The Seventh Circuit held last week that a manufacturer’s insurer must cover its insured, a designer and builder of anaerobic digesters, under its errors and omissions policy for claims alleging breach of contract, despite an exclusion in the policy for claims arising out of the breach of an express or oral contract. The decision in Crum & Forster Specialty Insurance Company v. DVO, Inc., No. 18-2571 (7th Cir. Sept. 23, 2019), illustrates the practical application of policy construction to avoid what would otherwise amount to an illusory promise of coverage.
Continue Reading Seventh Circuit Says Contract Exclusion Renders E&O Coverage Illusory

Congratulations to Hunton Andrews Kurth LLP insurance recovery lawyer, Geoffrey Fehling, on his confirmation by the DC Bar Foundation’s Board of Directors to the organization’s Young Lawyers Network Leadership Council.

Continue Reading Hunton’s Geoffrey Fehling Confirmed to DC Bar Foundation’s Young Lawyers Network Leadership Council

A Florida district court recently held that an insurer wrongfully refused to defend a Miami-based strip club in a lawsuit filed by 17 models claiming that the club used their images to promote its business without their authorization. The insurer was required to defend the club for allegations of defamation under the policy’s personal and advertising coverage even though 16 of the 17 plaintiffs’ claims alleged conduct outside the covered policy period and no plaintiffs brought a cause of action for “defamation.” The decision highlights the broad duty to defend, in Florida and elsewhere, that policyholders should emphasize when pursuing coverage.

Continue Reading Miami Strip Club Entitled to Coverage for Models’ Defamation Lawsuit

Energy industry: is your insurance sufficient to handle a major cyber event? Larry Bracken, Mike Levine, and I address this question and more in our recent article for Electric Light & Power, found here.  In the article, we identify three major gaps in cyber insurance that we routinely see when analyzing coverage for energy industry clients. The first major gap is coverage for bodily injury or property damage caused by a cyber event. Most cyber insurance policies exclude coverage for both bodily injury and property damage, even if caused by a cyber event. Meanwhile, many commercial general liability insurance policies now exclude cyber-related risks, thus creating a gap in coverage for these losses. The second gap we identify is coverage for fines and penalties, including those issued under the European Union’s General Data Protection Regulation (GDPR). Even where cyber insurance policies expressly purport to cover fines and penalties, it is unclear if these may be deemed uninsurable as a matter of public policy in certain jurisdictions. Finally, we identify a gap in coverage for business income losses when the insured’s network, or that of a vendor on which they rely, goes down. That coverage is a key component of a robust cyber program, but one that is typically only offered for an additional premium.

Continue Reading Hunton Insurance Lawyers Discuss Cyber Risks to the Energy Grid in Electric Light & Power

The Third Circuit ruled on Friday that differing “occurrence” definitions can have materially different meanings in the context of whether product defect claims constitute an “occurrence” triggering coverage under general liability insurance policies. The Court held in Sapa Extrusions, Inc. v. Liberty Mutual Insurance Company, that product claims against Sapa may be covered under policies that define an “occurrence” as an accident resulting in bodily injury or property damage “neither expected nor intended from the standpoint of the insured.”  However, the Court affirmed that coverage was not triggered under policies lacking the “expected” or “intended” limitation, reasoning that, under those policies, there was no question that the intentional manufacturing of Sapa’s product was too foreseeable to amount to an “accident.”

Continue Reading Third Circuit Limits Pennsylvania’s Kvaerner Decision; Unexpected and Unintended Injury May Constitute an “Occurrence” Under Pennsylvania Law

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

California’s highest court held yesterday in Pitzer College v. Indian Harbor Insurance Co., that the state’s insurance notice-prejudice rule is a “fundamental public policy” for the purpose of choice of law analyses. This unanimous ruling, issued in response to certified questions from the Ninth Circuit, confirms and emphasizes California’s common law rule that policyholders

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