NL Industries recently prevailed against its commercial general liability insurers in the New York Appellate Division in a noteworthy case regarding the meaning of “expected or intended” injury and the meaning of “damages” in a liability insurance policy. In Certain Underwriters at Lloyd’s, London v. NL Industries, Inc., No. 2021-00241, 2022 WL 867910 (N.Y. App. Div. Mar. 24, 2022) (“NL Indus. II”), the Appellate Division held that exclusions for expected or intended injury required a finding that NL actually expected or intended the resulting harm; not merely have knowledge of an increased risk of harm. In addition, the court held that the funding of an abatement fund designed to prevent future harm amounted to “damages” in the context of a liability policy because the fund has a compensatory effect. NL Industries II is a reminder to insurers and policyholders alike that coverage is construed liberally and exclusions are construed narrowly towards maximizing coverage. 
Continue Reading New York Court Narrowly Interprets “Expected or Intended Injury” Exclusion in Win for Policyholder

An amended version of the Comprehensive Insurance Disclosure Act recently went into effect in New York State. This law applies to all civil lawsuits filed in New York State Court on or after December 31, 2021. The first disclosures required by the law will be due soon and it is important for defendants to be aware of their new obligations.
Continue Reading New York’s New Insurance Disclosure Law Goes Into Effect

A commentator recently summed up the risk of ransomware attack in 2022: “we’re all screwed.” True enough. But that’s all the more reason to prepare right now. After all, the only thing worse than a ransomware attack is not having adequate insurance coverage when it occurs. The time to prepare is now.
Continue Reading As Ransomware Proliferates, Insurance Can Help

After any merger or acquisition, disputes can arise regarding the accuracy of representations and warranties made by the seller to the buyer. In most transactions today, the buyer obtains representation and warranty insurance to cover the buyer for losses resulting from the seller’s breach of a representation or warranty. When an R&W policy provides coverage, a seller may attempt to offset its obligations to the buyer by amounts paid by the R&W insurer. Likewise, the R&W insurer may attempt offset against the damages paid by the seller to the buyer. But other legal and equitable concepts may prevent them from doing so.

In an article recently published by the Insurance Coverage Law Center, my colleagues Syed Ahmad, Patrick McDermott, and Adriana Perez explore whether such offsets are available to sellers and R&W insurers.
Continue Reading Representation and Warranty Insurance and the Collateral Source Rule

The Indiana Supreme Court recently reversed a trial court’s finding and an affirming intermediate appellate court opinion regarding the interpretation of a policy providing coverage for cyber-crime. In G&G Oil Co. of Indiana, Inc. v. Continental Western Insurance Co., the state high court rejected the lower courts’ narrow interpretation of coverage and impractical view on causation. A copy of the decision can be found here.

Continue Reading Indiana Supreme Court Decrypts Computer Crime Coverage

Hunton insurance attorneys Syed Ahmad, Geoffrey Fehling, and Kevin Small commented on a retailer’s insurance dispute related to COVID-19 in the latest edition of the Recall Roundup, posted on the Hunton Retail Law Resource Blog.

In a setback for retail-policyholders hoping to enforce coverage for losses due to COVID-19 in federal court, a Tennessee district court recently knocked out a complaint filed by a sprawling Nashville establishment seeking coverage under a food contamination provision in its property policy. The court’s opinion dismissing Nashville Underground LLC v. AMCO Insurance Co. is noteworthy due to the great lengths taken to define a policy provision—intended to provide broad coverage for disruption of business due to the suspicion of food contamination—in a way that limits coverage contrary to the reasonable expectations of businesses purchasing policies specifically tailored to protect against actual or suspected contamination.

Continue Reading Tennessee Federal Court Dismisses Recent Food Contamination-Related Insurance Coverage Dispute Tied to the Ongoing COVID-19 Pandemic

Louisiana joins a growing list of states, including New Jersey, Massachusetts, Ohio, and New York that are considering legislation, here and here,  that would require insurance coverage for the business interruption losses caused by COVID-19.  We have discussed other legislative efforts here and here.  The Louisiana House and Senate have each put forth

Following New Jersey, where similar legislation remains under informal discussion, lawmakers in Ohio, Massachusetts, and New York have now introduced legislation that would provide relief to small businesses for COVID-19 business interruption losses.  The legislation is conceptually identical to the legislation introduced in New Jersey, discussed here last week.  Although the New Jersey bill was

Last week, we reported that the New Jersey General Assembly passed a bill that would force property insurers to cover certain business interruption losses arising from COVID-19.  The bill presented a lifeline to small businesses in New Jersey that are being racked by the economic fallout stemming from COVID-19.  Before reaching the New Jersey

On March 16, 2020, the New Jersey General Assembly passed a bill that would force property insurers to cover business interruption losses arising from the COVID-19 virus sustained by small businesses (less than 100 employees working more than 25 hours a week); a copy of the bill can be found here.  Significantly, the bill would force coverage even where the insurer believes its policy should not apply.  In particular, the bill provides that property policies in effect as of March 9, 2020, will be construed as providing “coverage for business interruption due to global virus transmission or pandemic,” including COVID-19.  As written, the law would defeat any attempt by insurers to rely on exclusions that purport to preclude coverage for business income loss resulting from viruses, including the much-touted ISO CP 01 40 07 06 Virus or Bacteria Exclusion that insurer-side advocates have been championing as a purported bar to COVID-19 losses.  The bill would provide much-needed relief to the New Jersey policyholders that are enduring the worst of COVID-19’s economic impact with the least ability to withstand it.

Continue Reading The New Jersey General Assembly Passes Bill Ensuring Business Income Coverage for COVID-19 Losses