Hunton Insurance Recovery Blog

As discussed in a recent client alert, on March 24, 2023, Florida Governor Ron DeSantis signed House Bill (HB) 837 into law, making it more difficult and costly for insurance policyholders of all sizes to sue insurers for bad faith by eliminating fee-shifting for most policyholders and requiring something “more than” negligence for bad faith claims.

Hurricane Ian is rapidly approaching the west coast of Florida and is expected to make landfall as a Category 4 hurricane near the Tampa area within the coming days. While the exact track is still being determined, there is a chance the storm may also impact insureds in Georgia and South Carolina. Now is the time to activate your disaster plan and ensure that you have your relevant insurance policies in your possession and that you review them for critical deadlines. 

We put together an alert here with tips to help you and your business mitigate potential storm loss and maximize coverage.

The ...

Hunton insurance attorneys, Walter Andrews, Andrea DeField, and Sima Kazmir, recently published an article in the Daily Business Review, discussing the scrutiny that companies face as a result of increased cyberattacks as well as tips for your next cyber insurance renewal.

A recent U.S. Treasury Department report noted that through June 30, 2021, the total value of suspicious activity associated with ransomware transactions was $590 million. The standalone cyber insurance industry has grown to address this pervasive risk. These major shifts in the cyber landscape mean that ...

The 2021 Chambers and Partners rankings for Georgia insurance recovery practices and lawyers are out and Hunton Andrews Kurth has received top honors.  The rankings include Hunton Andrews Kurth’s Insurance Recovery practice and partners Lawrence J. Bracken II and Michael S. Levine, with all receiving Band 1 honors – the organization’s top-tier ranking.  “The top-level ranking of our practice in Georgia, and the work that Larry and Mike bring to our clients in Georgia, specifically, is emblematic of the work our team is doing nationwide,” said Insurance Recovery Practice Head, Walter J. Andrews.  “The Firm and I could not be more proud,” he added.

Is it illegal for an insurer to pay the ransom demanded in a cyber extortion or ransomware attack on its insured? According to the US Department of the Treasury’s Office of Foreign Assets Control’s (“OFAC”) October 1, 2020 advisory (“OFAC Advisory”), in certain situations, it may be.

As Texas and Louisiana brace for Hurricane Laura to make landfall, policyholders in the affected regions should be making last minute preparations to ensure their properties are covered in the storm’s wake.

On August 18, 2020, the United States Court of Appeals for the Eleventh Circuit affirmed a District Court’s 2018 ruling that Sparta Insurance Company need not cover a south Florida restaurant’s lost income and extra expenses resulting from nearby road construction. But, in doing so, the appeals court appears to deviate from even its own understanding of “direct physical loss” under controlling Florida law.

As previously reported on the Hunton Employment & Labor Perspectives Blog, workers’ compensation provides the exclusive remedy for injuries and illness that employees suffer arising out of and within the course of their employment.   Workers’ compensation provides the exclusive remedy for injuries and illness that employees suffer arising out of and within the course of their employment.  In the early stages of this pandemic, work-related travel to high impact countries or work-related exposure in a case that was being tracked by public health authorities provided support for work-related exposure.  In healthcare settings, work-related exposure will likely be established when exposure to infected patients occurs.  But in other settings and as the diseases spreads in the United States, the analysis about whether an illness is covered by workers’ compensation will be more difficult.

A Maryland federal court awarded summary judgment last week to policyholder National Ink in National Ink and Stitch, LLC v. State Auto Property And Casualty Insurance Company, finding coverage for a cyber-attack under a non-cyber insurance policy after the insured’s server and networked computer system were damaged as a result of a ransomware attack.  This is significant because it demonstrates that insureds can obtain insurance coverage for cyber-attacks even if they do not have a specific cyber insurance policy.

A New York federal court denied AIG Specialty Insurance Company’s (“AIG”) motion to dismiss breach of contract and bad faith claims in a lawsuit filed by SS&C Technology Holdings, Inc. (“SS&C”). SS&C alleges that AIG breached its contract by failing to cover losses stemming from a cyber incident in which hackers duped the company out of millions of dollars.

The Eleventh Circuit recently found that an insured had not paid enough to satisfy its policy’s deductible and would thus be required to pay more before coverage would be available. The court’s holding turned on the meaning of a “tenants and neighbors” provision that extended coverage, but only for claims arising in countries that apply a civil law system. As explained below, this ruling underscores the value of retaining experienced coverage counsel to identify potential gaps and deficiencies in coverage.

In January we wrote about Rosen Millennium Inc.’s (“Millennium”) appeal to the Eleventh Circuit, whereby Millennium took the position that a Florida federal court ignored well established Florida insurance law when it ruled that St. Paul Fire & Marine Insurance Co. had no duty to defend it against a multimillion dollar claim arising out of a 2016 cybersecurity breach.

Puerto Rico’s dire insurance situation more than a year after Hurricane Maria remains a constant reminder of why policyholders must diligently pursue their property and business interruption claims in the immediate aftermath of a storm.  The numbers are staggering.  On an island the approximate size of Connecticut, Hurricane Maria caused an estimated $100 billion in damage.  According to the Office of the Insurance Commissioner of Puerto Rico, the hurricane resulted in more than 287,000 insurance claims.  Roughly 11,000 of those claims, representing an estimated $2 billion in losses, remain unresolved.

The Federal Financial Institutions Examination Council (“FFIEC”), a U.S. governmental body comprised of banking regulators, recently issued guidance to financial institutions directing them to consider implementing dedicated cyber insurance programs to offset financial losses resulting from cyber incidents. Financial institutions face a number of potentially crippling risks arising from cyber incidents, including financial, operational, legal, compliance, strategic, and reputational risks resulting from fraud, data loss, or disruption of service. While cyber insurance can mitigate these risks, it is not required by financial regulators, and thus many financial institutions may not have obtained such insurance specifically designed to cover their cyber risks.  Nonetheless, the FFIEC now is urging financial institutions to include dedicated cyber insurance as part of a multi-faceted cyber risk management strategy and not to rely solely on traditional insurance.  In addition, the FFIEC is recommending that financial institutions have their outside advisors review their potential cyber insurance coverage to ensure that it will cover the relevant risks.

A recent ruling by U.S. District Judge Paul Byron of the Middle District of Florida has made clear that the actual words used in an insurance contract matter. The court, in Mt. Hawley Insurance Co. v. Tactic Security Enforcement, Inc., No. 6:16-cv-01425 (M.D. FL. 2018), denied an insurance company’s motion for summary judgment attempting to rely on an exclusion to deny coverage to its policyholder.  The policyholder, Que Rico La Casa Del Mofongo, operated a restaurant establishment in Orlando, Florida, and sought coverage for two negligence lawsuits filed against it for allegedly failing to prevent a shooting and another violent incident on its premises.

As we have previously written, students accused of hazing can obtain coverage under a parent’s homeowners’ policy. See our prior post. A recent New York decision provides the latest example.

A Florida state court has awarded over $5.5 million to singer Gloria Estefan’s hotel company in a lawsuit against Landmark Insurance Company because the insurer wrongly refused to cover building code-related upgrade costs after two 2004 hurricanes, Hurricane Frances and Hurricane Jeanne, severely damaged the hotel property. The case is Pin-Pon Corp. v. Landmark American Ins. Co., No. 312009CA0122-44 (Fla. 19th Cir. Ct. Dec. 28, 2017).

The U.S. District Court for the Middle District of Florida, in Innovak International v. The Hanover Insurance Co., recently granted summary judgment in favor of Hanover Insurance Company finding that it had no duty to defend Innovak against a data breach lawsuit. Innovak, which is a payroll service, suffered a breach of employee personal information, including social security numbers. The employees then filed suit against Innovak alleging it had negligently created a software that allowed personal information to be accessed by third parties. Innovak sought a defense for the lawsuit from its commercial general liability carrier, Hanover Insurance Company. Innovak argued that the employee’s allegations triggered the personal and advertising injury coverage part of the policy, which covers loss arising out of the advertising of the policyholder’s goods or services, invasion of privacy, libel, slander, copyright infringement, and misappropriation of advertising ideas. The court disagreed and found the employees’ allegations did not involve a publication that would trigger coverage under the commercial general liability policy.

In an article that first appeared in Electric Light & Power, Hunton & Williams attorneys Sergio F. Oehninger and Paul T. Moura discuss the growing Electric Vehicle (EV) industry and the risks posed due to the consequential strain on the power grid. As they explain, demand and investment in EVs will likely spur greater demand for supercharging stations that consume significant amounts of electricity. Urban centers and real estate owners are also expected to increase the supply of these stations in order to make these areas more attractive and accessible to EV owners, drone operators, and autonomous vehicle fleets. All of this growth will put increasing demands on electricity supply that can be difficult for businesses to control, leading to grid outages that can cause an interruption in business operations, an inability to access or restore system data, and significant losses of business income. All of this raises the question—Can businesses count on their insurance coverage to respond to the risks posed by EVs?

In the wake of the continued aftermath from Hurricane Irma, Georgia Tech and Central Florida have decided to cancel their game, scheduled for this upcoming Saturday in Orlando. The cancellation joins a long and growing list of games cancelled due to hurricanes in recent weeks. Last weekend alone, Florida State and Louisiana Monroe; Miami and Arkansas State; South Florida and Connecticut; and Florida and Northern Colorado all had to scratch their contests due to the impending arrival of Hurricane Irma. The week before, Hurricane Harvey forced UTSA and Houston to cancel their game, while BYU and LSU had to relocate their game from Houston to New Orleans.

Policyholders are often surprised to hear that their policies cover more than the run-of-the-mill claim. For example, a general liability policy may cover a cyber-related loss. See our prior post. As a more recent example, a federal court in South Carolina found that a parent’s homeowners’ policy obligated an insurer to defend a college student against hazing allegations. Allstate Ins. Co. v. Ingraham, No. 7:15-cv-3212 (D.S.C. Mar. 14, 2017).

Cyber and crime insurance policies have been heavily recommended to address the growing prevalence and types of cyber risks.  Walter Andrews and Jennifer White recently authored an article appearing in Risk Management discussing how the purchase of cyber and crime insurance policies alone is not enough to successfully manage these risks. These policies must be carefully evaluated and tailored to the particulars of each organization. The full article is available here. In the article, Andrews and White identify four key questions that every organization must ask when purchasing ...

Globalization has inspired the development of cross-border business activities, as companies across several industries seek new markets for their goods and services.  The dynamic rewards have been accompanied by a corresponding increase in novel risks, and those who rely on traditional risk assessment mechanisms have often been left unnecessarily exposed.

Globalization has inspired the development of cross-border business activities, as companies across several industries seek new markets for their goods and services.  The dynamic rewards have been accompanied by a corresponding increase in novel risks, and those who rely on traditional risk assessment mechanisms have often been left unnecessarily exposed.

Judges – Not Juries – Award Attorney’s Fees In Virginia Bad Faith Cases, FC&S Legal
November 10, 2015

In REVI, LLC v. Chicago Title Insurance Company, the Virginia Supreme Court held that a trial judge, rather than a jury, should determine whether an insured is entitled to attorney’s fees as a result of the insurer’s bad faith.

Tapping Corporate Predecessors’ Liability Insurance Policies Just Became Easier Following Fluor Ruling, Westlaw Journal Insurance Coverage, volume 26, issue 2
October 15, 2015

In a landmark decision, the California Supreme Court on August 20, 2015, held that enforcing an anti-assignment clause in an insurance policy as a bar to coverage – where the assignment occurred post-loss – was contrary to California Insurance Code Section 520, which provides that consent-to-assignment clauses are invalid if invoked after a loss has happened.  See Fluor Corp. v. Superior Court ...