On November 10, 2020, a New York federal judge dismissed an insurer’s counterclaims seeking to cap its exposure under a $15 million sublimit and an order estopping the policyholder from pursuing any additional amounts.

Continue Reading Federal Judge Refuses to Limit Coverage and Moves Forward with Policyholder’s Claims Against Insurer and Broker

In American Reliable Insurance Company v. Lancaster, the Georgia Court of Appeals reversed the denial of a property insurer’s summary judgment motion concerning the insurer’s denial of a fire loss claim.  The basis of the denial was that the policyholders had failed to pay the policy premium.  The policyholders, Charlie and Wanda Lancaster, claimed that they had paid their policy premiums for several years to their insurance agent, Macie Yawn.  In October 2014, American Reliable mailed a renewal notice to the Lancasters notifying them that premium payments had to be made directly to the insurer.  After it did not receive payment from the Lancasters, American Reliable sent them a cancellation notice in December 2014, again notifying them that payments be made directly to the insurer.  The Lancasters denied having received either notice from American Reliable, but the record included a receipt for certificate of mailing.

Continue Reading Georgia Court of Appeals Upholds Denial of Coverage Because Insurance Broker Lacked Agency to Accept Premium Payment

As we explained in our earlier post, in a decision that could influence how policyholders and insurers around the world address business-interruption coverage for COVID-19 losses, the London High Court recently handed down its much-anticipated judgment in the Financial Conduct Authority’s “Test Case,” The Financial Conduct Authority (FCA) v. Arch et al.  Because the judgment provided that coverage was available for COVID-19 business-interruption losses under most of the policy wordings at issue, it was highly anticipated that the insurance companies at issue would challenge the judgment in a fast-tracked “leapfrog” appeal to the Supreme Court of the U.K., expected to be heard by the end of the year.  Yesterday, however, six of the insurance companies subject to the judgment decided not to pursue an appeal in connection with some of the policies, and one of the insurers stated that it would instead begin to make payments where appropriate.

Continue Reading Insurance Companies Drop Appeal Against the London High Court’s Ruling in the FCA’s “Test-Case”

In a decision that will influence how policyholders and insurers around the world address business-interruption coverage for COVID-19 losses, the English High Court recently handed down its much-anticipated judgment in the “Test Case,” The Financial Conduct Authority (FCA) v. Arch et al. The High Court’s comprehensive analysis will likely serve as an additional tool in policyholders’ arsenal in the ongoing battles over COVID-19 coverage.

Continue Reading English High Court Finds That Business-Interruption Insurance Can Cover COVID-19 Losses

On Tuesday, the English High Court will issue its much-anticipated ruling in “test cases” for coverage of business-interruption losses during the COVID-19 pandemic under sample policy wordings. Irrespective of the outcome, the London court’s ruling promises to be a significant development for the insurance markets in the UK, as billions of pounds in potential insurance claims are at stake and––beyond this––policyholders and/or insurance companies can be expected to argue that one or another of the findings supports their position(s) for interpreting similar policy language in future COVID-19 business-interruption coverage cases.

The FCA Test Case

In the first action of its kind since the agency was established in 2013, the British markets regulator, the Financial Conduct Authority (FCA), engineered the test case process earlier this year to seek legal clarity over insurance companies’ obligations to cover business-interruption claims in the context of the ongoing COVID-19 pandemic. Brought before the English High Court (a trial level court in the UK), the FCA test case involves around 370,000 policyholders and eight insurance companies. The case was heard by Judge Christopher Butcher, who sits in the Commercial Court, and Judge Julian Flaux from the Court of Appeal.  Experienced English counsel prepared and presented arguments to the tribunal for expedited consideration and resolution. The FCA hired a solicitor firm, which instructed well-regarded barristers from Devereux Chambers and Fountain Court Chambers; the insurers engaged their own solicitors and barristers.


Continue Reading Policyholders and Insurers Await Highly Anticipated English High Court Ruling Regarding Coverage for COVID-19 Business-Interruption Losses

Walmart announced this week that it is testing a pilot program in North Carolina for the delivery of groceries and household items using automated drones, joining other retailers looking to beef up their drone delivery business.  In a related development, last week the Federal Aviation Administration (FAA) designated Amazon Prime Air as an “air carrier,” a key step in the process of Amazon’s quest to expand into the delivery-by-drone arena.  Amazon joins Wing, the Alphabet Inc. subsidiary, and UPS as companies that have obtained FAA approval to operate unmanned aircraft systems (i.e., drones) under the federal regulations.  Given the rapid rise of commercial drone use, businesses have understandably grown concerned that their drone technologies will expose them to a new set of risks, including damage to the drone itself, as well as third-party claims following property or physical injury caused by a company-operated or company-owned drone (and other third-party claims like invasion of privacy).  In light of these risks, it is key that businesses using drones obtain the insurance coverage necessary to protect themselves against such risks, and that they explore all coverage options should a drone-related loss arise in order to maximize their chances of insurance recovery.

Continue Reading As Amazon’s and Walmart’s Drones Take to the Skies, it is Important for Commercial Policyholders to Have a Strategy to Protect Against Drone-Related Risks and to Maximize their Recovery in the Event of a Loss

On August 13, 2020, the United States District Court for the Western District of Texas granted State Farm Lloyds’ (“State Farm”) motion to dismiss a claim for loss of income resulting from multiple executive orders requiring closure of non-essential businesses in Bexar County, Texas following the COVID-19 pandemic.[1] In doing so, the court admitted that courts across many jurisdictions have found “physical loss” in the absence of tangible destruction to a covered property. However, the court glossed over such analogous cases involving disease-causing agents such as E. coli, ammonia, and asbestos, where those courts found the existence of physical loss.

Continue Reading Texas Federal Court’s Denial of Barber Shops’ COVID-19 Claims Lacks Body and Style

Over the past couple of months, we have written on decisions by various European insurers to pay policyholders for their COVID-19 related losses. That positive trend is now moving across continents.

Continue Reading South African Insurers Agree to Pay for COVID-19 Losses

Last month we wrote a piece concerning AXA’s agreement to pay COVID-19 related business interruption claims by a group of restaurants in France after a court ruled that the restaurants’ revenue losses resulting from COVID-19 and related government orders were covered under its insurance policies. AXA reportedly has already agreed to pay over 200 COVID-19 related claims.

Continue Reading Will European Insurers’ Positive Response to COVID-19 Claims Influence US Insurers?