Hunton Insurance Recovery Blog

“Loss or damage.” “Caused by or resulting from.” “Faulty, inadequate or defective.” “Direct physical loss of or damage to.”

In coverage litigation, phrases like these can launch a familiar argument: if an insurance policy uses two different words, each must mean something different. Otherwise, one of them is surplusage.

That argument can have force. But it does not always carry the day. As the Supreme Court cautioned in Rimini Street, Inc. v. Oracle USA, Inc., surplusage is an interpretive clue, not a trump card. The Court explained that where one interpretation would create redundancy and another would avoid it, that difference “can supply a clue as to the better interpretation,” but “only a clue,” because “[s]ometimes the better overall reading” “contains some redundancy.” 586 U.S. 334, 346 (2019).

When a cyberattack occurs, companies often focus on the immediate response—investigating the breach, restoring systems, notifying affected individuals, and managing business disruption. But those costs are often only the beginning. In the months and years that follow, organizations increasingly face class actions, regulatory proceedings, and other claims alleging that they failed to safeguard sensitive information, and the cost of defending those actions can ultimately exceed the cost of responding to the breach itself.

The Tenth Circuit recently addressed whether multiple injuries allegedly resulting from an institution’s failure to prevent sexual abuse constitute one “occurrence” or several. In Church of Jesus Christ of Latter-day Saints v. National Union Fire Insurance Co. of Pittsburgh, PA, the court held that the relevant policy language found in many general liability policies was ambiguous and must be construed in favor of the policyholder.

The decision shows that determining the number of occurrences depends not merely on the number of claimants, injuries, or time between injuries, but on the policy language and the alleged cause of liability. That distinction may affect whether coverage applies when a policy includes a per-occurrence self-insured retention or deductible.

Hunton’s insurance coverage team is proud to celebrate the recognition of Andrea DeField on Benchmark Litigation’s 2026 40 & Under List, an annual ranking that highlights the nation’s leading litigators age 40 and under. Andrea was one of only six Hunton lawyers selected and was recognized in the South region. Benchmark Litigation’s 40 & Under List honors attorneys who have distinguished themselves through significant case work, client feedback, and peer review.

New Jersey has some of the strongest consumer-protection laws in the nation. The state’s courts, however, had created judicial carve-outs for professionals and semi-professionals, exempting them from liability under those laws. Those carve-outs expressly included insurance brokers, whom the courts classified as semi-professionals.

That changed in Lowe v. Audet.

The SEC’s effort to rescind its 2024 climate disclosure rules marks a significant change in federal ESG regulation, but it should not be mistaken for a retreat from climate-related disclosure risk.

The Pennsylvania Supreme Court’s recent decision in Samsung Fire & Marine Insurance Co. v. RI Settlement Trust, No. 61 EAP 2024 (Pa. July 21, 2026), rejected three insurers’ attempts to avoid coverage for lawsuits alleging that hotel operators enabled or profited from sex trafficking based on Pennsylvania’s purported public policy against sex trafficking.

The court found that Pennsylvania had no such articulated public policy against insuring those kinds of claims and, absent an exclusion barring coverage for the alleged conduct, the insurance contract would be enforced as written. The ruling is an important reminder for policyholders that courts will enforce the agreed-upon language in policies and will not allow insurers to deny coverage by invoking insurability defenses to eliminate coverage without a clearly articulated public policy in the relevant jurisdiction.

Policyholders facing “related” claim denials under D&O policies should take note of the recent Delaware Superior Court decision, Big V Capital LLC v. Great American Insurance Company (Del. Super. June 30, 2026), where the court held that a derivative action filed during a renewal policy period was covered—even though it was related to an earlier books-and-records action that the policyholder had not reported under the prior policy. The decision turned on the specific structure and wording of the policy at issue but reinforces core policyholder-friendly principles under Delaware law, including construing coverage broadly while refusing to deny claims absent a clear and specific exclusion.

A policyholder’s settlement negotiations—even without a formal proceeding like arbitration or mediation—can give rise to its insurer’s duty to defend.

The Fifth Circuit in BPX Prod. Co. v. Certain Underwriters at Lloyd's London found that because the contractor master services agreement (MSA) required the negotiations, the negotiations were not informal and were a type of alternative dispute resolution (ADR) proceeding. This case emphasizes that trade policyholders and risk management teams should give serious consideration to ADR provisions when working up construction contracts, such as ensuring that the ADR provision requires initial negotiations if the parties seek that type of alternative resolution. These provisions not only pave an avenue for dispute resolution out of court but can also serve as the impetus to trigger an insurer to defend, and indemnify, the claim.

A coverage extension ordinarily does what its title suggests: it extends coverage beyond the standard policy form. But what happens when an insurer tries to use an insurance extension to exclude coverage? That was the question in Parsons v. Crum & Forster Specialty Insurance Company, in which the Indiana Court of Appeals held that the same principles limiting broad pollution exclusions also apply when an insurer invokes a pollution coverage extension to narrow coverage. The result was a significant victory for the policyholder.