A New York Federal judge recently ordered a directors and officers liability insurer to pay $4.5 million that an investment firm had spent defending an arbitration proceeding brought by a former executive. The court found that allegations of constructive termination and related retaliation triggered an exception to the D&O policy’s insured-versus-insured exclusion for employment-related wrongful acts, rejecting the insurer’s argument that, notwithstanding the former executive’s count for constructive termination, his status as an “Insured Person” triggered the exclusion where the majority of counts in the arbitration related to alleged breaches of the firm’s operating agreement.  
Continue Reading Recent Policyholder Win Highlights Exception to the Insured v. Insured Exclusion in D&O Policies

A recent settlement filed by the Federal Trade Commission (FTC) and GoodRx may merit a review of your cyber insurance coverages. Earlier this month, the FTC took enforcement action for the first time under its Health Breach Notification Rule against the telehealth and prescription drug provider, GoodRx, for failing to notify consumers of its unauthorized disclosures of personal health information.

As detailed in a February 27 Hunton client alert, the Health Breach Notification Rule generally requires that vendors not covered by the Health Insurance Portability and Accountability Act (HIPAA) of personal health records give notice in the event of a “breach of security,” which is defined to include “unauthorized acquisition” of personal health records.
Continue Reading Recent FTC Enforcement Action Merits Cyber Insurance Coverage Review

If your company has an emergency response plan—and it likely does—filing an insurance claim needs to be included in that plan. But what if your insurer stretches out the consideration process by making continuous, costly information requests without making a coverage determination? Or decides to deny coverage under one clause of the policy, but accept coverage under another? Or outright denies coverage? Policyholders should be prepared to comply with policy obligations (which may vary depending on the controlling state law), such as the sharing of relevant information and documentation or participating in arbitration or a mediation prior to suing the insurer, but also understand the responsibilities insurers have to policyholders when a claim is tendered.
Continue Reading It’s Not You, It’s Them: Dealing With Insurance Coverage Denials