Drug-maker Pfizer and one of its excess insurers, North River, are in the middle of a contentious dispute regarding the proper forum for their coverage dispute over directors and officers liability insurance following both parties’ race to the courthouse to file competing lawsuits in 2015. Pfizer argues that its own preferred forum of Delaware (where Pfizer is incorporated) is correct, while North River counters that New York (where Pfizer’s headquarters and its broker are located) is the proper forum. The dispute, which involves competing motions in Delaware and New York courts, highlights the importance of both the timing and location of forum selection in litigating insurance coverage disputes.

Continue Reading Insurer’s “Forum Shopping” in Pfizer Securities Coverage Dispute Provides Most Recent Example of Venue Battle

Last month, we reported on the ongoing insurance coverage dispute between commercial landlord KVP Properties, Inc. and its property insurer, Westfield Insurance Company. The dispute arises from an October 2015 DEA raid on KVG-owned rental units in Novi, Michigan, which uncovered damage to the units related to the tenants’ marijuana growing operations. The arguments raised by KVG on appeal highlight a number of important marijuana-related coverage issues, which Westfield has now addressed in opposition.

Continue Reading Insurer Defends Denial in Property Coverage Dispute Involving Marijuana Growing Operations

In today’s interconnected society, a cyber breach is inevitable. For energy companies in particular, the threat is even more acute as cyber security improvements lag behind the rapid digitalization in oil and gas operations. One recent cyber security report stated that 68% of respondents reported that their organization experienced at least one cyber compromise. And, just last week, it was disclosed that hackers used sophisticated malware, called “Triton,” to take control of a key safety device at a power plant in Saudi Arabia. Find our analysis of this latest attack on the blog here .

Continue Reading Hunton Insurance Lawyers Advise the Oil and Gas Industry on How Insurance Mitigates Cyber-Related Risk

In what has been described as a “watershed” cyber incident, hackers recently used sophisticated malware—dubbed Triton—to take control of a key safety device installed at a power plant in Saudi Arabia. One of the few confirmed hacking tools designed to manipulate industrial control systems, this new breach is part of a growing trend in hacking attempts on utilities, production facilities, and other critical infrastructure in the oil and gas industry. The Triton malware attack targeted the Triconex industrial safety technology made by Schneider Electric SE. The attack underscores the importance of mitigating this and other similar risks through cyber and other traditional liability insurance as part of a comprehensive cybersecurity program.

Continue Reading “Watershed” Cyber Attack Targets Industrial Plant: Highlights Need for Adequate Cyber Insurance

This week, SEC Chairman Jay Clayton issued a statement on Initial Coin Offerings (ICO) addressing the legality, fairness, and risks associated with those offerings. Although the agency’s bulletin was one of many recent public statements by federal agencies on ICOs and cryptocurrencies generally, this new warning highlights additional issues and concerns with the ICO phenomenon that are particularly relevant to insurance coverage.

Continue Reading Initial Coin Offerings and Insurance

Earlier this month, the California Supreme Court agreed to review Montrose Chemical Corporation’s appeal from a September appellate court ruling that rejected Montrose’s preferred “vertical exhaustion” method of exhausting excess-layer policies in favor of a policy-by-policy review to determine which policies are triggered. The California high court’s grant of Montrose’s petition for review is potentially significant in clarifying the appropriate excess policy exhaustion trigger under California law, not to mention in addressing a significant insurer defense in Montrose’s longstanding coverage dispute over environmental insurance coverage, which has been winding its way through California courts for more than 25 years.

Continue Reading California Supreme Court to Review Policy Exhaustion in Chemical Manufacturer Coverage Dispute

The Fifth Circuit recently upheld the dismissal on summary judgment of a policyholder’s claim under a commercial crime insurance policy, affirming the trial court’s narrow interpretation of the terms “owned” and “loss,” concluding that the policyholder did not “own” the funds at issue or suffer a “loss” when it loaned those funds to the fraudsters. In so holding, the court ignored state court precedent concerning construction of those same terms.

In Cooper Industries, Ltd. v. National Union Fire Insurance Co. of Pittsburgh, Pa., No. 16-20539 (5th Cir. Nov. 20, 2017), Cooper invested its pension-plan assets into what proved to be a multimillion-dollar Ponzi scheme. Over the course of many years, Cooper invested more than $175 million into various equity and bond investments managed by fraudsters who used the investment funds in furtherance of the Ponzi scheme. After discovering the fraud, Cooper recouped a large portion of its investment and sought coverage from its commercial crime insurer for the unrecovered $35 million. The policy limited coverage to “loss” of property that Cooper “owned.” Neither term was defined in the policy. Continue Reading Fifth Circuit Finds No Coverage Under Commercial Crime Policy Based on Narrow Construction of Undefined Terms

Last week, Golden Bear Insurance Company became the first admitted insurer approved by the California Department of Insurance to provide insurance coverage for marijuana companies. Golden Bear will now begin offering first- and third-party insurance coverage specifically targeting marijuana companies in the state.

Continue Reading Golden Bear Becomes First Admitted Carrier to Offer Marijuana Coverage in California