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The Fifth Circuit recently reaffirmed that an insurer’s duty to indemnify hinges on the facts determined in the underlying case, not the allegations. Thus, as confirmed by the Fifth Circuit’s July 31, 2023 decision in Liberty Mut. Fire Ins. Co. v. Copart of Conn., Inc., No. 21-10938, 2023 WL 4862793 (5th Cir. July 31, 2023), an adverse duty-to-defend decision may not foreclose a liability insurer’s indemnity obligations.…

Continue Reading Fifth Circuit: Policyholders Can Still Salvage Adverse Duty To Defend Rulings

Last week, the Fifth Circuit affirmed that a title company’s crime protection policy applies to cover loss from a fraudulent wire transfer. The insurer, RLI Insurance Company (RLI), had argued that the $250,945.31 transfer was not covered under the funds transfer fraud endorsement because the instruction that led to the transfer was authorized and approved by the insured, Valero Title Inc. (Valero). Specifically, a Valero employee instructed Valero’s bank to wire the funds to a fraudulent account after a fraudster posing as a lender’s employee intercepted email communications regarding a payoff transaction and deceptively instructed the transfer.…

Continue Reading Fifth Circuit Affirms Crime Policy’s Applicability to Fraudulent Transfer

In this month’s Recall Roundup on the Hunton Andrews Kurth Retail Law Resource blog, Hunton insurance attorneys Syed S. Ahmad and Geoffrey B. Fehling weighed in on a recent food contamination insurance coverage dispute, Travelers Casualty Insurance Co. of America v. Mediterranean Grill & Kabob, Inc. (W.D. Tex. Nov. 4, 2020), which dealt with single versus multiple “occurrences” under an insurance policy, a common issue in recall and contamination-related claims.
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Continue Reading Texas Court Treats 124 Separate Food Poisoning Cases as Single “Occurrence”

Following a six-day trial, a Texas jury found that Great American Insurance Company breached its policy with a hydraulic fracturing company and engaged in unfair settlement practices when it refused to pay for loss the company sustained in a well accident. The decision highlights the need to vigorously pursue coverage using all information available and the benefits of leveraging state statutory protections governing unfair claims settlement practices to ensure that insurers handle claims in a prompt, fair, and reasonable manner.
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Continue Reading Texas Jury Awards Millions to Fracking Company For Insurer’s Bad Faith Denial of Claim For Broken Well Equipment

The United States District Court for the Southern District of Texas recently rejected a claim by a group of insurance companies (“Underwriters”) against American Global Maritime Inc. for more than $500 million that the Underwriters paid the named insured under an Off-Shore Construction Risk insurance policy for losses resulting from the an alleged off-shore oil rig failure.
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Continue Reading Waiver of Subrogation Enforced, Denying Insurers Recovery Against Additional Insured in $500 Million Off-Shore Oil Rig Loss

The Fifth Circuit recently upheld the dismissal on summary judgment of a policyholder’s claim under a commercial crime insurance policy, affirming the trial court’s narrow interpretation of the terms “owned” and “loss,” concluding that the policyholder did not “own” the funds at issue or suffer a “loss” when it loaned those funds to the fraudsters. In so holding, the court ignored state court precedent concerning construction of those same terms.

In Cooper Industries, Ltd. v. National Union Fire Insurance Co. of Pittsburgh, Pa., No. 16-20539 (5th Cir. Nov. 20, 2017), Cooper invested its pension-plan assets into what proved to be a multimillion-dollar Ponzi scheme. Over the course of many years, Cooper invested more than $175 million into various equity and bond investments managed by fraudsters who used the investment funds in furtherance of the Ponzi scheme. After discovering the fraud, Cooper recouped a large portion of its investment and sought coverage from its commercial crime insurer for the unrecovered $35 million. The policy limited coverage to “loss” of property that Cooper “owned.” Neither term was defined in the policy.
Continue Reading Fifth Circuit Finds No Coverage Under Commercial Crime Policy Based on Narrow Construction of Undefined Terms

Hunton insurance lawyers Michael Levine, Syed Ahmad and Katherine Miller discuss how Hurricanes Harvey and Irma highlight the need for contingent business interruption insurance and why companies with this coverage should be considering how to obtain its benefit for income losses resulting from the recent storms. The article was published this morning in Risk Management.…

As Texas and other Gulf coast areas make final storm preparations, now is a good time to gather insurance information and policies.  Hunton & Williams attorneys, Michael Levine and John Eichman provide important information in the linked article published by The Texas Lawbook concerning insurance issues that are likely to arise in the storm’s wake,…

As Texas and other Gulf coast areas make final storm preparations, now is a good time to gather insurance information and policies. Hunton & Williams insurance attorneys, Michael Levine and Andrea DeField provide important information in this linked Client Alert concerning insurance issues that are likely to arise in the storm’s wake, including potentially applicable…