The U.S. Supreme Court’s ruling in Dobbs v. Jackson Women’s Health Organization and its progeny have sparked confusion and uncertainty for individuals, medical providers, and employers with respect to the consequences of providing, seeking, or facilitating abortion care. Moreover, for both medical providers and employers, questions arose as to whether and how liability insurance might help alleviate these risks.

Now that a year has passed since the Dobbs decision, it is worth revisiting the liability landscape, as well as the question of how insurance coverage might play a role in providing relief with respect to the ongoing risk of litigation.

Background

The Dobbs decision, which held that access to abortion care is no longer a constitutionally protected right, raised a host of questions as to whether medical providers and employers might face civil or criminal liability for facilitating access to abortions, particularly in states that responded by enacting a panoply of restrictions in response to Dobbs. This uncertainty was heightened by inevitable litigation concerning the viability of the new statutes and has led to widespread confusion in many states. This confusion has been exacerbated by the Centers for Medicare & Medicaid Services (“CMS”), which initiated investigations into hospitals in Missouri and Kansas, asserting that they were in violation of the law by failing to offer necessary, life-saving abortion services.Continue Reading One year after Dobbs: Are medical providers and employers still at risk for lawsuits stemming from abortion access, and should they consider the role of liability coverage?

Cybercrime, including ransomware, is one of the top challenges facing organizations today. Businesses across the globe are suffering staggering cyber-related losses, losing around $60 billion on cyber crime annually.  

We are excited to launch our thought leadership campaign, “Cyber Insurance claims: Minimize risk, maximize recovery,” which provides a comprehensive look into the key issues relating to cyber insurance and ransomware claims and how clients can minimize their risk and maximize their recovery before and after a cyberattack.Continue Reading Cyber insurance claims: Minimize risk, maximize recovery

In a world of uncertainty, few things in life are more guaranteed than liability insurers reflexively rejecting claims for pre-notice defense costs, even where there is no legitimate or principled basis to do so. In a perfect world, insureds would immediately notify their insurers as soon as a claim or suit arises to avoid insurers refusing to pay or credit pre-notice defense costs. But companies operating in the real world for various reasons sometimes investigate and defend claims or suits before formally notifying their insurers.  In that circumstance, insurers should not be permitted to avoid their coverage obligations for so-called “pre-tender” defense costs for each of the following reasons.

Many courts only require notice to the insurer – not “magic words” or a formal “tender” – to trigger an insurer’s defense obligations

Insurers often argue their defense obligations only arise after the insured formally “tenders” or specifically requests a defense of a claim or suit, even though many courts have flatly rejected this premise. E.g., White Mountain Cable Constr. Corp. v. Transamerica Ins. Co., 631 A.2d 907, 910 (N.H. 1993) (“in order for an insured to tender the defense to the insurer, it need only put the insurer on notice of the claim”). Indeed, many courts correctly have held that the insurer’s defense obligations are triggered upon receipt of “actual notice” from any source – even if not directly from the insured seeking coverage. E.g., Cincinnati Cos. v. West Am. Ins. Co., 701 N.E.2d 499, 505 (Ill. 1998) (“the insurer’s duty to defend is triggered by actual notice of the underlying suit”).  Absent specific policy language or legal precedent to the contrary, insureds should not be required to formally “tender” or request a defense to obtain the benefit of its coverage once the insurer is on notice of the claim or suit – particularly where the insurance policy delegates the duty to defend to the policyholder rather than the insurer.Continue Reading Maximizing recovery of pre-notice defense costs: Considerations for policyholders

For insurance recovery attorneys, one of the more frustrating ways for a policyholder to lose coverage for a property loss is on the basis of late notice. Property insurance policies generally require the policyholder to give the insurance company “prompt notice” of claims and potential claims. Property policies may specify a timeframe in which the policyholder must give notice, but in many cases do not. New York courts routinely hold that short delays, even as little as one to two months, suffice as a basis to deny coverage where the policy has “prompt notice” requirements. Under New York law, however, an insurance company can waive its late notice defense by not raising it explicitly when it finally disclaims coverage. Indeed, recently, a federal court in New York court rejected the insurance company’s late notice defense, even where the policyholder conceded that it did not provide prompt notice as a matter of law, because the insurance company failed to explicitly deny coverage on that ground.

Summary of recent New York federal court decision

In Mave Hotel Investors LLC v. Certain Underwriters at Lloyd’s London, the plaintiffs (“Mave”) sought coverage for property damage at its hotel following the termination of its contract with a human services organization housing formerly homeless families with children at the hotel. No. 21-cv-08743 (JSR), 2023 U.S. Dist. LEXIS 62718 (S.D.N.Y. Apr. 10, 2023). Mave alleged that its rooms were damaged while the families were living there. The insurer, Certain Underwriters at Lloyd’s London (“Lloyds”), ultimately denied coverage the ground that any damage was caused by ordinary wear and tear, an excluded cause of loss. At trial, however, Lloyd’s moved for summary judgment, arguing among other things, late notice.Continue Reading An insurance company’s generic reservation of right can lead to a Waiver of a Late Notice Defense

Courts continue grappling with the application of California insurance law to COVID-19 business interruption claims. After three years of insurance claims and litigation, the California Supreme Court has agreed to provide guidance as to whether the actual or potential presence of SARS-CoV-2 on insured property can qualify as physical loss of or damage to property in Another Planet Entertainment, LLC v. Vigilant Insurance Company.

District court proceedings

Another Planet operates and promotes concerts, events, and festivals in California and Nevada. After its insurer denied coverage for business income losses incurred, Another Planet filed suit in California federal court seeking coverage under its “all-risk” property insurance policy.

In its amended complaint, Another Planet alleged that the virus was present or would have been present had it not closed its venues in compliance with government orders. The insured further alleged that droplets of the COVID-19 virus physically altered the air and property surfaces, constituting physical loss or damage and rendering the property unusable for its intended purpose and function. The pleading further asserted that minimizing the spread of COVID-19 requires physical alterations, including physical distancing, regular disinfection, air filtration, and installation of physical barriers.      

Vigilant Insurance moved to dismiss on the basis that Another Planet had not sufficiently alleged direct physical loss or damage to property. On June 21, 2021, the District Court granted the insurer’s motion and dismissed the case with prejudice. Continue Reading California Supreme Court to offer guidance for COVID-19 coverage cases

Cyber incidents and attacks, whereby hackers target companies for ransom, to obtain sensitive information, or for other reasons, are a significant and growing threat. In 2021 alone, cyber incidents caused roughly $6 trillion in losses, and the consensus is that the threat of incidents will remain strong. Corporations are increasingly seeking insurance against this risk, but coverage for cyber incidents is still a relatively new and rapidly changing field. In this post, we focus on key considerations for general counsel, chief technology officers and cyber security officers when it comes to cyber insurance and protecting against cyber risk.

Does my company need cyber insurance?

Getting cyber insurance is a unique business decision for each company weighing a variety of factors, but virtually every company faces risks from cyber incidents. Although cyber breaches involving customer or consumer data tend to get the most attention, even companies that collect no sensitive customer or consumer information may fall prey. For one thing, companies may possess private, sensitive information about their employees, including medical or pension information. Moreover, companies may have proprietary information or trade secrets that hackers would want to get their hands on.

In fact, many dangerous and costly cyber incidents actually do not involve the theft of sensitive personal information, because the risk of disclosure of any data of value to a company may be used as extortion leverage. Ransomware can encrypt a company’s data and information systems, and attackers then demand a ransom from the company to restore access. Finally, companies may be targeted as a means of obtaining access to the systems of third parties doing business with the targeted company, which may expose the target to liability to those parties as well as its own incident response and data restoration costs. This explains why the risk is so widespread.Continue Reading Key questions corporate tech, legal, and security officers need to ask when considering cyber coverage

On the heels of last year’s special session on Florida’s property insurance crisis, which, among other things, eliminated one-way fee shifting in property insurance cases, the Florida Legislature has now passed even more aggressive pro-insurer legislation as part of a broader tort reform bill aimed at addressing “frivolous” litigation. House Bill 837 is not limited to property insurance issues, and instead includes various measures aimed at protecting insurance companies from liability for bad faith conduct and prevailing party attorney fees across all kinds of coverage disputes. HB 837 raises several important issues for policyholders and insurance litigation overall going forward. We discuss some of these issues below.

Fee-shifting allowed only in certain declaratory judgment actions

First, HB 837 appears to extend last year’s fee-shifting repeals to all lines and types of insurance coverage disputes, not just property insurance disputes, while creating a new limited fee-shifting statute for certain kinds of insurance disputes brought as declaratory judgment actions. This would allow for fee-shifting in declaratory judgment actions brought after an insurer has made a “total coverage denial.” The phrase “total coverage denial” is not defined, but according to the bill, would not include situations where a liability insurer provides a defense under a reservation of rights. The bill does not say whether an insurer who also claims a right to reimbursement for defense costs paid on the insured’s behalf effectively seeks a total denial of coverage.Continue Reading Key issues for policyholders under Florida’s new tort reform bill 

Corporations embroiled in coverage disputes with their D&O insurers may be in the unenviable position of having to bring a lawsuit to enforce their rights. One of the first considerations the corporation faces is where it should file its coverage action. Some may assume that they are limited to the jurisdiction where the corporation principally operates or is headquartered, where its D&O policy was “issued” (often the same jurisdiction as it principal place of business), or where the underlying insured matter is centered. But if the corporation is incorporated in Delaware (which many obviously are), then bringing the action in Delaware is an important additional option that the corporation would be well-advised to consider. Of course, this option begs some important questions.    

Why would a corporation principally operating outside of Delaware want to bring its coverage action in Delaware, particularly when that may mean giving up its “home field advantage” or incurring additional costs to litigate in a distant jurisdiction? Continue Reading D&O coverage dispute? Don’t forget about the Delaware option

The landscape of biometric privacy litigation already has changed dramatically in 2023. Last month, the Illinois Supreme Court ruled in Tims v. Black Horse Carriers, Inc., 2023 IL 127801, that claims for violations of the Illinois Biometric Information Privacy Act (BIPA) (which allows individuals to sue companies directly for the wrongful collection or disclosure of their biometric data) are subject to a five-year statute of limitations. Later that month, in Cothron v. White Castle System, Inc., 2023 IL 128004, the court ruled that a BIPA violation accrues each time an individual’s data is improperly collected or shared, not merely the first time. Taken together, these rulings significantly broaden the scope of claims facing companies that have violated BIPA and the damages flowing from such violations.

In recognition of the dystopian risks presented by the rampant, unlawful sharing of biometric data, several more states are jumping on Illinois’ bandwagon, attempting to pass BIPA-like laws. According to Bloomberg, legislation proposed in nine other states also would grant a private right of action to individuals whose biometric data was wrongly collected or shared.

Despite the growing threat of civil litigation related to the mishandling of biometric data, there is a silver lining for corporate policyholders: the opportunity to obtain insurance coverage for biometric privacy liability has never been greater.Continue Reading Key considerations for policyholders after landmark biometric privacy decisions reshape insurance landscape

As a general rule, if a policyholder reasonably attempts to settle a case for an amount at or within the limits of its insurance policy, the insurance company must put the policyholder’s interests above its own. Typically, if the insurance company does not accept a reasonable settlement within limits, then it may be responsible for a judgment amount in excess of the policy limits if the insurance company’s refusal to settle was unreasonable. The insurance company’s failure to settle may result in a bad faith claim. But what if the insurance company refuses to settle and the policyholder prevails at trial? According to a federal district court in New Jersey, if the insurance company’s decision not to settle was unreasonable, it may still be liable for bad faith.

Summary of recent New Jersey federal court decision

BrightView Enterprise Solutions, LLC v. Farm Family Casualty Insurance Company, No. 20cv7915 (EP) (AME), 2023 U.S. Dist. LEXIS 20764 (D.N.J. Feb. 7, 2023) is not your typical bad faith “failure to settle” case. It involved three different companies that were insured under a single commercial general liability insurance policy issued by Farm Family. The three companies were involved in a project to overhaul an irrigation system at a Bank of America branch in New Jersey. A Bank of America employee “slipped and fell” on a puddle of water and hit her head. The injured employee filed suit against all three companies, alleging that her “slip and fall” caused a permanent disability. Farm Family agreed to defend and provide coverage for all three defendants up to its $1 million policy limit.Continue Reading An insurance company’s refusal to settle can be bad faith, even if the policyholder ultimately prevails at trial