In HDI Global Specialty SE v. PF Holdings LLC, the Eleventh Circuit recently affirmed a district court ruling that the insurers of two apartment management companies did not have to cover a $54 million arbitration award against the companies for their alleged mismanagement of government-subsidized apartments. The Eleventh Circuit held that management companies’ failure to cooperate breached general liability insurance policies issued by the insurers.Continue Reading Reminder to Policyholders: Cooperate and Consent!

A federal court recently denied an insurer’s motion to dismiss an insured’s claim for declaratory relief. The insurer argued that the policyholder’s declaratory judgment claim was redundant of its breach of contract claim. The Court ruled that “redundancy is not grounds for dismissal under Rule 12(b)(6).”

In The United Church of Marco Island, Inc. v. Lexington Insurance Company , the policyholder, The United Church of Marco Island, Inc., fell victim to a $1.2 million fraud after a series of emails impersonating church officials and a Registered Financial Advisor who had a relationship with the Church resulted in the Church sending funds to an “illicit bank account.” The Church was able to recover $600,000 and sought coverage under its Commercial Crime Policy issued by Lexington Insurance Company for the remaining $600,000.

Continue Reading Insurer Can’t Dismiss Church’s Claim for Declaratory Relief

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

On Monday, March 6, the US Supreme Court agreed to hear an insurance coverage dispute, Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC.  Insurance cases are few and far between in the high court, so both policyholders and their insurers will be watching the Great Lakes case with great interest.  Notably, while the case involves the specialized area of maritime law, how the Supreme Court chooses to address the choice-of-law issue it presents could have much broader implications.
Continue Reading Supreme Court Takes on Insurance Dispute

As we have discussed in prior parts of this series, the insurance industry has developed an array of policies specifically tailored to cover cryptocurrency claims, and some of these policies may also cover certain NFT claims. Separate and apart from these tailored policies, policyholders with NFT claims also may look to traditional forms of insurance. 

NFTs are collectible and one of a kind, yet digital. The most common NFT is a type of visual art image like a digital painting, a photograph or generative designs (created by artificial intelligence). However, this high-level definition doesn’t do justice to just how pervasive these have become. In addition to traditional artwork, there are:Continue Reading Digital Asset Insurance Coverage Series, Part 7: Insurance for NFTs

Several of the largest brokers have developed a considerable bench. For example, Marsh has a Digital Asset Risk Team (DART);[1] Lockton has its Lockton Emerging Asset Protection Team (LEAP)[2] and Aon and others have their own teams.[3]

There are multiple advantages to procuring cryptocurrency insurance through brokers that have deep experience in this particular area of insurance. These may include:Continue Reading Digital Asset Insurance Coverage Series, Part 6: Brokers And Cryptocurrency Insurance

Last week’s discussion focused on the evolution of the insurance marketplace for digital assets. This section focuses on the marketplace as it now exists, providing examples of products being bought by companies and consumers facing cryptocurrency risks. 
Continue Reading Digital Asset Insurance Coverage Series, Part 5: How Companies And Consumers With Cryptocurrency Risk Approach Insurance

In the 18th Century, underwriting desks at what came to be known as Lloyd’s of London were developed to share or transfer risks associated with shipping. Availability of risk sharing, or insurance, provided protection for maritime investors and facilitated increased levels of investment and thus increased levels of maritime activity. Risk transfer has become an essential part of the development of a marketplace for many products.
In the early years of cryptocurrency, there were no insurance products specifically designed to cover cryptocurrency-related losses. Much like the presence of insurance fosters development of a marketplace, the absence of insurance hinders it.
Continue Reading Digital Asset Insurance Coverage Series, Part 4: History Of Insurance Coverage Specifically Designed For Cryptocurrency

In the early years of cryptocurrency, there were no crypto-specific insurance coverages. Instead, policyholders sustaining losses were left to try to access coverage under traditional insurance policies such as:
Continue Reading Digital Asset Insurance Coverage Series, Part 3: How Traditional Insurance Products Can Help Protect Policyholders From Loss And Liability Related To Digital Assets