Hunton Insurance Recovery Blog

As social media continues to grow, businesses have turned to different platforms to promote their products. This advertising strategy can have unintended consequences, including copyright infringement claims, if businesses fail to take certain steps when sharing photos and videos to promote their product.

For example, many multinational music companies have filed lawsuits against brands for copyright infringement. Given the frequency of these claims, businesses may think that infringement and similar intellectual property claims are covered by their liability insurance policies. But that is not always the case.

The most common source of coverage is “Coverage B” in commercial general liability policies, which protects against claims alleging personal and advertising injury. Those claims can include allegations of libel, slander, invasion of privacy, copyright infringement, false arrest, and wrongful eviction. All policies are not created equal, however, and references to advertising or intellectual property rights may not actually lead to coverage for social media missteps involving alleged infringement. As a result, it is important for an insured to understand the coverage afforded under their CGL policies and additional coverage options that may provide broader coverage.

There are several common limitations on coverage that may come into play for claims involving social media.

If your company has been impacted by today’s network outage issues, know that insurance may be able to help. Many, but not all, cyber and technology errors and omissions (“Tech E&O”) insurance policies include broad dependent business interruption coverage for losses caused by system failures of a company or vendor on which you rely to operate your business.

A recent New Jersey Superior Court decision highlights the risks policyholders face when officers or directors serve dual-capacity roles, such as participating on boards for multiple companies.

Insurance policies typically require a policyholder to provide notice to the insurer. And the notice requirements can vary between policies. That is why the language of the notice provision can be critical to interpreting its requirements. But the language is not always clear. In a recent article published by Mealey’s Insurance, Hunton attorneys Syed Ahmad and Yosef Itkin examine this type of scenario where a court determined that the language of a policy’s notice requirement was indeed ambiguous and construed it in favor of the policyholder, finding that the notice requirement was satisfied.

Last week, in Golden Bear Insurance Company v. 34th S&S, LLC, a Texas federal court held that an insurer had no duty to cover a personal injury judgment in excess of the $1 million policy limit. The holding reminds parties in Texas to carefully consider the most basic—and sometimes very particular—requirements surrounding Stowers demands.

The Georgia legislature recently amended O.C.G.A. § 9-11-67.1, the statute that sets forth requirements for pre-answer settlement demands in motor vehicle personal injury cases, to temper use of such pre-answer settlement demands to set up bad faith failure-to-settle claims against insurers. These pre-answer demands are known as Holt demands based on the Georgia Supreme Court case of S. Gen. Ins. Co. v. Holt, 262 Ga. 267, 416 S.E.2d 274 (1992), which established that an insurer which fails to settle a claim for its insured—and is found to have done so negligently, fraudulently, or in bad faith—may be liable for damages in excess of the insurance policy limits.

In a recent Client Alert, Hunton insurance partner Geoffrey Fehling discusses the impact of the California appellate court decision Practice Fusion, Inc. v. Freedom Specialty Insurance Co., where the court denied coverage under a directors and officers liability policy for a software developer’s $118 million settlement with the US Department of Justice to resolve allegations that the company violated anti-kickback laws in designing and implementing sponsored alerts in electronic health records software. 

The Northern District of New York recently denied an insurer’s motion to dismiss a bad faith claim, finding that the complaint alleged that the insurer violated New York’s law against deceptive acts and practices. The statute provides key protections to policyholders and is an important tool that policyholders can leverage against insurers who wrongfully deny coverage.

The Los Angeles Superior Court recently gave the production companies that produced the Netflix series “House of Cards” their “maybe” by allowing the plaintiffs’ coverage suit against Firemans Fund Insurance Company to proceed. The court held that allegations in the third amended complaint facially satisfied the policy’s insuring agreement by alleging that House of Cards’ lead actor, Kevin Spacey, was “necessarily prevented” from continuing or completing his duties under his contract and that his sickness was the direct and sole cause of the plaintiffs’ claimed loss. The court dismissed the plaintiffs’ bad faith claim, effectively ending the plaintiffs’ campaign to recover punitive damages.

Insurance coverage lawsuits often hinge on the plain and ordinary meaning of specific words or phrases. But not every word in an insurance policy can be defined. Yet without stable and predictable definitions, neither policyholders nor insurers can establish a clear and consistent scope of coverage. In a recent concurring opinion, Eleventh Circuit Judge Kevin Newsom suggests that artificial intelligence (AI) large language models (LLMs) could help resolve these definitional debates. His opinion in Snell v. United Specialty Insurance Company, No. 22-12581, 2024 WL 2717700 (11th Cir. May 28, 2024) highlights the pros and cons of calling upon technology to supply plain meaning.