Last week, a Georgia federal jury popped a motor carrier liability insurer and its insured with a $21 million verdict in a wrongful death suit. According to the Complaint, the insured driver lost control of his tractor-trailer while driving on Georgia Highway 369. As a result, the trailer disconnected and overturned, injuring a pedestrian walking along the highway’s shoulder. The pedestrian eventually succumbed to his injuries, and his estate filed suit against the driver and the driver’s insurer under Georgia’s Direct Action Statute, which allows plaintiffs to name motor carrier insurers as defendants along with their insureds.

Continue Reading Georgia Jury Awards $21M against Trucking Insurer and its Insured in Pedestrian Death

In Dunn, et al. v. Columbia National Insurance Company, No. 2:17-cv-0246 (N.D. Ga.), an insurance company refused to defend an insured in a personal injury claim contending that the insured failed to cooperate in the defense. The underlying claim stemmed from an automobile accident, where an employee of Lawson Air Conditioning and Plumbing, Inc. (“Lawson”), Ronald Patterson, struck members of the Dunn family with a pickup truck owned by Lawson as the family was walking out of a Walmart store. The Dunn family members suffered bodily injury as a proximate result of the accident.  Patterson admitted fault.

Continue Reading Insurer Cannot Invoke Duty to Cooperate as Affirmative Defense After Denying Coverage

Energy industry: is your insurance sufficient to handle a major cyber event? Larry Bracken, Mike Levine, and I address this question and more in our recent article for Electric Light & Power, found here.  In the article, we identify three major gaps in cyber insurance that we routinely see when analyzing coverage for energy industry clients. The first major gap is coverage for bodily injury or property damage caused by a cyber event. Most cyber insurance policies exclude coverage for both bodily injury and property damage, even if caused by a cyber event. Meanwhile, many commercial general liability insurance policies now exclude cyber-related risks, thus creating a gap in coverage for these losses. The second gap we identify is coverage for fines and penalties, including those issued under the European Union’s General Data Protection Regulation (GDPR). Even where cyber insurance policies expressly purport to cover fines and penalties, it is unclear if these may be deemed uninsurable as a matter of public policy in certain jurisdictions. Finally, we identify a gap in coverage for business income losses when the insured’s network, or that of a vendor on which they rely, goes down. That coverage is a key component of a robust cyber program, but one that is typically only offered for an additional premium.

Continue Reading Hunton Insurance Lawyers Discuss Cyber Risks to the Energy Grid in Electric Light & Power

The U.S. District Court of Appeals for the First Circuit recently held that Zurich American Insurance Company was obligated to defend Electricity Maine, LLC in a class action lawsuit brought by its customers.  The case stems from alleged misconduct by Electricity Maine that resulted in customers receiving higher bills than were previously represented.  Plaintiffs Jennifer Chon and Katherine Veilleux sought to represent a class of approximately 200,000 customers seeking damages totaling approximately $35 million.  Specifically, the complaint asserted claims for negligence, negligent misrepresentation, violations under the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18. U.S.C. §§ 1962, 1964, and the Maine Unfair Trade Practices Act.

Continue Reading First Circuit Court of Appeals Holds That Insurer Must Defend Electricity Company Against Class Action Lawsuit

A recent outbreak of Legionnaires’ Disease has been traced to a Sheraton hotel in Atlanta, Georgia.  According to the Georgia Department of Public Health, 11 cases are confirmed and 55 more cases are “probable.”  The Atlanta Sheraton closed on July 15 to investigate the outbreak.  The closure is certain to result in a substantial immediate loss of revenue for the property.  The closure and loss of advanced reservations also will likely result in an extended interruption of hotel revenue.  Add to that potential stigma-related losses that will result from those afraid to reenter the property after the hotel reopens.  Sheraton will likely turn to its insurers to seek payment for its business interruption costs.

Continue Reading Legionnaires’ Outbreak Raises Significant Insurance Issues

The Georgia Court of Appeals recently affirmed a grant of summary judgment in favor of Mountain Express Oil Company on its breach of contract claim against liability insurer, Southern Trust Insurance Company.  Empire Petroleum brought claims against Mountain Express for breach of contract, injunctive relief, and libel or slander, among others.  Mountain Express sought a defense to that lawsuit under its insurance policy with Southern Trust.  Southern Trust contended that the insurance policy did not cover Empire’s non-libel/slander claims, and therefore reimbursed Mountain Express for only a portion of its attorneys’ fees. After the Empire lawsuit settled, Mountain Express sued Southern Trust for breach of contract and bad faith for failing to pay the remaining defense costs, contending that Southern Trust had a duty to defend the entire lawsuit.

Continue Reading Georgia Court of Appeals Holds That Insurer Must Defend Oil Company Against Entire Lawsuit

A state-appointed panel advised last week that California should change the standard for determining whether utilities are liable for wildfires.  Under the current system, California’s Public Utilities Code § 2106 provides a private right of action by any person or entity that has suffered loss, damages, or injury caused by prohibited or unlawful acts of a public utility.  Relying on this statute, property owners have asserted wildfire-related claims directly against allegedly culpable electric utility companies.  Public utilities in California also face inverse condemnation claims arising out of wildfires.  Under inverse condemnation, where private property is taken for public use and later damaged by the state or its agency, the state or agency is strictly liable to the property owner.

Continue Reading California Commission Recommends Switching To Fault-Based Wildfire Liability Standard for Public Utilities

Upper Deck Co. has sued its general liability insurer, Liberty Mutual Fire Insurance Co., in California federal court last week, alleging that Liberty Mutual failed to satisfy its defense obligations in an antitrust lawsuit brought against Upper Deck by rival trading card maker Leaf Trading Cards LLC. According to the complaint, Liberty Mutual agreed that the allegations in Leaf’s suit triggered coverage under Upper Deck’s policy and acknowledged its duty to defend and Upper Deck’s right to independent counsel. However, Liberty Mutual stopped paying the defense fees of one of the firms Upper Deck hired, and also failed to pay the fees of a different firm.

Continue Reading Another Liability Insurer Is Sued For Failure To Pay Defense Costs After Acknowledging Its Duty To Defend

On Wednesday, the Fifth Circuit found that Lloyd’s syndicates may not subrogate against an additional insured and may not force that additional insured to arbitration. Lloyd’s Syndicate 457 v. FloaTEC, LLC, No. 17-20550 (5th Cir. Apr. 17, 2019).

Continue Reading Fifth Circuit Twice-Addresses Impact of Master Services Agreement on Subrogation and Arbitrability Issues