Hunton Insurance Recovery Blog

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 ...

A rare public dispute concerning coverage under a representations and warranties insurance policy is being litigated in New York’s Commercial Division. Although the case is only at the motion to dismiss stage, there are some preliminary takeaways that may help other practitioners in the space avoid similar disputes. Hunton insurance lawyers, Syed S. Ahmad, Patrick M. McDermott, and Kevin V. Small discuss those lessons in a recent Law360 article, available here.

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.

Hunton Andrews Kurth LLP is proud to announce that associate Latosha Ellis is running for Secretary of the Women’s Bar Association of DC! We strongly support Latosha’s campaign and encourage you to vote for your favorite candidate via the email ballot circulated to all current members in good standing. If you did not receive a ballot or need to check your membership status, contact admin@wbadc.org. Polls close on April 10^th so cast your votes today!

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.

The California Supreme Court ruled that vertical exhaustion applied to determine how a policyholder could access its excess insurance policies. Montrose Chem. Corp. v. Superior Court, No. S244737 (Cal. Apr. 6, 2020). The case involved coverage for Montrose Chemical Corporation’s environmental liabilities at its Torrance facility under insurance policies issued from 1961 to 1985. Montrose and its insurers agreed that Montrose’s primary policies were exhausted but disputed the sequence in which Montrose could access the excess insurance policies.

Louisiana joins a growing list of states, including New Jersey, Massachusetts, Ohio, and New York that are considering legislation, here and here,  that would require insurance coverage for the business interruption losses caused by COVID-19.  We have discussed other legislative efforts here and here.  The Louisiana House and Senate have each put forth bills that would, like the other states’ measures, require insurers to cover business interruption losses due to COVID-19 despite policy language that an insurer might try to rely on to argue otherwise.  Unlike the other bills ...

Following New Jersey, where similar legislation remains under informal discussion, lawmakers in Ohio, Massachusetts, and New York have now introduced legislation that would provide relief to small businesses for COVID-19 business interruption losses.  The legislation is conceptually identical to the legislation introduced in New Jersey, discussed here last week.  Although the New Jersey bill was subsequently pulled for further consideration with insurance industry representatives, it does appear to have been the roadmap for the Ohio, Massachusetts, and New York measures.  ...