Hunton Insurance Recovery Blog

As we ring in the New Year, one thing remains the same: understanding the definitions and conditions in your insurance policy is critical. In a recent decision, a Florida federal court in Ohio Security Insurance Co. v. E Kelly Enterprises Inc. et al., No. 3:22-cv-24754, held that an insurer had no duty to defend or indemnify a general contractor and no duty to indemnify a subcontractor for damages from defective work on a naval base, based on the policy’s definition of “suit,” “property damage,” and allocation requirements. The decision highlights the importance of numerous issues in the context of commercial general liability policies, including the nuances of policy definitions, obtaining insurer consent when necessary, and allocation between covered and uncovered claims.

In HDI Global Specialty SE v. PF Holdings LLC, the Eleventh Circuit recently affirmed a district court ruling that the insurers of two apartment management companies did not have to cover a $54 million arbitration award against the companies for their alleged mismanagement of government-subsidized apartments. The Eleventh Circuit held that management companies’ failure to cooperate breached general liability insurance policies issued by the insurers.

A Delaware court recently granted summary judgment to a mortgage broker targeted in a federal government investigation for alleged False Claims Act violations, holding that the company’s directors and officers liability (“D&O”) insurer was required to indemnify more than $15 million in settlement costs with the U.S. Department of Justice. Guaranteed Rate, Inc. v. ACE American Insurance Company, No. N20C-04-268 MMJ CCLD (Del. Super. Ct. Sept. 6, 2022). We previously reported on the policyholder’s earlier victory in this case, in which the court held that a Civil Investigative Demand (“CID”) from federal authorities triggered the insurer’s obligation to pay defense costs under the D&O policy.