating Trust, Hoechst Celanese/Ticona, and ...

Hunton Andrews Kurth LLP’s insurance practice was recognized among the top policyholder insurance practices nationally, receiving a Band 2 national ranking in the 2023 United States Edition of The Legal 500 for Advice to Policyholders. The Legal 500 ranks the nation’s top law firms, practices, and lawyers, highlighting those that consistently provide “the most cutting edge and innovative advice to corporate counsel … based on feedback from 300,000 clients worldwide, submissions from law firms and interviews with leading private practice lawyers, and a team of researchers who have unrivalled experience in the legal market.”

Partner Geoffrey Fehling, who leads the firm’s Boston insurance coverage practice, has been appointed to co-chair the Director and Officer Liability Committee of the American Bar Association’s Business Law Section. The Committee is part of the ABA Business Law Section’s global network of over 30,000 business law professionals interested in expanding their knowledge, engaging with their professional communities, and advancing their experience through Section committees, programs, and meetings.

Six members of Hunton Andrews Kurth LLP’s insurance coverage team (Walter Andrews, Lorie Masters, Koorosh "KT" Talieh, Larry Bracken, Mike Levine and Scott DeVries) attended the American College of Coverage Counsel’s annual meeting in Chicago, where Lorie Masters received the College’s prestigious Thomas F. Segalla Service Award. The College annually bestows the award in recognition of dedication and service to the College. Named in honor of the College's first president, the award recognizes recipients that demonstrate Creativity, Visibility, and Persistence, three characteristics that embody the approach of Tom Segalla to his practice, volunteerism, and leadership in the practice of law.  In addition to receiving the award, Lorie, as well as Larry and Mike, presented during the conference.

Congratulations to Jae Lynn Huckaba, an associate in Hunton Andrews Kurth LLP’s Miami office and a member of the Firm’s insurance coverage team, for being named to the Miami Dade Bar Young Lawyers Section (YLS) board of directors.

The Miami Dade Bar YLS is comprised of attorneys aged 36 and under, competitively selected from among a large group of nominees.  As a member of the YLS board of directors, Jae Lynn will help organize member and networking events, as well as judicial receptions and CLE programs. 

Congrats, Jae Lynn!

Congratulations to Alice Weeks, an associate on Hunton Andrews Kurth’s insurance coverage team, for being selected to the Miami Dade Bar’s Circle of Excellence for Insurance Litigation.   

The Circle of Excellence award is awarded to peer-selected attorneys in their area of practice. Alice was selected from among many highly qualified nominees and was recognized at the Miami Dade Bar’s Judicial Reception. Alice is a past board member of the Miami Dade Bar YLS, as well as past-editor of the Miami Dade Bar’s newsletter, the Bulletin. Alice’s Circle of Excellence selection ...

The RISKWORLD 2023 Annual Conference in Atlanta is just around the corner! Visit members of the Hunton Andrews Kurth LLP Insurance Coverage team at Booth 2040 to learn more about how our insurance recovery team helps clients obtain insurance recoveries and advise on the negotiation and procurement of policies and the presentation of claims.

In addition, partners Andrea DeField and Michael Levine, special counsel Lara Cassidy and counsel Kevin Small will be presenting on current and emerging insurance topics during the conference. Please see below for information about each session.

We hope to see you in Atlanta!

Congratulations to Adriana Perez on her selection to the National Association of Women Lawyers’ (NAWL) 2023 Rising List. Adriana is a member of Hunton Andrews Kurth’s national Insurance Recovery practice and is based in the Firm’s Miami, Florida office.

Effective February 28, 2023, Hunton Andrews Kurth LLP has promoted insurance recovery lawyer Kevin V. Small, along with three other attorneys, to Counsel.  “Kevin quickly established himself as an integral part of our practice, particularly in the area of transactional liability insurance,” said practice head Syed Ahmad.  Ahmad added, “Kevin recently led the drafting of a Lexis Practice Note on Representations and Warranties Insurance that will be published in the coming weeks and provides rare insights on common issues arising in the claims context.” “Kevin makes ...

Congratulations to Alice Weeks, an associate on the Hunton Andrews Kurth insurance coverage team, for recently being named as an inaugural honoree for the Miami Dade Bar’s Young Lawyers Section 40 Under 40 awards. 

The Miami Dade Bar Young Lawyers Section (YLS) is comprised of attorneys aged 36 and under. Alice was selected out of a large group of nominees and will be recognized, along with other young leaders in the legal profession from the Miami Dade area, at the YLS’s premier event, Miami Nights. Alice is a past board member of the Miami Dade Bar YLS, as well as past-editor of the ...

On November 3, 2022, US News announced its annual law firm rankings, where Hunton Andrews Kurth LLP garnered the highest (Tier 1) ranking among national insurance law practices. Hunton’s insurance team also received Tier 1 honors for “Insurance Law” in three regions (Washington, DC, Atlanta and San Francisco) and Tier 2 honors for “Litigation – Insurance" in Washington, DC. US News ranks law firms in tiers from 1 (highest) to 3 (lowest) based on quantitative data that speaks to general demographic and background information on the practice group, attorneys and other ...

Partner, Andrea DeField, and counsel, Latosha Ellis, were each recently awarded “On the Rise – Top 40 Young Lawyers” honors by the American Bar Association’s Young Lawyers Division. The award honors 40 of the nation’s most promising lawyers under the age of 40 or who have been licensed for 10 years or less. Recipients demonstrate high achievement, innovation, vision, leadership, and service to the profession and their communities, including extensive knowledge in litigation or transactional work and commitment to pro bono, charitable, or professional ...

Hunton Andrews Kurth LLP’s insurance practice has received U.S. News & World Report’s highest national ranking (Tier 1) in its ranking of Best Law Firms for Insurance Law.  Law firms are ranked in tiers from 1 (highest) to 3 (lowest) based on quantitative data that speaks to general demographic and background information on the practice group, attorneys, and other data that speaks to the strengths of a law firm’s practice as well as qualitative client feedback about:

• the practice group’s expertise,
• responsiveness,
• understanding of a business and its needs,

Boston-based partner Geoffrey Fehling has been recognized for his extensive experience and insights into emerging issues affecting directors and officers liability and other specialty lines insurance coverage by being selected to Law360’s 2022 Editorial Advisory Board for Insurance Authority Specialty Lines. As a member of the board, he will provide counsel to the legal newswire on insurance coverage issues facing companies and their officers and directors to help shape Law360’s future coverage.

To read more about Law360’s Insurance Authority Specialty Lines ...

Effective April 1, 2022, Hunton Andrews Kurth LLP has promoted insurance recovery lawyer Geoff Fehling, and 13 other attorneys, to partner. “Geoff hit the ground running from day one and quickly established himself as a valuable member of our practice and firm,” said outgoing insurance recovery practice head Walter Andrews. Andrews added, “Geoff’s promotion is well-deserved and a direct result of his hard work, client victories, and dedication to the firm.” “Geoff has become a go-to authority for clients and colleagues alike, especially in the area of directors and ...

A New Mexico court recently granted judgment on the pleadings against an insurer and found coverage, reminding the insurer that different words in a policy, indeed, have different meanings.

In Power of Grace, LLC v. Weatherby, Power of Grace, a policyholder, sued its insurer, Hudson Insurance Companies, and its insurance agent, Weatherby-Eisenrich Inc.  Power of Grace alleged that Weatherby and Hudson were liable for damages it might incur in an underlying wrongful death lawsuit arising from a tractor-trailer accident.

After any merger or acquisition, disputes can arise regarding the accuracy of representations and warranties made by the seller to the buyer. In most transactions today, the buyer obtains representation and warranty insurance to cover the buyer for losses resulting from the seller’s breach of a representation or warranty. When an R&W policy provides coverage, a seller may attempt to offset its obligations to the buyer by amounts paid by the R&W insurer. Likewise, the R&W insurer may attempt offset against the damages paid by the seller to the buyer. But other legal and equitable ...

We are pleased to announce that Hunton Andrews Kurth LLP insurance coverage partner Lorelie S. Masters is one of only eight attorneys throughout the nation shortlisted for the Best in Insurance & Reinsurance category for the Women in Business Law Awards 2021. The award honors “the outstanding achievements of women in over thirty different practice areas in business law from across Americas. These are individuals who stand out as leaders amongst their peers and who have been instrumental to innovative approaches in their field.”

We are proud to share that Hunton Andrews Kurth insurance coverage Partner Andrea (Andi) DeField and Counsel Cary D. Steklof were recently recognized as 2021 Legal Elite Up & Comers in Florida Trend magazine. Florida Trend invited all in-state members of the Florida Bar to name attorneys whom they highly regard or would recommend to others. Only the top 111 attorneys were recognized for their leadership in the legal field and in the community. Andi and Cary are both well deserving of this honor and the award reflects their dedication to providing excellent legal services.

The 2021 Chambers and Partners rankings for Georgia insurance recovery practices and lawyers are out and Hunton Andrews Kurth has received top honors.  The rankings include Hunton Andrews Kurth’s Insurance Recovery practice and partners Lawrence J. Bracken II and Michael S. Levine, with all receiving Band 1 honors – the organization’s top-tier ranking.  “The top-level ranking of our practice in Georgia, and the work that Larry and Mike bring to our clients in Georgia, specifically, is emblematic of the work our team is doing nationwide,” said Insurance Recovery Practice Head, Walter J. Andrews.  “The Firm and I could not be more proud,” he added.

We are proud to share that Business Insurance has named Hunton Andrews Kurth insurance coverage associate, Latosha M. Ellis, one of the magazine’s 2021 Break Out Award winners. Business Insurance’s Break Out Awards honor 40 top professionals from around the country each year who are expected to be the next leaders in risk management and the property/casualty insurance field. Business Insurance reviewed hundreds of nominees, all of whom have worked in commercial insurance or related sectors for under 15 years. Out of those hundreds, Latosha was selected as one of the 40 honorees for 2021.

Hunton insurance coverage attorney Geoffrey Fehling recently presented on new developments in the area of D&O liability insurance at the Director and Officer Liability Committee’s spring meeting, which concluded a week of programming, networking, and other events at the 2021 ABA Business Law Virtual Spring Meeting. The mission of the Committee on Director and Officer Liability is to monitor developments concerning the liability of directors and officers of for-profit corporations, including court decisions, government actions, D&O insurance, and indemnification and ...

Effective April 1, 2021, Hunton Andrews Kurth LLP has promoted insurance recovery lawyer, Andi DeField, and six other attorneys, to partner.  “Andi has been a superstar in our practice since the day she arrived,” said insurance recovery practice head, Walter Andrews, adding that “Andi’s promotion reflects the incredible hard work she has contributed to the practice and outstanding results she has achieved for our clients over the years.”  A native of Miami, Andi ascended through the ranks at Hunton in its Miami office, joining the firm as a contract lawyer before earning ...

One year into the COVID-19 pandemic, courts have issued hundreds of rulings in COVID-19 business interruption lawsuits, many favoring insurers. Yet those pro-insurer rulings are not based on evidence, much less expert opinion evidence. For insurers, ignorance is bliss.

New Jersey’s highest court heard arguments Monday in the appeal of a ruling that the New Jersey Transit Corp.’s (“NJ Transit”) insurers are required to insure $400 million of water damage loss caused by Hurricane Sandy.

The matter stems from an insurance claim NJ Transit made after the super storm rocked the East Coast in 2012. NJ Transit claimed over $400 million in losses as a result of damage to its tracks, bridges, tunnels and power stations. In response, its tower of property insurers took the position that a $100 million flood sublimit applied to limit NJ Transit’s recovery under its insurance tower, not the policy’s $400 million overall limits.

The Fifth Circuit recently rebuffed an attempt by Chubb subsidiary Ace American Insurance Co. (“Ace”) to evade liability from its excess insurer, Zurich North America subsidiary American Guarantee & Liability Insurance Co. (“AGLIC”), after Ace unreasonably rejected a settlement offer within its policy limits in violation of its Stowers duty. See Am. Guarantee & Liab. Ins. Co. v. ACE Am. Ins. Co., 19-20779, 2020 WL 7487067 (5th Cir. Dec. 21, 2020). As a result, Ace must now pay approximately $7.27 million in damages to AGLIC to cover its costs to settle the underlying lawsuit plus prejudgment interest and court costs.

The Hunton Andrews Kurth Insurance Coverage Practice Group has been awarded Tier 1 ranking by US News Media Group and Best Lawyers, placing them among the top practitioners nationally for policyholder insurance coverage representation. In addition to its Tier 1 ranking nationally, the Firm also received a regional Tier 1 ranking in Washington, DC and a Tier 2 ranking in Atlanta, GA.

On October 6, 2020, U.S. District Judge Thomas Thrash Jr. issued Georgia’s first COVID-19 business interruption insurance decision, finding Governor Brian Kemp’s State of Emergency Executive Order did not cause “physical loss of” the policyholders’ closed dining rooms. Henry’s Louisiana Grill, Inc. et al. v. Allied Ins. Co. of Am., No. 1:20-cv-2939-TWT (N.D. Ga. Oct. 6, 2020). The decision takes an unusually narrow view of the phrase “loss of,” as it is used in the policy and, consequently, reaches a conclusion that is inconsistent with how other courts have analyzed the phrase.

On September 29, 2020, The National Law Review published an article by Scott DeVries, Lorie Masters, and Michael Huggins concerning setting the correct prism for construing policy language, which can be outcome-determinative in COVID-19 business interruption cases.  A key takeaway from the article is that a court’s adherence to traditional principles of insurance policy interpretation may result in more cases finding in favor of business interruption coverage for COVID-19 related claims.  For example, relevant principles of interpretation include, among others, that ...

The Hunton Andrews Kurth Insurance Coverage Practice Group is pleased to announce that insurance coverage associate Latosha M. Ellis has been honored by Virginia Lawyers Media, the publisher of Virginia Lawyers Weekly, in its 2020 class of “Up & Coming Lawyers.”

As Texas and Louisiana brace for Hurricane Laura to make landfall, policyholders in the affected regions should be making last minute preparations to ensure their properties are covered in the storm’s wake.

On August 25, 2020, an article by Syed Ahmad and Michael Huggins was run in Mealey’s Insurance concerning the use of direct and circumstantial evidence to show the presence of COVID-19 for purposes of seeking business interruption coverage.  A key takeaway from the article is that direct evidence of COVID-19 at a premises, such as through positive test results, may not be necessary to establish the presence of COVID-19.  Instead, insurers and courts should consider circumstantial evidence, with equal weight as may be given direct evidence, such as witness testimony that employees ...

Hunton special counsel Scott DeVries was quoted August 14 in a Bloomberg Law article titled “More Virus Insurance Suits Could Follow as Consolidation Fails.” The article discussed a federal panel’s refusal to centralize hundreds of businesses’ lawsuits against their insurers over pandemic-related coverage. Elaborating on the ruling, DeVries observed that “Insurance contracts are a matter of state law interpretation, so I would be surprised if there weren’t different rulings in different jurisdictions. You could see how some policyholders might have held off on ...

Over the past couple of months, we have written on decisions by various European insurers to pay policyholders for their COVID-19 related losses. That positive trend is now moving across continents.

Benchmark Litigation recently identified the Top 250 Women in Litigation. The list is based on an extensive research process, feedback from clients, and one-on-one interviews. Benchmark has identified the litigators who have participated “in some of the most impactful litigation matters in recent history” and have earned “hard-won respect of their peers and clients.” Lorelie S. Masters was included in the list for the seventh time.

Hunton insurance recovery partner, Mike Levine, recently sat down with Thompson Reuters to discuss his experiences with COVID-19 business interruption claims and litigation.  In the interview, Mike discusses his recently filed lawsuit against AIG Specialty Insurance Company, which he brought on behalf of Circus Circus Casino in Las Vegas.  This is the second major casino lawsuit Mike and the firm have filed; the first being against Affiliated FM Insurance Company on behalf of Treasure Island Casino.  Mike also shares his views on the insurance industry’s apparent concerted ...

Last month we wrote a piece concerning AXA’s agreement to pay COVID-19 related business interruption claims by a group of restaurants in France after a court ruled that the restaurants’ revenue losses resulting from COVID-19 and related government orders were covered under its insurance policies. AXA reportedly has already agreed to pay over 200 COVID-19 related claims.

The unprecedented impact of COVID-19 on the American economy has forced many businesses of all sizes and in all industries to seek some form of financial relief. Perhaps the most prominent source is the Coronavirus Aid, Relief, and Economic Security Act (commonly known as the CARES Act), which provides more than $2 trillion in assistance through the largest economic stimulus package passed by Congress in U.S. history. In a recent article published by ABA Business Law Section’s Business Law Today, Hunton Andrews Kurth insurance attorneys Syed S. Ahmad and Cary D. Steklof discuss ...

Geoffrey Fehling, an associate in Hunton Andrew Kurth’s Insurance Coverage practice, has been appointed to serve as Vice Chair of the Insurance Subcommittee of the American Bar Association’s Business Law Section Director and Officer Liability Committee. The Committee on Director and Officer Liability is part of the ABA Business Law Section’s global network of almost 40,000 business law professionals interested in expanding their knowledge, engaging with their professional communities, and advancing their experience through Section committees, programs, and meetings.

AXA, one of the biggest insurance companies in the world, has agreed to pay COVID-related business interruption claims by a group of restaurants in Paris after a court ruled that the restaurants’ revenue losses resulting from COVID-19 and related government orders were covered under AXA’s policies.

Scott DeVries, the former head of Winston & Strawn’s insurance coverage practice, has joined Hunton Andrews Kurth in the firm’s San Francisco office.  Scott’s addition to the practice adds great depth and experience to an already rich roster of coverage professionals.  The move comes after Winston had transitioned its practice to the representation of insurers.  Hunton – a policyholder-only practice – offers Scott a platform to continue securing coverage for policyholders and a seasoned team of coverage attorneys across the firm’s national footprint.  Scott’s bio can be found here, and an article appearing in Law.com’s The Reporter announcing Scott’s arrival can be found here.

Evolving government orders will affect the way many retail businesses operate and the potential insurance available for losses and expenses. For instance, on April 28, 2020, the State Health Officer of Alabama issued an Order allowing some businesses to reopen, but under strict sanitation and social distancing guidelines. Retail stores, for example, will be allowed to reopen but must maintain a maximum occupancy rate of 50%. While a partial opening may restore some level of activity, because these businesses must operate at a reduced capacity, their operations will not return to normal. Beyond that, while some states are loosening social distancing requirements, others have extended them. Indeed, on the same day that Alabama announced its partial reopening, the Governor of Massachusetts extended the closures of non-essential businesses. Regardless of location, many businesses will likely sustain substantial losses because of these orders, and will incur expenses to comply with evolving requirements and operational guidelines.

Much ink has been spilled about legislators' efforts to protect businesses by ensuring business interruption coverage for losses involving COVID-19. Many have questioned the constitutionality of any such laws. But, as explained in this Law360 article by Hunton attorneys Syed Ahmad and Patrick McDermott, those questions overlook two provisions commonly found in property insurance policies. In short, the provisions recognize the possibility that the insurance contract may conflict with statutes and regulations and incorporate any such conflicting law into the policy ...

Much of the commentary on insurance issues arising from the COVID-19 crisis, including multiple posts on this blog, understandably has focused on recovery under first-party property policies providing business interruption coverage for losses incurred due to office closures, government orders, extra expenses, and other direct costs experienced by employers. There is a much broader range of possible claim scenarios arising from COVID-19 that may go to other kinds of coverages, however; most notably directors and officers liability, management liability, fiduciary ...

Masters and Levine submitted the following “letter to the editor” in the April 7^th, 2020 edition of the Washington Post to tell the other side of the story.

The wave of COVID-19 litigation should cause courts to consider whether the plain meaning of a general liability insuring agreement triggers coverage for certain damages flowing from COVID-19 losses. Policies with insuring agreements providing coverage “because of” bodily injury or property damage are broader than those that apply coverage “for” bodily injury or property damage. Hunton Andrews Kurth insurance attorneys Syed S. Ahmad and Rachel E. Hudgins authored an article published by the Insurance Coverage Law Center analyzing this difference. The full article is available here.

A Houston-area wig store filed the first Texas COVID-19 lawsuit concerning business interruption losses Thursday in a state court in Harris County. The plaintiff, Barbara Lane Snowden DBA Hair Goals Club, filed suit, a copy of which can be found here, against Twin City Fire Insurance Company, a Hartford Insurance company. The lawsuit alleges that plaintiff has sustained and will continue to sustain covered losses during the COVID-19 outbreak and subsequent Harris County Stay Home Order. The lawsuit further alleges that plaintiff already sought coverage for its business interruption costs under the Twin City policy, but that claim was denied. Accordingly, plaintiff has alleged breach of contract, unfair settlement practices, violation of the Prompt Pay Act, and breach of the duty of good faith and fair dealing for Twin City’s wrongful denial of the claim.

In responding to a certified question from the Fifth Circuit in Richards v. State Farm Lloyds, the Texas Supreme Court held that the “policy-language exception” to the eight-corners rule articulated by the federal district court is not a permissible exception under Texas law.  See Richards v. State Farm Lloyds, 19-0802, 2020 WL 1313782, at *1 (Tex. Mar. 20, 2020).  The eight-corners rule generally provides that Texas courts may only consider the four corners of the petition and the four corners of the applicable insurance policy when determining whether a duty to defend exists.  State Farm argued that a “policy-language exception” prevents application of the eight-corners rule unless the insurance policy explicitly requires the insurer to defend “all actions against its insured no matter if the allegations of the suit are groundless, false or fraudulent,” relying on B. Hall Contracting Inc. v. Evanston Ins. Co., 447 F. Supp. 2d 634, 645 (N.D. Tex. 2006).  The Texas Supreme Court rejected the insurer’s argument, citing Texas’ long history of applying the eight-corners rule without regard for the presence or absence of a “groundless-claims” clause.

As previously reported on the Hunton Employment & Labor Perspectives Blog, workers’ compensation provides the exclusive remedy for injuries and illness that employees suffer arising out of and within the course of their employment.   Workers’ compensation provides the exclusive remedy for injuries and illness that employees suffer arising out of and within the course of their employment.  In the early stages of this pandemic, work-related travel to high impact countries or work-related exposure in a case that was being tracked by public health authorities provided support for work-related exposure.  In healthcare settings, work-related exposure will likely be established when exposure to infected patients occurs.  But in other settings and as the diseases spreads in the United States, the analysis about whether an illness is covered by workers’ compensation will be more difficult.

The RIMS 2017 Annual Conference & Exhibition is just around the corner.  Visit members of Hunton & Williams LLP’s Insurance Coverage Team at Booth #2421 to learn more about our legal services.