Hunton Insurance Recovery Blog

On June 17, 2019, the First Circuit held that an insurer’s duty to defend was triggered because the underlying complaint set forth claims that required a showing of intent as well as claims that sought recovery for conduct that “fits comfortably within the definition of an ‘accident.’” In Zurich American Ins. Co v. Electricity Maine, LLC, Zurich sought declaratory judgment that, under a D&O policy, it had no duty to defend the insured, Electricity Maine, an electrical utility company being sued in the underlying class action. Zurich argued it had no duty to defend because the underlying complaint failed to allege that Electricity Maine engaged in conduct that qualified as an “occurrence” or that caused “bodily injury” under the terms of the policy. The First Circuit disagreed.

In an article appearing in CyberInsecurity News, Hunton insurance recovery partner, Michael Levine, comments on Zurich American Insurance Company’s attempt to invoke a so-called “war exclusion” as a basis for not paying business income losses suffered by snack food giant Mondelez International.  As Levine expains, so-called “war exclusions” have rarely been invoked and only then, in times of clear military or state-sponsored activity.  The Mondelez case will therefore focus on whether a computer attack was indeed an act of war and, importantly, whether and how Zurich ...