As has been widely reported, insurance companies have been inundated with claims arising from the novel coronavirus and are locked into contentious coverage battles regarding the scope of coverage afforded for such claims under various policy forms. Courts have begun issuing decisions both for and against policyholders attempting recovery for COVID-19-related losses, and the legal battles resolving those questions will likely take months or even years to play out.

Continue Reading Insurers Raise D&O Premiums, Restrict Coverage, and Reportedly Leverage Pandemic to Boost Long-Term Profitability

A New York appeals court recently granted partial summary judgment in favor of the insureds, finding that excess directors and officers insurers, Westchester Fire Insurance Co., Aspen American Insurance Co. and RSUI Indemnity Co., must advance the defense costs for former executives of the insured entity. The decision is the most recent victory for policyholders in connection with D&O insurance claims asserted in the wake of alleged securities violations and accounting fraud at related real estate investment firms, which have resulted in millions of insurance recoveries for the company and its officers and directors (as previously reported here and here).

Continue Reading New York Appellate Court Confirms Insurers Must Advance Defense Costs Under D&O Policies

A hotel operator defeated an insurer’s motion to dismiss its suit alleging that the insurer wrongfully denied coverage and acted in bad faith by denying the hotel’s $1.9 million claim arising from an employee’s fraudulent scheme diverting commissions to fictitious travel agencies. The court held that the hotel operator had suffered an “insurable loss” and rejected the insurer’s argument that the claim was barred under the policy’s suit limitations provision.

Continue Reading Court Rejects Insurer’s Attempt to Dismiss Hotel’s $1.9 Million Crime Losses

A group of Las Vegas-based restaurants recently filed a class action lawsuit to recover business interruption damages against their insurer. The Egg Works chain alleged that U.S. Specialty wrongly denied their claims for financial losses stemming from the Nevada governor’s closure of non-essential businesses during the COVID-19 pandemic. The governor’s orders limited the restaurants to takeout and delivery service only.

Continue Reading Restaurant Chain Seeks to Recover COVID-19 Losses Under Food Contamination Theory

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.

Continue Reading Professional Liability Insurer Breached Policy by Refusing to Defend False Claims Act Lawsuit

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.

Continue Reading Fourth Circuit Affirms Ruling That Insurer Must Pay Millions For Breaching Duty to Defend

Effective April 1, 2020, Hunton Andrews Kurth LLP has promoted insurance recovery lawyer, Sergio F. Oehninger, and twelve other attorneys, to partner.  The promotion is a much deserved and hard-earned reward for Oehninger, who is a core member of the Firm’s insurance recovery practice.  Hunton insurance recovery practice head, Walter Andrews, praised Oehninger’s

In a prior post, we predicted that novel coronavirus (COVID-19) risks could implicate D&O and similar management liability coverage arising from so-called “event-driven” litigation, a new kind of securities class action that relies on specific adverse events, rather than fraudulent financial disclosures or accounting issues, as the catalyst for targeting both companies and their directors and officers for the resulting drop in stock price. It appears that ship has sailed, so to speak, as Kevin LaCroix at D&O Diary reported over the weekend that a plaintiff shareholder had filed a securities class action lawsuit against Norwegian Cruise Line Holdings, Ltd. alleging that the company employed misleading sales tactics related to the outbreak.

Continue Reading All Aboard! COVID-19 Securities Suit Sets Sail, Implicates D&O Insurance

The CDC reports that, as of the end of last week, the coronavirus disease had spread through China and to 31 other countries and territories, including the United States, which has now seen its first two related deaths. The public health response in the United States has been swift and includes travel advisories, heightened airport screening, and repatriation and quarantine of potentially infected individuals. Outside the United States, countries like China, Italy, and South Korea have implemented more severe measures to combat the disease. From smart phones to automobiles, coronavirus has major short- and long-term implications for public and private companies facing potentially significant supply chain disruptions, store and office closures, and other logistical issues. These business losses, however, may be covered by insurance. Below are several key insurance considerations for policyholders to contemplate when evaluating the availability of insurance coverage for coronavirus-driven losses.

Continue Reading Three Key Insurance Issues to Consider In Securing Coverage for Coronavirus Losses

A New York appellate court recently held that renewable bio-diesel fuel manufacturer BioEnergy Development Group LLC may pursue tens of millions of dollars in damages from its insurers under two all-risk insurance policies, including amounts in excess of the policy limits, where the insurers refused to pay claims in a timely manner.

Continue Reading New York Appellate Court Holds Insurers May Suffer Consequences of Delayed Payment of Energy Company Property and Business Interruption Claims