Representations and warranties coverage disputes are far more often resolved through informal or confidential proceedings rather than litigation. Law 360 recently published an article by Hunton insurance counsel Syed Ahmad, Patrick McDermott, and Jae Lynn Huckaba analyzing a rare representations and warranties dispute in the summary judgment stage of litigation between pH Beauty Holdings III Inc. and its representation and warranties insurers. As summarized below, the authors provide an overview of the issues in dispute, which related to the RWI retention, an exclusion related to the purchase price adjustment following closing, and pH Beauty’s bad faith claim.Continue Reading Potential RWI Coverage Disputes Highlighted By Massachusetts Litigation
The Supreme Court of New Jersey recently agreed to hear ACE American Insurance Company’s appeal of an Appellate Division decision finding that a war exclusion in a property insurance policy did not preclude coverage for Merck & Co., Inc.’s claim stemming from a 2017 cyberattack. We previously reported about this case here. Continue Reading Supreme Court of New Jersey to Hear Merck Cyberattack Case
The Superior Court of New Jersey Appellate Division recently upheld a lower court’s finding that the war exclusion in a property insurance policy did not preclude coverage for Merck’s claim stemming from a 2017 cyberattack. The decision is appropriately being heralded as a huge win for policyholders and an affirmance of New Jersey’s longstanding history of protecting policyholders’ reasonable expectations. We previously blogged about developments relating to the war exclusion and the Merck case when it was initially heard by the Appellate Division. …
Continue Reading Merck Wins Again in Cyber Coverage Battle
Artificial intelligence technology (“AI”) is poised to radically improve human functionality, although some say the technology is quietly learning how to overtake it. In the meantime, the insurance industry has been using AI to save time, attain consistency and improve risk mitigation. However, while the industry looks forward to cost savings and better business utilizing generative AI, some insurers have simultaneously cautioned policyholders about the potential risks that reliance on AI may pose. Insurer’s cautionary statements cast doubt on the integrity of their own reliance on the technology.Continue Reading Insurance Industry Highlights Inconsistent Reliance on AI
The explosive growth of representations and warranties (R&W) insurance over the last decade is no secret. But, for many, R&W insurance remains an enigma, particularly as respects filing a claim under such policies. Indeed, even those involved in buying R&W insurance may not have experience on the claims end and, as a result, possess little…
The Fourth Circuit recently held that a “literal” interpretation of a North Carolina insurance law was “poppycock.” Whitmire v. S. Farm Bureau Life Ins. Co., No. 21-1643 (4th Cir. 2022). The case involved a North Carolina statute that required an insurer to provide notice by mail addressed to the insured’s “last known post-office address in this State.” The person that was to receive notice under the statute had lived in North Carolina but then moved to South Carolina. The insurer provided notice at the person’s South Carolina address. It did not provide notice at the person’s last known address in North Carolina. So the beneficiary of the life insurance argued that notice did not meet the North Carolina statute because it was not provided at “last known post-office address in this State,” i.e. North Carolina.
Continue Reading Court: “Literal” Reading Of Insurance Statute Is “Poppycock”
In Yahoo, Inc. v. National Union Fire Insurance Co. of Pittsburgh, PA., the California Supreme Court confirmed that contra proferentem and other rules of policy interpretation apply even to language insurers argue is “manuscript” as long as the provisions in question use standard-form policy terms. There, the United States Court of Appeals for the Ninth Circuit asked the California Supreme Court to answer a certified question regarding whether a commercial general liability policy (CGL) covers defense costs related to claims under the Telephone Consumer Protection Act of 1991 (TCPA) (47 U.S.C. § 227). Following a thorough and thoughtful assessment of California law involving fundamental rules of policy interpretation, the California Supreme Court ruled in favor of the policyholder, Yahoo, Inc. (“Yahoo!”). The authors of this article represented amicus curiae, United Policyholders, in support of Yahoo! before the California Supreme Court. Continue Reading Unanimous California Supreme Court Affirms Breadth of Policy-Interpretation Rules in Confirming That CGL Policies Cover TCPA Liabilities
Harvard College and Zurich American Insurance Company have been embroiled in an insurance coverage dispute for over a year regarding Zurich’s obligation to cover Harvard’s hefty defense bills incurred defending its affirmative action admissions policy, which is presently before the U.S. Supreme Court. Last week, the world-renowned university told a District of Massachusetts court that it should deny Zurich’s motion for summary judgment because questions of fact remain unresolved. Harvard also accused Zurich of inappropriate discovery gamesmanship by withholding documents and information. …
Continue Reading Harvard Declares Class is in Session: Tells Court Zurich’s Motion for Summary Judgment Must Be Denied and Accuses Zurich of Playing Games
A Texas jury has found that the presence of SARS-CoV-2 virus on the property of Baylor College of Medicine (BCM) caused “physical loss or damage” and resulting economic loss, triggering coverage under BCM’s commercial property insurance program. The jury awarded BCM over $48 million following a three-day trial; the award consisted of $42.8 million in business interruption, $3.3 million in extra expense, and $2.3 million in damage to research projects.
Continue Reading Texas Jury Finds Presence of SARS-CoV-2 Virus Causes “Physical Loss or Damage” to Property, Awards Over $48 Million to Baylor College of Medicine
Hunton Andrews Kurth LLP partner Syed Ahmad was quoted on July 20 in a Law360 article titled “R&W Insurance Claim Frequency Expected To Normalize.” The article discussed the recent reduction in R&W claims and industry experts’ expectations that claim frequency will return to normal levels this year. Mr. Ahmad commented on the challenges…