The Northern District of New York recently awarded summary judgment to insurer Affiliated Factory Mutual Insurance Co. against Mohawk Gaming Enterprises, a casino and resort operated by the Saint Regis Mohawk Tribe located on the border of New York and Canada. Mohawk Gaming sued AFM seeking recovery of business income losses due to the COVID-19 pandemic. In granting the insurer’s motion, however, the court failed to consider all parts of the AFM policy, as required under New York law, and failed to afford meaning to specific language contained in the policy’s two communicable disease sections, each of which specifically contemplate that “communicable disease,” as defined and covered under the AFM policy, can cause loss and damage to property. Instead, the court followed other decisions from “numerous courts around the country,” each of which is based on inherently flawed reasoning (e.g., reliance on cases where no presence of virus was alleged or cases that clearly and broadly excluded loss caused by virus), to conclude that the presence of virus “is insufficient to trigger coverage when the policy’s language requires physical loss or physical damage.” In fact, a federal court in Texas recently rejected the very same reasoning employed in Mohawk Gaming after recognizing that the FM/AFM policy form “is much broader than [others] and expressly covers loss and damage caused by ‘communicable disease.’” See Cinemark Holdings, Inc. v. Factory Mut. Ins. Co., No. 4:21-cv-00011 (E.D. Tex. May 5, 2021).

Continue Reading New York Federal Court Ignores Policy’s Uniquely Broad Wording in Favor of Following the Herd

A federal appeals court reversed an auto parts manufacturer’s summary judgment win, construing a policy limitation on flood hazards to apply broadly to all types of losses, even though the limit “does not expressly say what losses it limits.” In Federal-Mogul LLC v. Insurance Company of the State of Pennsylvania, manufacturer Federal-Mogul suffered more than $60 million in property and time-element losses following a 2011 flood in one of its factories in Thailand. Federal-Mogul submitted a claim to its insurer, but the insurer refused to pay more than $30 million because the flood occurred in a high hazard flood zone, to which the insurer argued a sublimit in the policy applied.

Continue Reading Sixth Circuit Broadly Construes Policy Sublimit, Limits Recovery for Thai Factory Flood

As Texas and other Gulf coast areas make final storm preparations, now is a good time to gather insurance information and policies. Hunton & Williams insurance attorneys, Michael Levine and Andrea DeField provide important information in this linked Client Alert concerning insurance issues that are likely to arise in the storm’s wake, including potentially applicable

Hunton and Williams LLP has published its 2016 Retail Industry Year in Review.  The Review discusses the key legal and regulatory developments that affected the retail industry last year.  In the Review, Hunton insurance coverage attorneys Syed Ahmad, Mike Levine and Jenn White discuss the lessons learned from insurance coverage cases that promise to

On December 1, 2016, the Florida Supreme Court held that the concurrent cause doctrine applies where multiple perils combined to create a loss even where one of those perils is excluded by the terms of the all-risk property insurance policy. The decision is a significant victory for Florida policyholders, especially where other jurisdictions have struggled

Hunton & Williams LLP attorneys Mike Levine and Matt McLellan, along with Tim Monahan of Lockton Companies, LLC., presented to a group of risk managers and insurance professionals on Wednesday evening, February 17th, about strategies and pitfalls in the claim presentation process. The event was well-attended and the audience was lively with questions for the presenters. A copy of the PowerPoint can be downloaded here. Key points discussed with the group include:

Continue Reading Hunton Lawyers Discuss How to Survive the Claims Process

As discussed in a February 1, 2016 posting, the court in Foster Poultry Farms v. Certain Underwriters at Lloyd’s, London, No. 14-cv-953, 2015 WL 5920289 (E.D. Cal. Oct. 9, 2015) held that losses associated with alleged noncompliance with federal sanitation regulations were covered by the “accidental contamination” and “government recall” provisions of a food

Florida’s Second District Court of Appeals ruled on Friday that a homeowner’s insurance policy provision restricting assignment without the insurer’s consent does not restrict the post-loss assignment of policy benefits to an emergency water mitigation company, reversing the trial court’s ruling on summary judgment. In Bioscience West, Inc. v. Gulfstream Prop. & Cas. Co., the homeowner suffered a water loss and hired Bioscience to perform emergency water mitigation. Case No. 2d14-3946 (Fla. 2d DCA Feb. 5, 2016). In return for its services, the homeowner assigned the benefits of her insurance policy to Bioscience under an agreement permitting Bioscience to directly bill the insurer. The insurer, Gulfstream Property and Casualty Company (Gulfstream), refused to pay Bioscience as assignee, citing the policy’s assignment provision. Bioscience sued Gulfstream for breach of contract. The trial court granted summary judgment in favor of Gulfstream, finding that the policy’s assignment provision precluded the post-loss assignment to Bioscience without the insurer’s consent.

Continue Reading No Consent? No Problem: Florida Appellate Court Upholds Post-Loss Assignment of Policy Benefits

Insureds Find Place to Roost in Foster Poultry Contamination Case, Westlaw Journal Insurance Coverage
January 15, 2016

Article discussing the insurance implications of food contamination events, including product recalls, government investigations and litigation. Large-scale food safety issues have been hard to miss in the news lately. Chipotle’s multi-state E. Coli outbreak and listeria monocytogenes