In a recent Law360 expert analysis, titled “Considering Disclosure Risks In Sensitive Product Recalls,” Hunton Andrews Kurth insurance lawyers Syed S. Ahmad and Geoffrey B. Fehling discuss the disclosure risks companies face in pursuing insurance coverage for losses arising from product recalls that involve potentially sensitive communications with the Food and Drug Administration

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.

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In a recent Client Alert, Hunton & Williams insurance attorneys Lorelie Masters, Michael Levine, and Geoffrey Fehling discuss the importance of reviewing historical liability insurance policies and the potential benefit these policies can have on minimizing exposure to environmental hazards. In Cooper Industries, LLC v. Employers Insurance of Wausau, et al., No. L-9284-11 (N.J. Super. Ct. Law Div. Oct. 16, 2017), a New Jersey trial court held that an electrical products manufacturer was entitled to coverage rights under commercial general liability policies issued to a predecessor company for environmental remediation costs stemming from a U.S. Environmental Protection Agency cleanup of a 17-mile stretch of the Passaic River in New Jersey.

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The Eleventh Circuit confirmed in First Mercury Insurance Company v. Excellent Computing Distributors, Inc., No. 15-10120 (11th Cir. Apr. 20, 2016), that policyholders need not await adjudication of underlying liability litigation before obtaining a confirmation of coverage. The decision arose from a declaratory judgment action concerning the availability of insurance coverage for an underlying negligence suit against the policyholder. The district court dismissed the declaratory judgment action, finding it “inappropriate to exercise jurisdiction over an action seeking a declaration of the plaintiff’s indemnity obligations absent a determination of the insureds’ liability.” The court also noted that “significant factual questions necessary for a resolution of [the] declaratory judgment action are at issue in the state [court] action, and have yet to be resolved.” But the court did not identify the factual questions.

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