Hunton Insurance Recovery Blog

Hunton Andrews Kurth LLP partner Syed Ahmad was quoted on July 20 in a Law360 article titled “R&W Insurance Claim Frequency Expected To Normalize.”  The article discussed the recent reduction in R&W claims and industry experts’ expectations that claim frequency will return to normal levels this year.  Mr. Ahmad commented on the challenges policyholders may face when disputing claims in court.  In particular, while there is plenty of case law regarding disputes between buyers and sellers over breaches of representations and warranties, there is very little precedent on how ...

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 ...

On December 9^th, the Eleventh Circuit held that a loss of over $1.7 million to scammers was covered under a commercial crime insurance policy’s fraudulent instruction provision.

The Illinois Supreme Court’s recent decision in Sanders v. Illinois Union Insurance Co., 2019 IL 124565 (2019), announced the standard for triggering general liability coverage for malicious prosecution claims under Illinois law.  In its decision, the court construed what appears to be a policy ambiguity against the policyholder in spite of the longstanding rule of contra proferentem, limiting coverage to policies in place at the time of the wrongful prosecution, and not the policies in effect when the final element of the tort of malicious prosecution occurred (i.e. the exoneration of the plaintiff).  The net result of the court’s ruling for policyholders susceptible to such claims is that coverage for jury verdicts for malicious prosecution – awarded in today’s dollars – is limited to the coverage procured at the time of the wrongful prosecution, which may (as in this case) be decades old.  Such a scenario can have costly consequences for policyholders given that the limits procured decades ago are often inadequate due to the ever-increasing awards by juries as well as inflation.  Moreover, it may be difficult to locate the legacy policies and the insurers that issued such policies may no longer be solvent or even exist.  A copy of the decision can be found here.