Harvard’s years-long battle with Zurich Insurance Company has finally ended. As our colleagues wrote in October 2022, Harvard already learned its lesson once when a court ruled that Zurich did not have coverage obligations after the university failed to provide timely notice of a lawsuit under its claims-made-and-reported insurance policy. Earlier this week, the First Circuit provided Harvard with a new volume explaining why it—and policyholders generally—should provide timely notice of claims to their insurers. The First Circuit’s decision in President & Fellows of Harvard Coll. v. Zurich Am. Ins. Co., No. 22-1938, 2023 WL 5089317 (1st Cir. Aug. 9, 2023) is but the latest high-profile reminder about the importance of adhering to notice requirements, including with respect to excess insurers, in claims-made-and-reported insurance policies.Continue Reading Harvard Receives a Thicker Text on the Importance of Timely Notice
While Harvard prepares to defend its admissions policies to the Supreme Court, one of its insurers continues to argue that a technicality prevents Harvard from recovering $15 million to defray its defense costs under its insurance policies.
Last month, we discussed an insurance coverage dispute between Harvard College and Zurich American Insurance Company. The dispute arises from Zurich’s refusal to cover a 2014 lawsuit that an affirmative-action group filed against Harvard, alleging that the university’s admissions policies violated Title VI of the Civil Rights Act. Since the affirmative action suit was filed, Harvard has been defending its admissions policies through the trial and appellate court systems, an effort that has cost the university more than $25 million.Continue Reading Harvard Learns Lesson About Timely Notice
A New Mexico court recently granted judgment on the pleadings against an insurer and found coverage, reminding the insurer that different words in a policy, indeed, have different meanings.
In Power of Grace, LLC v. Weatherby, Power of Grace, a policyholder, sued its insurer, Hudson Insurance Companies, and its insurance agent, Weatherby-Eisenrich Inc. Power of Grace alleged that Weatherby and Hudson were liable for damages it might incur in an underlying wrongful death lawsuit arising from a tractor-trailer accident. …
Continue Reading Tomato-Tomato? – New Mexico Court Offers Insurer a $5 Million Reminder that Different Words Have Different Meanings
The First Circuit recently held that a “Special Hazard and Fluids Limitation Endorsement” was ambiguous and therefore there was excess coverage for a fuel spill that occurred after a tanker-truck overturned.
In Performance Trans. Inc. v. General Star Indem. Co., the First Circuit reversed the District Court’s grant of summary judgment in favor of General Star Indemnity Company. The District Court held that the excess policy General Star issued to Performance Trans. Inc. precluded coverage for a spill that resulted in the leaking of thousands of gallons of fuel. The District Court relied on the existence of a total pollution exclusion to bar coverage and held that the policy’s Special Hazards and Fluids Limitation Endorsement could not create an ambiguity that would afford coverage.
Continue Reading First Circuit Rules Excess Insurer Must Provide Coverage for Fuel Spill
As crypto-asset losses continue to rise, the industry is taking steps to protect clients and investors through insurance. Crypto-exchange and custody provider, Gemini Trust Company, LLC (“Gemini”), recently launched its own captive insurance provider, Nakamoto, Ltd. Captive insurance is an alternative to self-insurance whereby a company creates a licensed insurance company to provide coverage for itself. According to a statement from Gemini, Nakamoto is “the world’s first captive to insure crypto custody” and allows Gemini “to increase its insurance capacity beyond the coverage currently available in the commercial insurance market” for cryptocurrency wallets not connected to the internet, commonly referred to as “cold storage.” According to Gemini, this move makes Nakamoto the world’s most insured crypto-asset cold storage solution, which signals an expectation of increased demand in the crypto market.
Continue Reading Captive Insurance Offers Protection to Growing Crypto-Currency Industry
Real estate investment trust VERIET, Inc. (formerly known as American Realty Capital Properties) announced this week that it agreed to a $765.5 million settlement to resolve shareholder class action and related lawsuits arising from a host of alleged securities violations and accounting fraud at ARCP since the company went public in 2011. Defendants in the class action settlement have agreed to pay more than $1 billion in compensation, including millions from ARCP’s former manager and principals, chief financial officer, and former auditor.
Continue Reading Newest REIT Settlement and Ongoing Disputes Pose Potential D&O Coverage Issues
The Delaware Superior Court ruled that insurers could not rely on Written Consent and Cooperation clauses in directors and officers liability insurance policies to avoid coverage for settlements by Dole Food Company, Inc. (“Dole”) in shareholder disputes involving fraud in a go-private transaction.
Continue Reading Court Rejects Insurers’ Argument that Insureds Breached D&O Insurance Policies by Failing to Cooperate and Settling Lawsuits for $222 Million Without Consent
The Texas Supreme Court has reversed a lower appellate court decision and found that insurers of Anadarko Petroleum Corp. cannot use their own policy wording to avoid coverage for more than $100 million of Anadarko’s defense costs stemming from the 2010 Deepwater Horizon disaster. Law360 interviewed Hunton’s Sergio F. Oehninger about the substantial impact the decision will have for policyholders in Texas and elsewhere. Oehninger explained how the decision corrects fundamental errors by the lower court in the construction of insurance policies and how it illustrates the proper way to construe words chosen by the insurer that operate to limit or preclude coverage. In the Anadarko matter, the London market policy contained a “joint venture” provision that capped joint venture liabilities at $37.5 million. The insures applied the cap after paying that amount to Anadarko. The Texas Supreme Court rejected the insurers’ argument and the decision of the court below, finding that the joint venture provision applies only to “liabilities” – that is, amounts Anadarko becomes legally obligated to pay to a third party. Defense costs, in contrast, are not amounts paid to a third party and, thus, are not “liabilities” within the context of the joint venture provision. The Court also drew on other policy provisions to support the distinction, including provisions that specifically refer separately to “liabilities” and “defense expenses.” “The Texas Supreme Court’s reversal of the appellate panel’s ruling serves as a clear pronouncement of both insurance policy construction rules and proper appellate review in Texas,” Oehninger said. “In this regard, the Supreme Court’s opinion serves to ‘right the ship’ and bring Texas case law back in line with precedent.”
Continue Reading Hunton Insurance Attorney, Sergio F. Oehninger, Explains the Significance of Anadarko’s Texas Supreme Court Insurance Win
Reversing a Texas Court of Appeals decision that allowed Anadarko’s Lloyd’s of London excess insurers to escape coverage for more than $100 million in defense costs incurred in connection with claims from the Deepwater Horizon well blowout, the Supreme Court of Texas held that the insurers’ obligations to pay defense costs under an “energy package” liability policy are not capped by a joint venture coverage limit for “liability” insured. Anadarko Petroleum Corp. et al. v. Houston Casualty Co. et al., No. 16-1013 (Tex. Jan. 25, 2019).Continue Reading Texas Supreme Court Holds Anadarko’s $100M Deepwater Horizon Defense Costs Are Not Subject To Joint Venture Liability Limits
In Zurich American Insurance Co. v. Don Buchwald & Associates, Inc., 2018 N.Y. Slip. Op. 33325(U) (Sup. Ct. N.Y. County, Dec. 21, 2017), the Supreme Court of New York held that Zurich was obligated to defend a talent and literary agency against claims brought by Hulk Hogan alleging that the agency aided and abetted one of its agents—Tony Burton—in publishing racist and sexual footage of Hulk Hogan online. The decision also gives ammunition to policyholders seeking to recover their fees incurred while litigating against an insurer’s improper denial of coverage. The court found that the insureds had “been cast in a defensive posture” due to the insurer’s claims seeking a declaratory judgment, and that this justified a fee-shifting award.
Continue Reading Talent Agency Wrestles Defense Coverage From Insurers in Hulk Hogan Coverage Fight