Business Interruption

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The surge in prices for eggs—the fourth most-purchased US grocery item—over the past months has surprised many American shoppers.  Last December, a dozen eggs cost $4.25 on average; 120% higher than at the same time in 2021.  The price hike stems from many factors, including supply chain issues and inflation.  But the primary culprit is the outbreak of the deadliest bird flu in US history, which has killed millions of chickens.  Grocery shoppers, however, are not the only ones feeling the economic impact of the ravage to poultry flocks.  Livestock owners and businesses are also feeling the economic pinch, particularly in areas hit hardest by the bird flu.  Insurance is a key component of risk management for livestock businesses and owners.  Here, we explore how insurance can mitigate the risks to livestock owners and businesses of accidental or unexpected events that result in the death of animals or economic losses.…

Continue Reading Coverage for Rotten Eggs:  Livestock Coverage in the Event of a Crisis

On February 6, 2023, The Claims Journal highlighted a letter by members of Hunton’s insurance team, submitted on behalf of United Policyholders, to the California Supreme Court, which alerts the Court to the fundamental infirmities in the “standard” expounded by the insurance industry in COVID-19 business interruption litigations nationwide. The letter was issued to assist the Court in addressing a question certified from the US Court of Appeals for the Ninth Circuit, in Another Planet Entertainment, LLC v. Vigilant Insurance Co, asking whether the actual or potential presence of the COVID-19 virus on an insured’s premises “constitute direct physical loss or damage to property” for purposes of coverage under a commercial property insurance policy.
Continue Reading Hunton Insurance Team Alerts California Supreme Court to “Physical Alteration” Fallacy

Last week, the Ohio Supreme Court ruled in EMOI Services, L.L.C. v. Owners Ins. Co., 2022 WL 17905839 (Ohio, Dec. 27, 2022), that a policyholder did not suffer direct physical loss of or damage to computer media that was encrypted and rendered unusable. The Court reached its ruling even though “media” was defined in the policy to include “computer software,” concluding that software does not have a “physical existence.” The Supreme Court’s decision reverses an Ohio appellate court’s earlier ruling that the cyberattack triggered coverage under a commercial property insurance policy and builds upon plainly distinguishable rulings in COVID-19 business interruption cases, such as Santo’s Italian Café, L.L.C. v. Acuity Ins. Co., 15 F.4th 398, 402 (6th Cir. 2021), where the Sixth Circuit found that government orders issued in response to the COVID-19 pandemic did not physically alter insured property.
Continue Reading Ohio Supreme Court Launches COVID-19 Holdings into Cyberspace; Denies Coverage for Physical Loss or Damage to Computer Software

The Insurance Coverage Law Center has published an article in which Hunton insurance recovery partner, Michael Levine, exposes evidence of insurance company sins unearthed in the COVID-19 business interruption insurance litigation battleground.  The article discusses evidence obtained from four of the largest property and business income insurers, which tends to prove that long before COVID-19, each understood virus and communicable disease to pose a risk of physical loss or damage sufficient to trigger coverage under their respective all-risk insurance products.  A copy of the article is available here, with permission from the Insurance Coverage Law Center.
Continue Reading Michael Levine and Peers Expose Insurers’ COVID-19 Sins

One of the threshold issues in COVID-19 insurance coverage cases that have been brought across the country is whether the policyholder’s allegations meet the applicable pleading standard in alleging that the virus caused physical loss or damage. In many cases, the courts have gotten it wrong, effectively holding policyholders to a higher standard than required. But recently, a California federal judge righted those wrongs by acknowledging the correct pleading standard in that case, which is whether the allegations state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). The Court, here, correctly recognized that the policyholder, the Los Angeles Lakers, met that pleading standard when it alleged that the COVID-19 virus can cause physical loss or damage by physically altering property.
Continue Reading California Court Forces Insurer to Play Ball in COVID-19 Insurance Coverage Suit

The Hunton insurance recovery team recently offered support in a matter of great importance to Maryland policyholders. The case is pending before the Maryland Court of Appeals on a question certified from a Maryland federal court in a COVID-19 business interruption insurance lawsuit brought by clothing manufacturer, Tapestry, Inc. Tapestry, the parent of luxury brands…

Hurricane Ian is rapidly approaching the west coast of Florida and is expected to make landfall as a Category 4 hurricane near the Tampa area within the coming days. While the exact track is still being determined, there is a chance the storm may also impact insureds in Georgia and South Carolina. Now is the…

As reported on this blog, policyholders have long been of the view that the presence of substances like COVID-19 and its causative virus  SARS-CoV-2, which render property dangerous or unfit for normal business operations, should be sufficient to trigger coverage under commercial all-risk insurance, as has been the case for more than 60 years.

However, many courts, federal courts in particular, despite decades of pro-policyholder precedent, have embraced the view that “viruses harm people, not [property].”  Thirty-one months after the start of the pandemic, the first state high court has gone in a different direction, according greater weight to pro-policyholder precedent.…

Continue Reading Vermont Supreme Court Finds COVID-19 May Damage Property

Recently, an Illinois federal judge ruled that where government shutdown orders due to COVID-19 in different states impacted one insured, that insured suffered separate occurrences in each effected state. Dental Experts, LLC v. Massachusetts Bay Ins. Co., No. 20 C 5887, 2022 WL 2528104 (N.D. Ill. July 7, 2022).
Continue Reading COVID-19 Losses and Number of Occurrences

Prior posts in this series have discussed insurance coverage issues that pertain directly to wildfire claims, but we have not yet addressed how one proceeds following a loss.  In this post in the Blog’s Wildfire Insurance Coverage Series, we discuss the preparation, submission and negotiation of the insurance claim.
Continue Reading Wildfire Insurance Coverage Series, Part 7: How to Successfully Prepare, Submit and Negotiate the Claim