When the COVID-19 Pandemic incepted, and issues arose as to whether affected policyholders could seek Business Income and Civil Authority coverage from the presence or suspected presence of SARS-CoV-2 and consequent orders of Civil Authority, I thought that the easiest question to answer was whether such policyholders had suffered physical loss or damage (“PLOD”) to
ECB USA v. Chubb: How the use of linguistics in insurance coverage disputes creates risks and uncertainty for corporate policyholders
Introduction
The Eleventh Circuit Court of Appeals’ recent decision in ECB USA, Inc. v. Chubb provides several important lessons for corporate policyholders faced with potential coverage issues arising from their consulting or professional services.
The issue in ECB was whether Chubb’s professional services liability policy applied to claims against an accounting firm for a faulty
Recovering financial losses caused by the CrowdStrike outage
In what is described as the largest cyber loss event in years, on Friday, July 19, 2024, customers of CrowdStrike and many others throughout the world discovered that they could not access critical software and enterprise systems to run their businesses.
The mass outage was due to a defective CrowdStrike software update. The outage notably
Hit by a hurricane? You may have more coverage than you think
Hurricane Beryl has caused destruction in the Caribbean, Mexico and Texas. Continuing issues include power outages, both rolling and continuous, issues regarding access to clean water, severed communications, roads that remain impassable and issues accessing necessities like food and fuel.
Hurricanes cause dramatic damage to businesses and commercial properties every year, totaling some $9 billion
Drafting errors must be clear and obvious – a brief look at the English Court of Appeal’s decision in Project Angel Bidco Ltd (In Administration) v Axis Managing Agency Ltd [2024 EWCA Civ 446]
Key Take-aways
- The wording in insurance policies is often taken from precedent wording that has evolved over time. Accordingly, we often see inconsistencies in the wording of policies and/or ambiguity in the provisions setting out the scope of cover. There are often many different interpretations that can be applied to inconsistent wording in a policy,
Subrogation – The limits on stepping into someone else’s shoes
In this post, we take a look at an insurer’s right to subrogation – the mechanism that allows them to step into the shoes of the insured – and how, in particular circumstances, that right can be restricted.
We look first at how subrogation applies where there are joint or co-insureds, depending on the specifics
A blast from the past – unearthed: Court of Appeal dismisses University of Exeter’s appeal
In 1942, the Luftwaffe dropped a 1000kg high-explosive bomb onto farmland in the outskirts of Exeter.
Some 82 years later, the Court of Appeal has dismissed the University of Exeter’s appeal against the High Court decision in Allianz Insurance Plc v University of Exeter (see our previous commentary) The Judge at first instance (HHJ Bird) had found that damage to halls of residence caused by the bomb’s controlled detonation was not covered under the University’s insurance policy with Allianz.Continue Reading A blast from the past – unearthed: Court of Appeal dismisses University of Exeter’s appeal
Delivery by drone? Insurance needed!
Online retailers have changed the way we shop. No longer do we spend hours in line queuing for a can opener or, perhaps more appropriately in current times, an air fryer. Nowadays, at the click of a button, we have items expeditiously delivered straight to our door. And soon, it will be straight to our door without a human touch.
Last year, certain retailers began trialling drone delivery, marking the dawn of a new era of deliveries.
This latest development is one the insurance market cannot ignore. The drone insurance market is growing, and it looks like it will continue to do so as technology develops and retailers rely on drones to deliver parcels.Continue Reading Delivery by drone? Insurance needed!
Expanding the “Four Corners” rule through constructive amendment
The “Four Corners rule” (a.k.a. the “Eight Corners rule”) is the foundation for many states’ common law regarding the Duty to Defend under liability policies. Under that regime, the court treats “the underlying complaint and the insurance policy” as “the only documents relevant” to deciding whether an insurer owes the policyholder a duty to defend. Badger Mining Corp. v. First Am. Title Ins. Co., 534 F. Supp. 3d 1011, 1020 (W.D. Wis. 2021); 1 General Liability Insurance Coverage § 5.02 (5th ed.) (providing a “50-State Survey: Duty to Defend Standard: ‘Four Corners’ or Extrinsic Evidence?”).
The rule presents a problem for policyholders when the complaint’s allegations do not raise a duty to defend on their face, however, during the course of the litigation, it becomes apparent that claims that do give rise to a duty to defend are, in fact, at issue. If the case is pending in federal court, policyholders can assert the “constructive amendment doctrine”; that is, that the complaint has been effectively amended to include the unpleaded claims and, therefore, the insurance company should provide a defense.Continue Reading Expanding the “Four Corners” rule through constructive amendment
A win for Walmart! An Arkansas court finds insurers have a duty to defend certain prescription opioid liability lawsuits
On December 29, 2023, an Arkansas court in the case of Walmart, Inc. v. ACE Am. Ins. Co., 04CV-22-2835-4, 2023 WL 9067386, (Ark. Cir. Ct. Dec. 29, 2023) found that defendant insurers owe Walmart a duty to pay or reimburse defense costs that Walmart incurred while defending prescription opioid liability lawsuits.
Like many in the pharmaceutical supply chain, Walmart is a defendant in thousands of lawsuits filed by state and local government entities acting in their parens patriae capacity. These lawsuits allege that Walmart knowingly, recklessly, or negligently caused bodily injuries, like addiction, death, and property damage, by failing to monitor, detect and report suspicious orders of prescription opioids. In 2022, Walmart entered into a “National Settlement” that resolved many of those governmental suits. The settlement reimbursed costs the government plaintiffs alleged they incurred for treating its citizens’ bodily injury and property damage. Walmart sought defense and indemnity coverage from AIG and other insurance companies providing excess coverage under its general liability policies. The insurers denied coverage.Continue Reading A win for Walmart! An Arkansas court finds insurers have a duty to defend certain prescription opioid liability lawsuits