Hunton Insurance Recovery Blog

Most insurance policies seek notice from the insured “as soon as practicable.” In certain jurisdictions, an insurance company cannot void coverage by arguing that the insured’s notice was somehow “late” unless the insurer can show that it has been prejudiced. This is referred to as the “notice-prejudice” rule. Because insurance is a state-law issue, the law on this issue varies from state to state.

Following an investigation involving public companies potentially impacted by the 2020 SolarWinds software compromise, the US Securities and Exchange Commission recently charged several companies with making materially misleading disclosures regarding cybersecurity risks and intrusions. The SEC’s enforcement is the latest example of “cyber as a D&O risk,” underscoring the importance of maintaining robust directors and officers (D&O) liability coverage, along with cyber insurance, as part of a comprehensive liability insurance program designed to respond to cyber incidents.

Last week, just before Hurricane Milton made landfall, Florida state officials issued an emergency decree to all licensed insurance adjusters in the state to protect homeowners against “unfair and deceptive acts” and “post-storm fraud” by insurance carriers. According to The Washington Post, the Florida Department of Financial Services is requiring that all claim adjusters provide an explanation for each change they make to a consumer’s loss estimate, document those changes, and retain all versions of the estimate and identify who made those revisions. When processing claims, adjusters must also use an electronic estimating system that provides an itemized report of all damage, as well as labor, materials, equipment and supplies. Those costs should be consistent with what a contractor or a repair company in that particular area would charge.

Just two months ago, Illinois Governor J. B. Pritzker signed significant amendments to the Illinois Biometric Information Privacy Act (BIPA). While the amendments limit businesses’ exposure to BIPA-related damages, significant BIPA exposures still persist. Given these continuing exposures, businesses should consider the protections that insurance can offer. The Illinois Appellate Court’s September 2024 decision in Tony’s Finer Foods Enterprises v. Certain Underwriters at Lloyd’s, 2024 IL App (1st) 231712 offers concrete guidance for businesses thinking about doing just that.

With increasing frequency, companies are coming under fire for changes in customer loyalty programs, many of which occur without warning or recourse. Whether it is a persistent devaluation of miles or points, arbitrary expiration dates or some other perceived loss of value, customers and regulators are becoming increasingly discontent with programs that are touted as an added value to repeat customers.

As artificial intelligence (AI) continues to revolutionize the business landscape, its associated risks are becoming more complex, widespread, and consequential. While the insurance industry determines the precise circumstances in which insurance may cover these risks, businesses should consider the complementary benefits of indemnification agreements as gap fillers.

In a recent client alert, Hunton Andrews Kurth LLP real estate attorney Laurie Grasso and insurance attorneys Geoffrey B. Fehling, Cary D. Steklof, and Evan J. Warshauer discuss the important lesson real estate companies and their officers and directors can take away from the Illinois federal district court’s decision in Old Guard Insurance Company v. Riverway Property Management, LLC et al., No. 1:23-cv-01098 (C.D. Ill. Sep. 6, 2024). The court found a commercial general liability insurer had no duty to defend or indemnify a property management company or its owner in lawsuits that included allegations of intentional conduct, holding that the allegations did not fall within the policies’ definition of occurrence, which required “an accident.”

This summer, in Yacullo v. AIG Property Casualty Company, the United States District Court for the Southern District of California held that an insurer’s violations of the state’s insurance regulations “is a factor that may be considered by a jury” in determining whether the insurer acted in bad faith. The case should serve as an important reminder to policyholders to carefully consider state-specific insurance regulations when asserting a bad faith insurance coverage claim against their insurers.

Boston-based partner Geoffrey Fehling was recently sworn in as a member of the Town of Wellesley Historical Commission. The Commission was created to preserve and protect the town’s tangible evidence of the architectural, aesthetic, cultural, economic, political and social history.

In Universal Prop. & Cas. Ins. Co. v. Qureshi, Florida’s Fourth District Court of Appeals recently ruled that the lower court mistakenly allowed the jury to consider evidence of repair estimates in a claim for replacement cost value benefits where repairs were not actually completed. 2024 WL 3514542, at 1 (Fla. 4th DCA 2024).