Notwithstanding the absence of a congressional war declaration since Japan bombed Pearl Harbor, Zurich American Insurance Company has invoked a “war exclusion” in an attempt to avoid covering Illinois snack food and beverage company Mondelez International Inc.’s expenses stemming from its exposure to the NotPetya virus in 2017. The litigation, Mondelez Intl. Inc. v. Zurich Am. Ins. Co., No. 2018-L-11008, 2018 WL 4941760 (Ill. Cir. Ct., Cook Cty., complaint filed Oct. 10, 2018), remains pending in an Illinois state court. Continue Reading Zurich Invokes War Exclusion in Battle Over Coverage for NotPetya Attack
The doctrine of functus officio typically sets an arbiter’s award in stone: It forbids an arbiter from altering its award after the award has been rendered. But the doctrine has several exceptions. One such exception, known as the clarification exception, allows an arbitration panel to clarify an ambiguous final award. In Gen Re Life Corporation v. Lincoln National Life Insurance, the Second Circuit joined several other circuits in expressly adopting this exception, allowing an arbitration panel to clarify the meaning of its prior interpretation of rescission-clause in a reinsurance agreement. Hunton Andrews Kurth attorneys Syed Ahmad, Patrick McDermott, and David Costello discuss the decision and its implications for policyholders in their recent article, Arbitration of Insurance Disputes: Functus Officio and the Clarification Exception.
In Zurich American Insurance Co. v. Don Buchwald & Associates, Inc., 2018 N.Y. Slip. Op. 33325(U) (Sup. Ct. N.Y. County, Dec. 21, 2017), the Supreme Court of New York held that Zurich was obligated to defend a talent and literary agency against claims brought by Hulk Hogan alleging that the agency aided and abetted one of its agents—Tony Burton—in publishing racist and sexual footage of Hulk Hogan online. The decision also gives ammunition to policyholders seeking to recover their fees incurred while litigating against an insurer’s improper denial of coverage. The court found that the insureds had “been cast in a defensive posture” due to the insurer’s claims seeking a declaratory judgment, and that this justified a fee-shifting award.
Policyholders facing any type of products liability scored a win in a recent decision from the District Court for the Northern District of Illinois. The court found that an insurance company must defend its insured against claims arising out of a recall while simultaneously funding the insured’s affirmative claims for recovery.
2018 was a big year for insurance coverage cases, especially those involving social engineering phishing, spoofing and other schemes of trickery and deception.
The insurance recovery lawyers at Hunton Andrews Kurth have compiled their list of the top insurance cases of 2018. A copy of the Review can be found here.
Hunton Andrews Kurth insurance partner Michael Levine was recently interviewed by LegalTech News concerning Ohio’s recent adoption of the National Association of Insurance Commissioners’ (NAIC) Insurance Data Security Model Law. The law, modeled after the New York State Department of Financial Services Cybersecurity Requirements for Financial Service Companies Act, seeks to provide a framework for states to address risks and develop cybersecurity guidelines for insurance companies. Ohio became the second state, after South Carolina, to adopt the model law. As Mike explained in the article, the statute provides policyholders with an added layer of protection against disclosure of sensitive and confidential information that may be held by insurers operating in the state.
A link to the article featuring Mike’s comments can be found here.
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
The Second Circuit has ruled a claim alleging an “offer for sale” infringed on a patent constitutes an advertising injury sufficient to trigger a defense under commercial general liability insurance. In High Point Design LLC v LM Insurance Corporation, the plaintiff High Point brought a declaratory-judgment action against Buyer’s Direct, Inc. after the latter directed High Point to cease-and-desist in the sale of its Fuzzy Babba slippers. Buyer’s Direct responded with a counterclaim alleging trade dress infringement, claiming that High Point’s offers for sale in retail catalogs infringed on Buyer’s Direct’s own slipper trade dress. Buyer’s Direct sought discovery of all advertising, marketing and promotional materials related to High Point’s fuzzy footwear to substantiate its claims.
The United States District Court for the Middle District of Florida recently granted summary judgment in favor of developer, KB Homes, ruling that Southern Owners Insurance Co. must defend KB Homes under various Commercial General Liability policies.
Gatwick airport has been shut down since Wednesday night UK time due to the presence of multiple drones around the perimeter of the runway. A drone was first spotted Wednesday evening in the vicinity of Gatwick’s runway. After being briefly re-opened several hours later, the runway was shut down for good when several more drones were discovered. Given the public safety risk of attempting to shoot the drones down from the ground, law enforcement is instead focusing on identifying and apprehending the drone operators to ensure that the area is safe for air travel.