Hunton Insurance Recovery Blog

In this post in the Blog’s Bermuda Form Insurance Arbitration Series, we discuss additional features of the Bermuda Form that policyholders should take into consideration.

In this post in the Blog’s Bermuda Form Insurance Arbitration Series, we discuss some key features of the Bermuda Form that policyholders should take into consideration.

In a recent insurer’s failure-to-settle case, Hughes v. First Acceptance Ins. Co. of Ga., the Georgia Court of Appeals reaffirmed that there is no hard-set rule conducive to summary judgment; rather, the court ruled that a jury should determine whether the insurer’s actions had been “reasonably prudent.”  Plaintiff Robert Jackson allegedly caused a five-vehicle collision that resulted in his death and the serious injuries of others, including Julie An and her minor child, Jina Hong.  An and Hong, through their counsel, communicated with Jackson’s insurance company, First Acceptance, stating that they were “interested” in settling their claims within Jackson’s policy limit of $25,000.  Counsel also requested that the insurer send him policy information within 30 days.  An later claimed that this communication represented an offer of settlement, when, 41 days later, they sent First Acceptance a letter withdrawing their “offer” and stating their intent to file suit due to the insurer’s failure to respond.  An and Hong then filed suit and were ultimately awarded $5,334,220 in damages.  First Acceptance paid $25,000 towards the award, leaving Jackson’s estate exposed to over five million dollars in damages.

Last week, Golden Bear Insurance Company became the first admitted insurer approved by the California Department of Insurance to provide insurance coverage for marijuana companies. Golden Bear will now begin offering first- and third-party insurance coverage specifically targeting marijuana companies in the state.

Insurance giant Allianz Global Corporate & Specialty S.E. announced yesterday that it has launched a blockchain prototype for a global captive insurance program. The project focuses on professional indemnity and property insurance for a customer with a captive insurance program with local subsidiaries in the U.S., China and Switzerland. Captive programs are complex programs used frequently by multinational organizations to self-insure their risks. These organizations create their own self-insurance programs, or ‘captives,’ which aggregate assets or insurance exposures from their global operations.  The programs collect premiums from each operating unit much like an ordinary insurer.  The captive entity likewise pays out claims as they arise. Allianz administers the captive insurer as a “fronting insurer,” using the insurer’s diverse multi-national network to ensure global reach and compliance.  Blockchain technology automatically connects all parties involved in the insurance program by using its distributed ledger technology, which is shared among all program participants and can record transactions and data entries. Updates and changes to the data are shared in real-time across all users. This creates a much faster, transparent, secure and efficient means of distributing information, conducting business processing and recording transactions across multiple parties.

An eye-popping settlement in Georgia serves as a cautionary tale for insurers who refuse to provide a straight answer when responding to a demand for policy limits and as a lesson for insureds dealing with recalcitrant insurers: Don’t just take “no” for an answer.

The commercial insurance programs of many multi-national and United States businesses include “Bermuda Form” policies, a special policy form developed in Bermuda in the mid-1980s that includes unique provisions and provides for arbitration of disputes, usually in London under the substantive law of New York. These provisions provide challenges for United States policyholders and “stack the deck” in favor of the insurance companies that are repeat players in “Bermuda Form arbitrations.”   Policyholders should carefully consider purchase of Bermuda Form policies and ensure that they are structured as favorably as possible for the policyholder.  Presentation of claims under Bermuda Form policies can present special challenges.  Therefore, if claims arise, policyholders should consult counsel with expertise with Bermuda Form policies to ensure that the claim is presented with an eye toward the unique definition of “occurrence” and other provisions included in Bermuda Form policies.

A recent article published by Securityroundtable.org highlights the vulnerabilities businesses face in a world of e-commerce and interconnectivity, and how proper planning through a tailored cybersecurity program that includes - among other components - appropriate insurance coverage for cyber risks can help prevent a successful attack and mitigate the financial impact should one occur. Whether the issue is prevention or risk mitigation, cybersecurity should be at the top of the corporate agenda. As discussed in the Securityroundable.org article, Lisa Sotto, chair of the ...

Homeowners and businesses are beginning the painful recovery process following the devastating fires in California. Insurance money will be critical to that process. Read Lorie Masters' and Michael Levine's article in Law360 about how you can protect your right to access those critical funds.

On Tuesday, the U.S. District Court for the District of New Jersey granted Travelers’ motion to dismiss Posco Daewoo America Corporation’s suit for coverage under the computer fraud provision of its crime insurance policy.  Distinguishing itself from precedent like Medidata, Principal Solutions Group, Apache and American Tooling Center, Daewoo did not seek coverage for money fraudulently transferred or stolen from its own accounts.  Instead, Daewoo sought coverage for amounts that had been designated for payment to Daewoo by a third party supplier, Allnex, and stolen from Allnex after a criminal impersonated a Daewoo employee.  The Court held that the crime policy did not cover the lost sums because Daewoo did not “own” the money stolen from Allnex.