Hunton Insurance Recovery Blog

After a four-day trial, an Arizona federal jury found that Western Truck Insurance Services, Inc., an insurance broker, was negligent in selling Madison Alley Transportation and Logistics Inc. a business interruption policy with inadequate annual limits. Based on its finding of negligence, the jury determined that the broker was liable for $685,000 of $1,000,000 in damages suffered by Madison Alley as a result of a flood in its warehouse.  The verdict and Complaint, filed in Arizona state court before the case was removed, can be found here and here.

Recent headlines underscore the security challenges faced by public-facing businesses. From physical threats to cyber attacks targeting a wide range of critical infrastructure, companies in diverse sectors, such as the financial, retail, entertainment, energy, transportation, real estate, communications and other areas, face a challenging landscape of risks and potential liabilities. Join us on October 28, 2019, at 12:00 p.m. EST, for a webinar to discuss these issues, including why companies should consider SAFETY Act protection and how to obtain it.

Hunton Insurance Coverage practice partner Michael Levine will be speaking in an upcoming Strafford live webinar, "Depreciation of Labor in Property Insurance Claims: Guidance From Recent Cases," scheduled for Wednesday, October 30, 1:00pm-2:30pm EDT.

In Dunn, et al. v. Columbia National Insurance Company, No. 2:17-cv-0246 (N.D. Ga.), an insurance company refused to defend an insured in a personal injury claim contending that the insured failed to cooperate in the defense. The underlying claim stemmed from an automobile accident, where an employee of Lawson Air Conditioning and Plumbing, Inc. (“Lawson”), Ronald Patterson, struck members of the Dunn family with a pickup truck owned by Lawson as the family was walking out of a Walmart store. The Dunn family members suffered bodily injury as a proximate result of the accident.  Patterson admitted fault.

A federal court in Illinois ruled recently, in Cincinnati Insurance Company v. H.D. Smith Wholesale Drug Company, that Cincinnati Insurance Company was required to indemnify H.D. Smith for a $3.5 million settlement it reached with the State of West Virginia.  The settlement resolved an action in which West Virginia alleged that H.D. Smith contributed to the state’s opioid addiction epidemic through its negligent distribution of opioid prescription drugs.

In a recent Global Data Review article, Hunton Andrews Kurth insurance practice head Walter Andrews commented on the FBI’s guidelines on ransomware payments and the insurance industry’s aggressive marketing of ransomware policies, noting that policyholders now have a resource that can help cover the cost of such an attack. The full Global Data Review article can be found here.

Recap of Hunton Insurance Recovery Group presentations in August and September 2019 focusing on key risk management techniques and strategies for maximizing recoveries under corporate insurance policies and enforcing indemnity rights under technology, sales, services, outsourcing, and other commercial contracts:

• John Eichman and Sergio F. Oehninger presented a seminar on Electronic Crime – Insurance Coverage for Cyber Attacks and Computer Fraud, Independent Community Bankers of America Webinar Series, September 24, 2019.
• Sergio F. Oehninger presented seminars on ...

Insurance companies frequently raise the so-called “dishonesty” exclusion that is typically found in most professional liability and directors and officers insurance policies.  Last week, the U.S. Court of Appeals for the Sixth Circuit took a substantial step toward curtailing that practice.  In a coverage dispute with eight-figure implications, the appellate court found in favor of the policyholder and ruled that publishing false statements does not equate to dishonesty and thus is not sufficient to support application of a dishonesty exclusion.

The Seventh Circuit held last week that a manufacturer’s insurer must cover its insured, a designer and builder of anaerobic digesters, under its errors and omissions policy for claims alleging breach of contract, despite an exclusion in the policy for claims arising out of the breach of an express or oral contract. The decision in Crum & Forster Specialty Insurance Company v. DVO, Inc., No. 18-2571 (7th Cir. Sept. 23, 2019), illustrates the practical application of policy construction to avoid what would otherwise amount to an illusory promise of coverage.

Congratulations to Hunton Andrews Kurth LLP insurance recovery lawyer, Geoffrey Fehling, on his confirmation by the DC Bar Foundation’s Board of Directors to the organization’s Young Lawyers Network Leadership Council.