Archives: Insurance Coverage

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Two state Supreme Courts reach commercially reasonable results by permitting post-loss assignments  

By Lisa Szymanski and Nicholas Rodriguez on Posted in Commercial General Liability, Insurance Coverage, Insurance General, Property Damage & Business Interruption
The well-established principle that a policyholder may assign benefits under an insurance policy following a loss was recently reaffirmed by state supreme courts in two jurisdictions:  South Carolina and Puerto Rico. These two jurisdictions join the majority rule, which holds that assignments following an insured loss are permissible because they do not change the scope … Continue Reading

Insurance applications seeking an insured’s subjective opinions cannot support insurer defenses of misrepresentation or concealment

By Keith Meyer on Posted in Insurance Coverage, Insurance General
When applying for insurance, prospective (or existing) insureds are frequently asked to confirm, either in a formal application or in a side letter, that they are not aware of any circumstances, incidents or events that could result in a claim being made against it.  If the insured identifies any potential claim, the insurer will either … Continue Reading

War exclusion: changing battlefields and coverage implications

By Stephanie Gee and Cristina Shea on Posted in Cyberliability, Insurance Coverage, Insurance General
In early February of this year, we wrote about a New Jersey court’s recent decision in Merck & Co., Inc. et al. v. Ace American Ins. Co. et al., Case No. UNN-L-2682-18 (N.J. Sup. Ct.) regarding the applicability of a “war exclusion” for acts of cyberwarfare.  Shortly thereafter, the Russian invasion of Ukraine once again … Continue Reading

Are your crypto risks insured? Look at D&O and cyber policies first

By Jessica E. Gopiao, Christopher Kuleba and Andy Moss on Posted in Cryptocurrency, Financial Insurance Coverage, Insurance Coverage, Insurance General
Evidenced by its $1.29 trillion market cap, (CoinMarketCap, May 17, 2022) interest in cryptocurrency has skyrocketed in recent years (Haar, 2022). Indeed, as of April 2, 2022, the cryptocurrency market was larger than Italy’s GDP, the eighth largest in the world (Adams and Walker, 2022). Of course, with more interest and value comes more risk, … Continue Reading

Florida: the time to move for attorney’s fees post-appraisal

By Wesley Butensky and Christopher Kuleba on Posted in Insurance Coverage, Insurance General, Property Damage & Business Interruption
Most residential property policies provide for an “appraisal” as an alternative dispute resolution mechanism when the insurer concedes coverage for a loss in whole or part, but the amount of the loss is disputed. The resulting appraisal award is binding on the parties absent certain limited grounds for challenging the award or the insurer’s obligation … Continue Reading

Policyholders grapple with strategies for responding to New York’s new insurance disclosure law

By Ann Kramer, Eric Toepfer and Noel Paul on Posted in Insurance Coverage, Insurance General
Insurance disclosure requirements have just become far more complex and onerous for parties that face litigation in New York state courts. In our January article (updated in February), we discussed the particulars of New York’s new Comprehensive Insurance Disclosure Act as it stood when the legislation was signed into law in late December 2021 and as … Continue Reading

Recent opinions provide support for insureds seeking coverage for BIPA claims

By John Vishneski and Andrew Barrios on Posted in Commercial General Liability, Employment Practices Liability, Insurance Coverage, Insurance General
Since the Illinois Supreme Court’s ruling that class actions alleging violations of the Illinois Biometric Information Privacy Act (“BIPA”) trigger general liability coverage, the focus of BIPA coverage litigation has shifted to the applicability of three exclusions often found in general liability policies: (1) the Employment Related Practices exclusion, (2) the Violation of Statutes exclusion, … Continue Reading

Guaranteed Rate v. Ace American Insurance – a victory for policyholders seeking coverage for government investigations

By Zachary S. Roman and Dominic Rupprecht on Posted in D&O, E&O, Professional Liability, Financial Insurance Coverage, Government investigations, Insurance Coverage, Insurance General
Government investigations by SEC, DOJ, and state attorney generals are a significant source of exposure for companies and their directors and officers. Companies can spend millions of dollars responding to a government subpoena or investigative demand. The broadly worded demands for information or testimony typically require extensive searches through mountains of paper documents and electronically … Continue Reading

D&O insurance to counter ESG litigation – new issues for insurers and policyholders

By Kya Coletta and Benjamin Fliegel on Posted in D&O, E&O, Professional Liability, Environmental, Insurance Coverage, Insurance General
Strong environmental, social and corporate governance (ESG) business policies are critical to address the fluctuating, unprecedented risks in this changing climate. Any company planning to expand and thrive in the next few decades must evaluate its collective conscientiousness for social and environmental factors, including preparing for the social and market upheavals resulting from greenhouse gas … Continue Reading

“Illinois’ ‘targeted tender’ rule – a powerful strategy for insureds to select and deselect triggered policies to maximize coverage

By Evan Knott and Andrew Barrios on Posted in Insurance Coverage, Insurance General
Businesses with liability insurance coverage governed by Illinois law should be mindful to take advantage of Illinois’ “targeted tender” rule, which provides insureds a unique strategy for maximizing insurance recoveries for claims triggering multiple different policies. This rule recognizes an insured’s right to “target tender” one or more concurrent insurance policies from a group of … Continue Reading

Responding to a cyber-related business interruption: best practices

By Brian Himmel and Andy Moss on Posted in Business interruption, Cyberliability, Insurance Coverage, Insurance General
One of the top issues facing business today is the risk of business interruption resulting from a cyber-related attack. Regardless of the form of attack – ransomware, denial of service, data theft, or other form of malware – any resulting failure of an organization’s network systems can have severe consequences, financial and otherwise. These may … Continue Reading

The duty to defend requires an early judgment

By Benjamin Fliegel on Posted in Business interruption, Commercial General Liability, Construction Coverage, Corporate and Transactional Insurance Coverage, Cyberliability, Employment Practices Liability, Financial Insurance Coverage, Insurance Coverage, Insurance General
If an insurance company owes a duty to defend, the dispute should be decided promptly, on the pleadings. Any delay undermines the duty to defend. The scope of the duty to defend should be adjudicated on the pleadings as quickly as possible to give policyholders the true value of their policies and the benefit of … Continue Reading

“Mind the gap”: Guarding against unintended gaps in coverages

By Max Louik, Dominic Rupprecht and Andrew Kintner on Posted in Employment Practices Liability, Insurance Coverage, Insurance General
As a recent decision from the Eleventh Circuit highlights, when purchasing insurance for workplace bodily injuries, policyholders need to be mindful of how all of their policies fit together, keeping an eye out for policy language that insurers may exploit to manufacture unexpected and unintended gaps in coverage. Covering the workplace Typically, employers seek three … Continue Reading

Lessons from Merck v. Ace: A cyberattack does not amount to an ‘act of war’

By David Cummings and Andy Moss on Posted in Cyberliability, Insurance Coverage, Insurance General
Cyberattacks continue to grow in sophistication and frequency, with attackers targeting businesses of all industries and sizes with seeming impunity. In the wake of this ongoing pervasive and indiscriminate threat, corporate risk departments are taking measures to assess cyber risks and update network security and protocol in hopes of staying one step ahead of potential … Continue Reading

“Occurrences” in COVID-19 business interruption litigation

By Matthew B. Weaver on Posted in Business interruption, COVID-19, Insurance Coverage, Insurance General
Nearly two years into the COVID-19 pandemic, the battles over threshold business interruption coverage issues like the presence of physical loss or damage, causation, and the applicability of policy exclusions continue to rage.  Results have been mixed, with insurers notching wins in federal courts, and policyholders faring better in state courts and in certain jurisdictions. … Continue Reading

D&O insurance for the cannabis industry

By Jake Ziering and Marc Hauser on Posted in Cannabis, D&O, E&O, Professional Liability, Insurance Coverage, Insurance General
Cannabis and the D&O market in 2022 In the early days of 2022, cannabis companies and investors have cause for guarded optimism. The once very real specter of federal intervention in the burgeoning industry seems to have faded into the background as successive presidential administrations have declined to push the issue, and now, all but … Continue Reading

NY’s new comprehensive insurance disclosure law is in flux

By Ann Kramer on Posted in Insurance Coverage, Insurance General
On December 31, New York’s Governor Kathy Hochul signed into law a change to the insurance disclosure requirements that applies to all civil cases filed in New York state’s courts. CPLR section 3101(f).  The new statute by its terms applies to both pending cases and new filings, with continuing disclosure obligations through appeals, and places … Continue Reading

Representations and warranties insurance: I have a breach; what’s next?

By Jessica Brown and John Vishneski on Posted in Insurance Coverage, Insurance General, Representations and Warranties Insurance
When acquiring another entity, many companies purchase representations and warranties (R&W) insurance to cover losses due to breaches of representations and warranties in purchase agreements. These R&W policies may apply in excess of a seller indemnity or, if the acquired entity has been resold, there may be separate lines of coverage for multiple acquisition agreements … Continue Reading

New York’s exception allowing attorney’s fees for policyholders

By Esther Kim and John Berringer on Posted in Commercial General Liability, Insurance Coverage, Insurance General
An often-overlooked 2020 New York federal court decision allows policyholders to potentially recover attorneys’ fees when they bring a declaratory judgment action against an insurance company that has made litigation inevitable by resisting its duty to defend. In Houston Casualty Company v. Prosight Specialty Insurance Company, 462 F. Supp. 3d 443, 444 (S.D.N.Y. 2020), the … Continue Reading

Year in review: Reed Smith’s Insurance Recovery team highlights top insurance topics of 2021

By Jalen Brown and Ashley Jordan on Posted in Cyberliability, D&O, E&O, Professional Liability, Insurance Coverage
At Reed Smith, we pride ourselves on forming true partnerships with our clients to find creative and unexpected solutions to the most challenging insurance coverage issues. As part of this commitment, we have authored a column for Thomson Reuters to provide advice, strategies, and information on the full range of insurance coverage issues affecting commercial … Continue Reading

Labels, Shmabels: Recent Decisions Confirm No “Restitution / Disgorgement” Exclusion in Management Liability Policies

By Kathryn Bayes and Courtney Horrigan on Posted in D&O, E&O, Professional Liability, Financial Insurance Coverage, Insurance Coverage
Ever since the Seventh Circuit’s 2001 decision in Level 3 Communications, Inc. v. Federal Insurance Co., 272 F.3d 908 (7th Cir. 2001), insurance companies have argued that settlements constituting restitution or disgorgement are uninsurable on grounds of public policy. While numerous decisions since 2001 have undercut this defense, two recent decisions out of the New … Continue Reading

End to long-running dispute over uninsurability under D&O insurance

By Christopher Kuleba and Matthew B. Weaver on Posted in D&O, E&O, Professional Liability, Financial Insurance Coverage, Insurance Coverage
Putting an end to a 12-year-old dispute between J.P. Morgan Securities’ predecessor, Bear Stearns & Co., and several of its insurers, on November 23, 2021, New York’s high court held that J.P. Morgan’s $140 million payment to the Securities and Exchange Commission (SEC) did not constitute an uninsurable “penalty” under J.P. Morgan’s excess directors & … Continue Reading

Employment-related practices exclusions and Biometric Information Privacy Act litigation

By Andrew Barrios and John Vishneski on Posted in Commercial General Liability, Employment Practices Liability, Insurance Coverage
In West Bend Mutual Insurance Co. v. Krishna Schaumburg Tan, Inc., 2021 IL 125978, the Supreme Court of Illinois held that coverage existed for a class action alleging violations of the Illinois Biometric Information Privacy Act (BIPA) under the terms of a general liability policy. Although a win for the policyholder bar, the precedential value … Continue Reading
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