AXA, one of the biggest insurance companies in the world, has agreed to pay COVID-related business interruption claims by a group of restaurants in Paris after a court ruled that the restaurants’ revenue losses resulting from COVID-19 and related government orders were covered under AXA’s policies.
An appeals court has overturned an insurer’s successful dismissal of an insurance coverage lawsuit arising from the insurer’s refusal to defend a North Carolina assisted living operator in a False Claims Act lawsuit alleging more than $60 million in damages. The court held that that the insurer improperly denied coverage under the operator’s professional liability policy (covering “damages resulting from a claim arising out of a medical incident”) because the alleged improper billing had a causal connection to the operator’s failure to render medical professional services and, therefore, “arose out of” a covered medical incident.
A federal court recently added prejudgment interest for the period before and after an arbitration award despite the panel’s prior refusal to award interest. ExxonMobil Oil Corp. v. TIG Ins. Co., No. 16-cv-9527 (S.D.N.Y. May 18, 2020).
The Fourth Circuit recently held that an insurance company was obligated to cover millions in legal fees incurred in defending an employment suit against the owners of DARCARS, a DC-area based car dealership. The court ruled that the relevant policy exclusion was ambiguous and, as a result, construed the exclusion narrowly against the insurer and in favor of coverage.
Scott DeVries, the former head of Winston & Strawn’s insurance coverage practice, has joined Hunton Andrews Kurth in the firm’s San Francisco office. Scott’s addition to the practice adds great depth and experience to an already rich roster of coverage professionals. The move comes after Winston had transitioned its practice to the representation of insurers. Hunton – a policyholder-only practice – offers Scott a platform to continue securing coverage for policyholders and a seasoned team of coverage attorneys across the firm’s national footprint. Scott’s bio can be found here, and an article appearing in Law.com’s The Reporter announcing Scott’s arrival can be found here.
Pennsylvania’s highest court recently rejected Erie Insurance Exchange’s argument that it had no duty to defend a claim arising out of a shooting because it did not involve an accident, and therefore, there was no “occurrence” under the policy. The court held that the duty to defend was triggered because the underlying allegations were not “patently outside the policy coverage.” This decision can have far reaching effects on other kinds of claims involving intentional conduct.
Evolving government orders will affect the way many retail businesses operate and the potential insurance available for losses and expenses. For instance, on April 28, 2020, the State Health Officer of Alabama issued an Order allowing some businesses to reopen, but under strict sanitation and social distancing guidelines. Retail stores, for example, will be allowed to reopen but must maintain a maximum occupancy rate of 50%. While a partial opening may restore some level of activity, because these businesses must operate at a reduced capacity, their operations will not return to normal. Beyond that, while some states are loosening social distancing requirements, others have extended them. Indeed, on the same day that Alabama announced its partial reopening, the Governor of Massachusetts extended the closures of non-essential businesses. Regardless of location, many businesses will likely sustain substantial losses because of these orders, and will incur expenses to comply with evolving requirements and operational guidelines.
Much ink has been spilled about legislators’ efforts to protect businesses by ensuring business interruption coverage for losses involving COVID-19. Many have questioned the constitutionality of any such laws. But, as explained in this Law360 article by Hunton attorneys Syed Ahmad and Patrick McDermott, those questions overlook two provisions commonly found in property insurance policies. In short, the provisions recognize the possibility that the insurance contract may conflict with statutes and regulations and incorporate any such conflicting law into the policy, including any changes to statutes or regulations after the policy has been issued. In the article, the authors detail how those provisions can undermine constitutional challenges to the legislation under consideration.
Much of the commentary on insurance issues arising from the COVID-19 crisis, including multiple posts on this blog, understandably has focused on recovery under first-party property policies providing business interruption coverage for losses incurred due to office closures, government orders, extra expenses, and other direct costs experienced by employers. There is a much broader range of possible claim scenarios arising from COVID-19 that may go to other kinds of coverages, however; most notably directors and officers liability, management liability, fiduciary liability, and similar insurance coverages. Hunton Andrews Kurth insurance attorneys Lawrence J. Bracken II, Lorelie S. Masters, and Geoffrey B. Fehling have authored a guest article published on The D&O Diary, analyzing the importance of D&O coverage in this crisis. The full article is available here.
A rare public dispute concerning coverage under a representations and warranties insurance policy is being litigated in New York’s Commercial Division. Although the case is only at the motion to dismiss stage, there are some preliminary takeaways that may help other practitioners in the space avoid similar disputes. Hunton insurance lawyers, Syed S. Ahmad, Patrick M. McDermott, and Kevin V. Small discuss those lessons in a recent Law360 article, available here.