Hunton Insurance Recovery Blog

As discussed in prior posts, recent cyber events, such as the “Wanna Cry” ransomware attack, serve as important reminders to policyholders that cyber insurance should remain a priority for any business facing potential exposure from a cyber event. A recent report further underscores the potential impact of a major global cyber event, estimating that the resulting loss could exceed $53 billion worldwide, on par with the damage caused by catastrophic natural disasters such as hurricanes.

Earlier this week, Lloyd’s of London issued an emerging risk report, co-authored with risk-modeling firm Cyence, that examines several plausible cyber-risk scenarios to help insurers and policyholders understand cyber liability and risk exposures in an area that the report concludes is relatively underdeveloped compared with other classes of insurance.

In 2015 and 2016, we discussed certain provisions of the then drafts of the Restatement of the Law, Liability insurance, including the Duty to Cooperate, here, and Duty to Defend, here and here. In late May 2017, the American Law Institute met to approve the Proposed Final Draft—the culmination of over seven years of work on this project. Not surprisingly, many of the issues discussed in the Restatement have been hotly contested by insurers. While in many instances, the reporters simply opted for the majority rule, in a few instances, the Restatement may seek to move the law on key ...

In the linked Client Alert, my colleague, Geoff Fehling, discusses the recent federal appellate decision in Camacho v. Nationwide Mutual Insurance Co., No. 16-14225, 2017 WL 2889470 (11th Cir. July 7, 2017), where the Eleventh Circuit affirmed a Georgia district court’s refusal to disturb a jury award for the policyholder arising from the insurer’s failure to accept a time-limited settlement demand, holding that the lower court’s order was “thorough and well-reasoned.”

In the linked Client Alert, my colleagues, Lorie Masters and Brittany Davidson, discuss the recent New Jersey appellate court decision in Haskell Prop., LLC v. Am. Ins. Co., No. A-1452-14T2 (N.J. Super. Ct. App. Div. June 29, 2017), where the court again confirmed that, in “occurrence” policies, an insured can assign its policies after a loss even if the policy has an anti-assignment provision.

Commercial general liability policies typically provide coverage to insureds for losses resulting from property damage caused by an “occurrence,” usually defined in the policy as “an accident, including continuous or repeated exposure to substantially the same harmful conditions.” In the context of food recalls, however, the exact cause of the food damage, whether contamination, spoilage or something else, may be unknown. This creates uncertainty, and in turn, a coverage dispute, over whether the cause of damage was indeed accidental, and thus a covered ...

Coverage often turns on the meaning of a single word or phrase in an insurance policy. The definition of “counterfeit” in financial institution bonds can be especially tricky. On June 12, 2017, the court in Harvard Sav. Bank v. Sec. Nat’l Ins. Co., No. 15-CV-11674, 2017 WL 2560900, at *1 (N.D. Ill. June 12, 2017) addressed the definition of “counterfeit” in the financial institution bond issued by Security National Insurance Company to Harvard Savings Bank. As the ruling illustrates, terminology that may appear to be insignificant can often make all the difference between millions of dollars in recovery versus no coverage being available.

A case decided last week by the Sixth Circuit illustrates the importance of seeking bankruptcy claim policy amendments when placing D&O coverage. Indian Harbor Ins. Co. v. Zucker (6th Cir. Jun. 20, 2017) involved the application of the insured-vs.-insured exclusion and specifically, whether the policy’s insured-vs.-insured exclusion precluded coverage for a claim brought by a company’s liquidating trust, to which the company’s claims had been assigned by the company as debtor-in-possession after the company filed for bankruptcy. After the company’s claims were assigned to the liquidating trust, the trustee sued several of the company’s former executives for breach of fiduciary duty.

My partner, Walter Andrews, recently commented in a Law360 article concerning the top insurance cases to watch in 2017.  The Law360 article, titled Insurance Cases to Watch in the 2^nd Half of 2017, features Andrews commenting on the impact of Global Reinsurance Corp. of America v. Century Indemnity Co., case number CTQ-2016-00005, in the Court of Appeals of the State of New York, where he points out how a win for Global Re could result in a huge windfall for the reinsurer by saving on its defense costs, since reinsurers typically must pay both indemnity and defense costs.  Andrews also ...

Last week, my partner, Syed Ahmad, commented on some of the biggest insurance rulings of the year in a Law360 feature article that can be found here.  Among those decisions is USAA Texas Lloyd’s Co. v. Menchaca, where the Texas Supreme Court ruled that that policyholders may recover for bad faith in the absence of coverage under their policy.  Ahmad also discussed the Connecticut appeals court decision in R.T. Vanderbilt Co., Inc. v. Hartford Acc. And Indem. Co., and its ruling that insurers may not force policyholders to act as an insurer during policy periods in which insurance was not ...

Ride and homesharing technologies like Uber and Airbnb are now ubiquitous. Slice, an on-demand insurance provider, seeks to fill the gap between the demands of these on-the-go services and traditional insurance contracts, which may not cover home rental or car sharing. Slice users can pick and choose the dates for which they receive coverage. So, for example, a homeowner that rents her home to Airbnb renters for two nights can obtain coverage solely for those two nights.