In a June 18, 2019 article published in Law360, Hunton insurance team partner Syed Ahmad analyzed some of the most important insurance cases from 2019 so far.

Mr. Ahmad first touched on a pair of rulings from the Montana Supreme Court. In each, that court refused to find coverage for consent judgments negotiated by policyholders. The court in Abbey/Land v. Glacier Construction Partners rejected an underlying consent judgment because it was unreasonable and flowed from collusion between the underlying parties. Then, in Draggin’ Y Cattle Co. v. JCCS, the court reversed a trial court’s holding that an underlying consent judgment was presumptively reasonable, holding that the judgment did not deserve a “presumption of reasonableness,” because the insurer had not breached its duty to defend. Continue Reading Hunton Insurance Partner Syed Ahmad Talks About Hot-Topic Insurance Cases From 2019

Phishing has been around for decades.  But now, the long-lost ancestor claiming to be a foreign prince is stealing more than your grandmother’s savings.  Phishers are targeting corporations—small and big, private and public—stealing sensitive data and money.  When Policyholders take the bait, they had better have a tailored insurance policy to keep their insurers on the hook as well.

Continue Reading Go Phish: Texas Lawsuit Highlights Need for Tailored Cyber Policies

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.

Continue Reading Claims for Negligence? Duty to Defend Triggered

A coverage dispute arising as a result of property damage from Hurricane Frances, which occurred in 2004, will continue following a Florida appellate court decision in an action brought against Citizens Property Insurance Corp.

Continue Reading Florida’s Citizens Property Insurance May Be Immune From Bad Faith, But Is Not Immune From Consequential Damages

A state-appointed panel advised last week that California should change the standard for determining whether utilities are liable for wildfires.  Under the current system, California’s Public Utilities Code § 2106 provides a private right of action by any person or entity that has suffered loss, damages, or injury caused by prohibited or unlawful acts of a public utility.  Relying on this statute, property owners have asserted wildfire-related claims directly against allegedly culpable electric utility companies.  Public utilities in California also face inverse condemnation claims arising out of wildfires.  Under inverse condemnation, where private property is taken for public use and later damaged by the state or its agency, the state or agency is strictly liable to the property owner.

Continue Reading California Commission Recommends Switching To Fault-Based Wildfire Liability Standard for Public Utilities

The City of Baltimore is the latest victim of increasingly common ransomware attacks. On May 7, 2019, unidentified hackers infiltrated Baltimore’s computer system using a cyber-tool named EternalBlue, developed originally by the United States National Security Agency to identify vulnerabilities in computer systems. However, the NSA lost control of EternalBlue, and since 2017, cybercriminals have used it to infiltrate computer systems and demand payment in exchange for relinquishing control. For instance, in Baltimore, the hackers have frozen the City’s e-mail system and disrupted real estate transactions and utility billing systems, among many other things. The hackers reportedly demanded roughly $100,000 in Bitcoin to restore Baltimore’s system. The city has refused to pay.

Continue Reading Will Insurers Declare “War”? The War Exclusion, the Ransomware Attack on Baltimore, and the NSA Cyber-Tool?

The May 13, 2019 decision by the US Supreme Court in Apple, Inc. v. Pepper has brought antitrust concerns, and the insurance issues they raise, front and center.  While Apple, Inc., of course, is a publicly traded company, private companies can also fall victim to these issues and need to look to coverage for protection.  For a discussion of these issues, we repost the article by Hunton Andrews Kurth LLP partner Lorie Masters, insurance broker Marsh and others, which analyzes these often complex issues.  “Optimizing Antitrust Coverage in Private Company D&O Policies,” published by Marsh in Insights, addresses insurance coverage for investigations under antitrust laws that raise the prospect of both civil and criminal liabilities.  Although most of these investigations settle or are resolved without findings of liability, the defense costs can be staggering.  Policyholders should consider whether directors and officers or other insurance applies to cover the costs coming out of such investigations.  To maximize coverage, policyholders should work with their advisers to ensure that policies are worded so as to enhance the prospects for obtaining insurance protection for claims alleging “antitrust violations.”

A federal court in Pennsylvania has held that Liberty Mutual must defend its insured, Hershey Creamery Company, in an intellectual property infringement lawsuit because the suit raises claims that potentially implicate coverage under the policies’ personal and advertising injury coverages. The court further found that the alleged wrongful conduct was not subject to the policies’ IP infringement exclusion.

Continue Reading IP Lawsuit Triggers Insurers’ Duty to Defend

The Delaware Superior Court ruled that insurers could not rely on Written Consent and Cooperation clauses in directors and officers liability insurance policies to avoid coverage for settlements by Dole Food Company, Inc. (“Dole”) in shareholder disputes involving fraud in a go-private transaction.

Continue Reading Court Rejects Insurers’ Argument that Insureds Breached D&O Insurance Policies by Failing to Cooperate and Settling Lawsuits for $222 Million Without Consent

The Scott Fetzer Co. v. Zurich American Insurance Co. matter involved a dispute over coverage for sexual assault claims against Fetzer. Three women filed suit against Fetzer, claiming that John Fields, an independent dealer of vacuums manufactured by Fetzer, verbally and sexually assaulted them. Fetzer’s alleged liability was premised on, among other things, its negligence in supervising its independent contractor’s hiring process. Fetzer settled with each of the three women.

Continue Reading Ambiguous “Occurrence” Language Results In Payment Of Single Deductible Despite Multiple Assaults