The Illinois Supreme Court’s recent decision in Sanders v. Illinois Union Insurance Co., 2019 IL 124565 (2019), announced the standard for triggering general liability coverage for malicious prosecution claims under Illinois law.  In its decision, the court construed what appears to be a policy ambiguity against the policyholder in spite of the longstanding rule of contra proferentem, limiting coverage to policies in place at the time of the wrongful prosecution, and not the policies in effect when the final element of the tort of malicious prosecution occurred (i.e. the exoneration of the plaintiff).  The net result of the court’s ruling for policyholders susceptible to such claims is that coverage for jury verdicts for malicious prosecution – awarded in today’s dollars – is limited to the coverage procured at the time of the wrongful prosecution, which may (as in this case) be decades old.  Such a scenario can have costly consequences for policyholders given that the limits procured decades ago are often inadequate due to the ever-increasing awards by juries as well as inflation.  Moreover, it may be difficult to locate the legacy policies and the insurers that issued such policies may no longer be solvent or even exist.  A copy of the decision can be found here.


Continue Reading New Illinois Supreme Court Trigger Rule for CGL Personal Injury “Offenses” Could Have Costly Consequences for Policyholders

In a recent decision, the Maryland Court of Special Appeals reiterated that the duty to defend broadly requires a liability insurer to defend an entire lawsuit against its insured, even where only some of the allegations are potentially covered.  The court further held that the insured has no obligation to apportion defense costs among multiple implicated policies.  The decision, Selective Way Insurance Company v. Nationwide Property and Casualty Insurance Company, et al., can be found here.

Continue Reading Duty to Defend Broadly Applies to Entire Action; Insured Need Not Apportion Defense Costs, Says Maryland Appeals Court

After a four-day trial, an Arizona federal jury found that Western Truck Insurance Services, Inc., an insurance broker, was negligent in selling Madison Alley Transportation and Logistics Inc. a business interruption policy with inadequate annual limits. Based on its finding of negligence, the jury determined that the broker was liable for $685,000 of $1,000,000 in damages suffered by Madison Alley as a result of a flood in its warehouse.  The verdict and Complaint, filed in Arizona state court before the case was removed, can be found here and here.

Continue Reading Jury Finds Broker Liable for Policyholder’s Insufficient Business Interruption Limits

On October 16, 2019, Hunton Andrews Kurth insurance lawyers Michael S. Levine and Daniel Hentschel discussed insurance coverage issues concerning blockchain technology and cryptocurrencies in an article published by IRMI (Insurance Risk Management Institute, Inc.). The full article is available here. In the article, the authors discuss the potential risks associated with the use

Hunton Insurance Coverage practice partner Michael Levine will be speaking in an upcoming Strafford live webinar, “Depreciation of Labor in Property Insurance Claims: Guidance From Recent Cases,” scheduled for Wednesday, October 30, 1:00pm-2:30pm EDT.
Continue Reading Hunton Insurance Coverage Partner Michael Levine to Present on the “Depreciation of Labor in Property Insurance Claims”

In Dunn, et al. v. Columbia National Insurance Company, No. 2:17-cv-0246 (N.D. Ga.), an insurance company refused to defend an insured in a personal injury claim contending that the insured failed to cooperate in the defense. The underlying claim stemmed from an automobile accident, where an employee of Lawson Air Conditioning and Plumbing, Inc. (“Lawson”), Ronald Patterson, struck members of the Dunn family with a pickup truck owned by Lawson as the family was walking out of a Walmart store. The Dunn family members suffered bodily injury as a proximate result of the accident.  Patterson admitted fault.

Continue Reading Insurer Cannot Invoke Duty to Cooperate as Affirmative Defense After Denying Coverage

A federal court in Illinois ruled recently, in Cincinnati Insurance Company v. H.D. Smith Wholesale Drug Company, that Cincinnati Insurance Company was required to indemnify H.D. Smith for a $3.5 million settlement it reached with the State of West Virginia.  The settlement resolved an action in which West Virginia alleged that H.D. Smith contributed to the state’s opioid addiction epidemic through its negligent distribution of opioid prescription drugs.

Continue Reading Opioid Settlement Triggers Insurer’s Duty to Indemnify Where Covered Claims Are “Primary Focus” of the Action

Insurance companies frequently raise the so-called “dishonesty” exclusion that is typically found in most professional liability and directors and officers insurance policies.  Last week, the U.S. Court of Appeals for the Sixth Circuit took a substantial step toward curtailing that practice.  In a coverage dispute with eight-figure implications, the appellate court found in favor of the policyholder and ruled that publishing false statements does not equate to dishonesty and thus is not sufficient to support application of a dishonesty exclusion.

Continue Reading Sixth Circuit Reverses Insurer’s Overly Broad Application of “Dishonest Acts” Exclusion

Recap of Hunton Insurance Recovery Group presentations in August and September 2019 focusing on key risk management techniques and strategies for maximizing recoveries under corporate insurance policies and enforcing indemnity rights under technology, sales, services, outsourcing, and other commercial contracts:

  • John Eichman and Sergio F. Oehninger presented a seminar on Electronic Crime – Insurance Coverage