On August 27th, a California Appellate Court held that an employment practices liability insurance policy’s “wage and hour” exclusion must be construed narrowly to bar coverage only for claims related to “laws concerning duration worked and/or remuneration received in exchange for work.” In doing so, the court made clear that “wage and hour” exclusions do not preclude coverage for claims that go beyond the employee’s actual remuneration received in exchange for work.

Continue Reading Wage and Hour Exclusion Must Be Construed Narrowly

A Massachusetts federal court ruled last week that Allied World Insurance Co. must pay for a Boston law firm’s defense of counterclaims asserted against it in a lawsuit over, among other things, the proper ownership of client files and materials.

Continue Reading Counterclaims by Firm’s Former Lawyers Trigger Defense Duties under Professional Liability Policy

The Seventh Circuit recently withdrew its controversial opinion that broadly interpreted an exclusion in Emmis Communications Corporation’s D&O policy, thereby barring coverage for losses in connection with claims of circumstances “as reported” under Emmis’ other insurance policy. The reversal, while very rare, was the correct result that alleviated concerns about the chilling effect the court’s broad reading of the exclusion may have on policyholders’ decisions to provide notice under all potentially applicable insurance policies.

Continue Reading Seventh Circuit Withdraws Decision, Affirms Coverage for Emmis Shareholder Lawsuit Despite Notices to Multiple Insurers

In the August 2019 publication of Contract Management, Hunton insurance recovery lawyers Walter Andrews, Lorelie Masters, Michael Levine, and Latosha Ellis discuss how a robust insurance program can help government prime contractors mitigate potential financial risks associated with downstream data breaches or releases. In the article, the authors explain government prime

A Delaware court held that an appraisal action, which includes $39 million in attorneys’ fees, prejudgment interest, and costs incurred in defending litigation that arose out of Solera Holdings Inc.’s acquisition by Vista Equity Partners LP, constitutes a covered “securities claim” under Solera’s directors and officers liability insurance policy.

Continue Reading Delaware Court Says Appraisal Action Constitutes a “Securities Claim”; Triggers D&O Coverage

Last week the Northern District of Illinois held in Magnetek, Inc. v. Travelers Indem. Co., 2019 WL 3037080 (N.D. Ill. July 11, 2019), that Travelers had a duty to defend Magnetek, Inc. under insurance policies issued to Magnetek’s predecessor, Fruit of the Loom (“FOTL”). A copy of the Magnetek decision can be found here.

Continue Reading Agreement By Parent Company Does Not Extinguish Rights Of Former Subsidiary

A federal court has ruled in Catlin Specialty Ins. Co. v. J.J. White, Inc., that settlement of an underlying third-party lawsuit involving covered and uncovered claims requires consideration of two principles of proof. First, the factfinder must assume that the insured was actually liable in the underlying case. Second, the factfinder must resolve all factual issues necessary to deciding coverage. A copy of the decision can be found here; and a copy of a related summary-judgment opinion can be found here.

Continue Reading Federal Court Crafts Creative Path to Establish Insurance Coverage for Settled Third-Party Claims

In a significant win for policyholders, the Ninth Circuit rejected an insurer’s argument that the common meaning of “war” applied when interpreting a war exclusion, instead of the customary usage of the term, pursuant to Cal.  Civ. Code 1644, and revived NBC Universal’s attempt to recover at least $6.9 million in costs incurred to relocate the production of a television show from Jerusalem during the 2014 Israeli-Palestinian conflict. Universal Cable Prods., et al., LLC v. Atl. Specialty Ins. Co., 2019 WL 3049034, at *10 (9th Cir. July 12, 2019).

Continue Reading It’s Not Rocket Science: Ninth Circuit Rejects Insurer’s Attempt to Invoke War Exclusion for Hamas Rocket Attack