As the new year gets under way, cases that will shape the insurance landscape in 2019 continue to proceed.  Among them are First Acceptance Ins. Co. v. Hughes, in which the Georgia Supreme Court will address the prerequisites for a policyholder to sue its insurance carrier for bad faith based on the insurer’s failure to settle the underlying dispute for an amount within the available policy limits.  Hunton Andrews Kurth’s insurance practice head, Walter Andrews, was asked by Insurance Law360 to comment on the significance of that case.  As Andrews explained, the insurer’s position is inconsistent with Georgia law.  “Georgia law does not require some particular form of settlement offer — or even an offer at all — to create an insurer’s duty to settle claims against their insureds.” Rather, as Andrews explained, “that duty arises when the insurer knows or reasonably should know that not settling will create an ‘unreasonable risk’ of the insured suffering a judgment in excess of his or her policy limits, regardless of whether a third-party claimant has first presented a settlement offer. Most often, that should be a jury question and not something that is susceptible to summary judgment.”
Continue Reading Hunton Insurance Head Comments on Insurance Cases to Watch in 2019

Hunton insurance recovery partner Syed Ahmad was recently asked by Insurance Law360 to opine concerning key insurance issues that are pending before the Wisconsin Supreme Court and ripe for decision this fall.  In the article, which can be found here, Ahmad notes with respect to the case of Secura Insurance v. Ray Duerr Logging LLC, case number 2016AP299, concerning whether damage tied to a wildfire constitutes one or multiple occurrences for coverage purposes, the Court of Appeals did a good job of focusing on the particulars of the claim at hand and not superficially relying on abstract labels like “cause test” or “effects test,” that are not all that illuminating, explaining that what one party characterizes as the “cause” of a loss can often be what another party deems to be “effect” resulting in the loss.

Continue Reading Hunton Insurance Partner, Syed Ahmad, Discusses Key Insurance Issues Before the Wisconsin Supreme Court

The construction industry is no stranger to insuring its projects against the risks of physical and natural disasters. Policies purchased to cover these risks, however, often are not broad enough to reach cyber threats, which can be just as damaging and costly as a physical disaster. During the past decade, hacks have targeted the data held by several high profile companies, including Target Corp., Sony Corp., Equifax Inc. and Yahoo Inc.  So far, the construction industry has not yet been at the center of one of these attacks.  Still, builders are no less susceptible to these risks than any other industry, especially given that these companies often possess sensitive data related to buildings and projects.

Continue Reading Construction Industry May Be At Risk For Uncovered Losses Due To Cyber Attacks

Hunton insurance recovery partner, Syed Ahmad, was recently asked to comment by Law360 on a Delaware Superior Court decision finding that state law does not preclude D&O insurance coverage for fraud-based claims against two Dole Food Co. executives, who are seeking to force several excess insurers to help pay for $222 million in settlements they reached to resolve stockholder suits accusing them of driving down Dole’s price before a 2013 take-private deal.  According the Ahmad, the ruling is likely to carry strong precedential effect due to the solid reasoning of the court’s decision, which is premised on the Delaware Supreme Court’s 1986 decision in Whalen v. On-Deck Inc., which upheld the availability of coverage for punitive damages under Delaware law.

Continue Reading Hunton Insurance Partner, Syed Ahmad, Comments on Delaware D&O Insurance Decision

Hunton & Williams Insurance Recovery partner, Lorelie (Lorie) S. Masters, has been selected to Law360’s 2018 Insurance Editorial Advisory Board, whose purpose is to analyze Law360’s coverage of significant developments in the practice of insurance coverage law, and gain insight from experts in the field on how best to shape future coverage.  An article in Law360 discussing the Editorial Advisory Board and each of its members can be found here.

Continue Reading Hunton Insurance Recovery Partner, Lorie Masters, to Advise Law360 in 2018

In an article published in Law360, Hunton & Williams LLP partners Walter Andrews, Malcolm Weiss, and I discuss two recent decisions in Tree Top Inc. v. Starr Indem. & Liab. Co., No. 1:15-CV-03155-SMJ, 2017 WL 5664718 (E.D. Wash. Nov. 21, 2017).  There, the Eastern District of Washington rejected an insurer’s attempt to escape insurance coverage for a Proposition 65 lawsuit filed against juice-maker Tree Top Inc.

Continue Reading “3 Takeaways Squeezed Out of Juicer’s Insurance Battle” – Hunton Attorneys Discuss Insurance Coverage for Prop. 65 Claims and Key Takeaways from Recent Set of Washington District Court Rulings.

In an article appearing in Law360, Hunton & Williams insurance partner, Michael Levine, weighs in on Office Depot’s pending Ninth Circuit appeal of a district court ruling that Office Depot is not entitled to coverage for a California False Claims Act case alleging that the office supply chain overbilled public agency customers.  The decision is premised on a finding that California Insurance Code Section 533 — which precludes coverage for a policyholder’s willful acts — applies to the entire underlying CFCA action, including allegations of reckless and negligent conduct.  But as Levine points out, the district court made the “fundamental error” of presuming that Office Depot had actually been found liable for a violation of the CFCA, when it had not.  Section 533 requires “more than the mere allegation” of a willful act by a policyholder, he said.  Levine goes on to explain the danger in affirming such an erroneous ruling is that “it creates a dilemma for policyholders, because even the mere allegation of a CFCA violation would be barred from coverage [even though n]othing in Section 533 suggests it was intended to have such a broad preclusive effect.”

My partner, Walter Andrews, recently commented in a Law360 article concerning the top insurance cases to watch in 2017.  The Law360 article, titled Insurance Cases to Watch in the 2nd Half of 2017, features Andrews commenting on the impact of Global Reinsurance Corp. of America v. Century Indemnity Co., case number CTQ-2016-00005, in the Court of Appeals of the State of New York, where he points out how a win for Global Re could result in a huge windfall for the reinsurer by saving on its defense costs, since reinsurers typically must pay both indemnity and defense costs.  Andrews also commented on Continental Insurance Co. et al. v. Honeywell International Inc. et al., case number 078152, in the Supreme Court of the State of New Jersey, noting the significant impact that choice of law could play on the outcome of that dispute.

Hunton & Williams insurance partner Syed Ahmad was recently quoted in Law360 regarding a recent trend in judicial decisions favoring policyholders. Ahmad addresses an apparent trend by courts to refuse to allow technical violations to void coverage under complex insurance policies. A link to the Law360 article containing Ahmad’s comments can be found at 5 Insurance Rulings You May Have Missed In The 1st Quarter.

Law360 sought the perspective of Walter Andrews, head of Hunton & Williams LLP’s insurance coverage practice, when collecting its list of cases to watch in 2017. Andrews identified a case pending with the Texas Supreme Court – USAA Texas Lloyds Co. v. Menchaca, which we reported on in October.  As Andrews explained to Law360, “If the Texas Supreme Court comes down in the policyholder’s favor here, it would provide a substantial weapon for policyholders’ arsenals, as far as what they have to [use against] insurers that don’t reasonably investigate claims. That would create a real incentive for insurance companies to timely and reasonably investigate claims.”

As a reminder about the case, Gail Menchaca filed a claim with her homeowners insurer USAA for damage sustained in Hurricane Ike. USAA determined that the claim was covered, but did not exceed her deductible and, thus, refused to make payment under the policy. Ms. Menchaca, whose loss estimates exceeded the deductible, sued for breach of contract and violation of the Texas Insurance Code. The jury found that USAA had not breached the policy, but, nevertheless, was liable for failure to conduct a reasonable investigation of her claim – a decision affirmed by the Texas Court of Appeals. The case was argued to the Texas Supreme Court in October, and awaits a decision.

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