Hunton Insurance Recovery Blog

California law has become more favorable toward companies facing liabilities based on alleged events spanning multiple years. Previously, California intermediate appellate decisions favored “horizontal exhaustion,” which means that in cases involving a continuous loss, a first-level excess policy that sat over a primary policy could not be accessed until the applicable limits of any other underlying collectible insurance had been exhausted.

But now the California Supreme Court has ruled that vertical exhaustion applies to determine how a policyholder can access its excess insurance policies. Truck Ins. Exch. v. Kaiser Cement, 16 Cal.5th 67 (2024) (“Kaiser”). This means that the excess policy for a policy period can be accessed as soon as the underlying primary policy for that same period is exhausted. There is no need to wait for other years’ policies to be exhausted.

In a recent article published in PropertyCasualty360, Hunton attorneys Syed S. Ahmad, Scott P. DeVries and Yosef Itkin examined the Kaiser decision in more detail. In short, the court found support for its decision relying on the language of the excess policies, along with the policyholder’s reasonable expectations and the history of “other insurance” provisions.

The Eleventh Circuit recently confirmed the rule that “other insurance” clauses should not be used to disadvantage policyholders. Nat’l Cas. Co. v. Georgia Sch. Bd. Ass’n - Risk Mgmt. Fund, No. 22-13779, 2023 WL 5977299, at *1 (11th Cir. Sept. 14, 2023). In a dispute between an insurance company and a public risk management fund, both insurance policies included “other insurance” clauses stating that each insurer would only provide excess insurance coverage where the policyholder is covered by other insurance. The district court found that the clauses were irreconcilable because both insurance policies could not provide only excess insurance coverage—at least one policy would need to provide primary coverage. Because of the conflict, the Georgia federal district court applied Georgia’s irreconcilable-clauses rule and held that each policy must provide coverage to the policyholder on a pro rata basis. The Eleventh Circuit affirmed the district court’s application of Georgia’s irreconcilable-clauses rule.

When obtaining insurance coverage, businesses must be wary of policy exclusions that are so broad that they defeat the policy’s primary purpose and render coverage illusory. In Travelers Property Casualty Company of America v. H.E. Sutton Forwarding Co., LLC, No. 2:21-CV-719-JES-KCD, 2023 WL 5486746 (M.D. Fla. Aug. 24, 2023), the U.S. District Court for the Middle District of Florida considered this very issue in deciding when a policy exclusion goes too far.

Harvard’s years-long battle with Zurich Insurance Company has finally ended. As our colleagues wrote in October 2022, Harvard already learned its lesson once when a court ruled that Zurich did not have coverage obligations after the university failed to provide timely notice of a lawsuit under its claims-made-and-reported insurance policy. Earlier this week, the First Circuit provided Harvard with a new volume explaining why it—and policyholders generally—should provide timely notice of claims to their insurers. The First Circuit’s decision in President & Fellows of Harvard Coll. v. Zurich Am. Ins. Co., No. 22-1938, 2023 WL 5089317 (1st Cir. Aug. 9, 2023) is but the latest high-profile reminder about the importance of adhering to notice requirements, including with respect to excess insurers, in claims-made-and-reported insurance policies.

Law360 recently published a roundup of the biggest general liability rulings in the first quarter of 2022. As part of that roundup, it discussed Omega Protein, Inc. v. Evanston Insurance Company, which the Mississippi Supreme Court decided in January 2021. And it quoted Hunton Partner and practice group leader Syed Ahmad’s analysis of the opinion.

A New Mexico court recently granted judgment on the pleadings against an insurer and found coverage, reminding the insurer that different words in a policy, indeed, have different meanings.

In Power of Grace, LLC v. Weatherby, Power of Grace, a policyholder, sued its insurer, Hudson Insurance Companies, and its insurance agent, Weatherby-Eisenrich Inc.  Power of Grace alleged that Weatherby and Hudson were liable for damages it might incur in an underlying wrongful death lawsuit arising from a tractor-trailer accident.

Earlier this month, current and former Boeing Company directors agreed to a $237.5 million settlement to resolve claims that they ignored safety issues concerning Boeing’s 737 MAX aircraft. While the settlement, which came quickly on the heels of the Delaware Chancery Court’s September denial of the defendants’ motion to dismiss, ranks as one of the largest derivative settlements of all time, the silver lining for the directors and officers named in the suit is that the entire settlement is to be funded by the company’s D&O insurers. The Boeing case is yet another example of the necessity for public companies to purchase sufficient D&O liability coverage, particularly “Side A” insurance coverage, to protect officers and directors implicated in derivative claims, securities class actions, enforcement actions, and similar claims. Because many states, including Delaware, prohibit companies from indemnifying officers and directors for payments made to the company in settlement of stockholder derivative claims or other suits brought on behalf of the company, securing Side A coverage to protect individuals for non-indemnified loss is essential.

Priority of coverage disputes can arise where different insurers for different insureds cover the same claim. Generally, competing insurers will compare the “Other Insurance” clauses of their policies to decide who should cover the claim first. But where one of the insureds owes contractual indemnity to the other, the indemnity obligation may govern. Thus, the insurer for the insured who owes indemnity may cover the claim first, even if it would have been excess per the “Other Insurance” clauses. Such was the case in Cent. Sur. Co. v. Metro. Transit Auth., et al., No. 20-1474-CV, 2021 WL 4538633, at *1 (2d Cir. Oct. 5, 2021).

While total False Claims Act recoveries decreased in 2020, FCA litigation and investigations are expected to continue to rise under the Biden administration, driven in part by the DOJ opening 250 new FCA investigations and actions in 2020, which is the highest number of new matters since 1994. As recent decisions show, the good news is that companies incurring legal fees defending against government investigations or negotiating settlements with regulators to resolve FCA claims may be able to look to D&O coverage to mitigate those losses. One such company recently prevailed in its $10 million claim against an excess D&O insurer following the insurer’s improper refused to contribute its policy limits to an FCA settlement with the DOJ. The Illinois federal court decision, Astellas US Holdings, Inc. v. Starr Indemnity & Liability Co., No. 17-cv-08220 (E.D. Ill. Oct. 8, 2021), which focuses on whether $50 million of Astellas’s settlement payment to the DOJ was covered “Loss” under the D&O policy, provides useful guidance for companies facing potential FCA exposures.

On March 3, 2021, the Delaware Supreme Court issued a landmark decision holding that Delaware law should be applied in disputes over directors and officers liability (“D&O”) insurance policies sold to companies incorporated in Delaware. RSUI Indem. Co. v. Murdock, et al. No. 154, 2020, C.A. No. N16C-01-104 CCLD (Del. Mar. 3, 2021). The court addressed this and other key issues in the long-running dispute over D&O insurance purchased by Dole Food Company, specifically addressing issues raised by Dole’s eighth-layer excess insurer, RSUI, which provided $10 million coverage excess of $75 million.

The court decided multiple important issues, finding that liability for alleged fraud is insurable under Delaware public policy, RSUI’s Profit/Fraud Exclusion did not bar coverage because there had been no “final adjudication” of fraud, and the “larger sums rule” governed allocation issues. However, among these important rulings, the most significant may be the Supreme Court’s ruling that Delaware governs the interpretation of D&O insurance issued to a company incorporated in Delaware.  The court specifically rejected the insurer’s arguments that California law (which might preclude coverage) should apply under a policy that was purchased and issued in California to a Delaware corporation headquartered in California.

The First Circuit recently held that a “Special Hazard and Fluids Limitation Endorsement” was ambiguous and therefore there was excess coverage for a fuel spill that occurred after a tanker-truck overturned.

In Performance Trans. Inc. v. General Star Indem. Co., the First Circuit reversed the District Court’s grant of summary judgment in favor of General Star Indemnity Company. The District Court held that the excess policy General Star issued to Performance Trans. Inc. precluded coverage for a spill that resulted in the leaking of thousands of gallons of fuel. The District Court relied on the existence of a total pollution exclusion to bar coverage and held that the policy’s Special Hazards and Fluids Limitation Endorsement could not create an ambiguity that would afford coverage.

The Fifth Circuit recently rebuffed an attempt by Chubb subsidiary Ace American Insurance Co. (“Ace”) to evade liability from its excess insurer, Zurich North America subsidiary American Guarantee & Liability Insurance Co. (“AGLIC”), after Ace unreasonably rejected a settlement offer within its policy limits in violation of its Stowers duty. See Am. Guarantee & Liab. Ins. Co. v. ACE Am. Ins. Co., 19-20779, 2020 WL 7487067 (5th Cir. Dec. 21, 2020). As a result, Ace must now pay approximately $7.27 million in damages to AGLIC to cover its costs to settle the underlying lawsuit plus prejudgment interest and court costs.

Hunton insurance attorneys Syed Ahmad and Geoffrey Fehling provide several updates on recent recall insurance disputes in the latest edition of the Recall Roundup, posted on the Hunton Retail Law Resource Blog.

A federal judge has denied an insurance company’s motion to dismiss the claims of another insurer seeking reimbursement and contribution for the $15 million it paid to settle underlying claims arising from a product recall.

A New York appeals court recently granted partial summary judgment in favor of the insureds, finding that excess directors and officers insurers, Westchester Fire Insurance Co., Aspen American Insurance Co. and RSUI Indemnity Co., must advance the defense costs for former executives of the insured entity. The decision is the most recent victory for policyholders in connection with D&O insurance claims asserted in the wake of alleged securities violations and accounting fraud at related real estate investment firms, which have resulted in millions of insurance recoveries for the company and its officers and directors (as previously reported here and here).

Hunton Insurance attorneys Syed Ahmad and Geoffrey Fehling provided several updates on recent recall insurance disputes in the most recent edition of the Recall Roundup, posted on the Hunton Retail Law Resource Blog.

Real estate investment trust VERIET, Inc. (formerly known as American Realty Capital Properties) announced this week that it agreed to a $765.5 million settlement to resolve shareholder class action and related lawsuits arising from a host of alleged securities violations and accounting fraud at ARCP since the company went public in 2011. Defendants in the class action settlement have agreed to pay more than $1 billion in compensation, including millions from ARCP’s former manager and principals, chief financial officer, and former auditor.

California’s highest court held yesterday in Pitzer College v. Indian Harbor Insurance Co., that the state’s insurance notice-prejudice rule is a “fundamental public policy” for the purpose of choice of law analyses. This unanimous ruling, issued in response to certified questions from the Ninth Circuit, confirms and emphasizes California’s common law rule that policyholders who provide “late notice” may proceed with their insurance claim, absent a showing by the insurer of substantial prejudice. The California Supreme Court also extended the prejudice ...

On August 19, 2019, a Texas appellate court reversed a trial court’s summary judgment in favor of an excess carrier, and ruled as a matter of law that an arbitration award in favor of a former officer was covered under the EPL component of a management liability policy.  In doing so, the court rejected the carrier’s reliance on an Insured v. Insured exclusion.  The court also looked to the policy’s definition of “Interrelated Wrongful Acts,” a concept typically relied on by carriers to deny or limit coverage, to sweep a variety of allegations within the scope of the policy’s EPL insuring agreement and an exception to the Insured v. Insured exclusion.

On August 6, 2019, Hunton Andrews Kurth insurance lawyers Walter J. Andrews and Daniel Hentschel discussed the effect of eroding insurance policies in an article appearing in Florida’s Daily Business Review. The full article is available here. In the article, the authors discuss the potential risks associated with the use of eroding insurance policies and the obligations that the use of such policies imposes upon insurance companies based on their control over the policyholder’s liability defense ...

A Louisiana court recently denied an excess insurer’s bid for summary judgment, finding that the insurer’s interpretation of a pollution exclusion would lead to “absurd results.”

A Delaware court held that an appraisal action, which includes $39 million in attorneys’ fees, prejudgment interest, and costs incurred in defending litigation that arose out of Solera Holdings Inc.’s acquisition by Vista Equity Partners LP, constitutes a covered “securities claim” under Solera’s directors and officers liability insurance policy.

The City of Baltimore is the latest victim of increasingly common ransomware attacks. On May 7, 2019, unidentified hackers infiltrated Baltimore’s computer system using a cyber-tool named EternalBlue, developed originally by the United States National Security Agency to identify vulnerabilities in computer systems. However, the NSA lost control of EternalBlue, and since 2017, cybercriminals have used it to infiltrate computer systems and demand payment in exchange for relinquishing control. For instance, in Baltimore, the hackers have frozen the City’s e-mail system and disrupted real estate transactions and utility billing systems, among many other things. The hackers reportedly demanded roughly $100,000 in Bitcoin to restore Baltimore’s system. The city has refused to pay.

The Delaware Superior Court ruled that insurers could not rely on Written Consent and Cooperation clauses in directors and officers liability insurance policies to avoid coverage for settlements by Dole Food Company, Inc. (“Dole”) in shareholder disputes involving fraud in a go-private transaction.

In Zurich American Insurance Co. v. Don Buchwald & Associates, Inc., 2018 N.Y. Slip. Op. 33325(U) (Sup. Ct. N.Y. County, Dec. 21, 2017), the Supreme Court of New York held that Zurich was obligated to defend a talent and literary agency against claims brought by Hulk Hogan alleging that the agency aided and abetted one of its agents—Tony Burton—in publishing racist and sexual footage of Hulk Hogan online.  The decision also gives ammunition to policyholders seeking to recover their fees incurred while litigating against an insurer’s improper denial of coverage.  The court found that the insureds had “been cast in a defensive posture” due to the insurer’s claims seeking a declaratory judgment, and that this justified a fee-shifting award.

The Second Circuit has ruled a claim alleging an “offer for sale” infringed on a patent constitutes an advertising injury sufficient to trigger a defense under commercial general liability insurance.  In High Point Design LLC v LM Insurance Corporation, the plaintiff High Point brought a declaratory-judgment action against Buyer’s Direct, Inc. after the latter directed High Point to cease-and-desist in the sale of its Fuzzy Babba slippers.  Buyer’s Direct responded with a counterclaim alleging trade dress infringement, claiming that High Point’s offers for sale in retail catalogs infringed on Buyer’s Direct’s own slipper trade dress.  Buyer’s Direct sought discovery of all advertising, marketing and promotional materials related to High Point’s fuzzy footwear to substantiate its claims.

The Fifth Circuit in Evanston Insurance Co. v. Mid-Continent Casualty Co. recently held that multiple collisions caused by the same insured driver over a span of 10 minutes constitute a single occurrence subject to a $1 million limit in the insured’s primary policy with Mid-Continent. The holding reversed a lower court’s ruling that Mid-Continent is liable for an additional sum the excess insurer, Evanston, paid to resolve all of the claims arising from the collisions. At issue, a fundamental question about causation and coverage under commercial liability insurance.

A Georgia Court of Appeals judge recently ruled that Scapa Dryer Fabrics was entitled to $17.4 million worth of primary coverage from National Union Fire Insurance Company of Pittsburgh, PA for claims of injurious exposure to Scapa’s asbestos-containing dryer felts. Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Scapa Dryer Fabrics, Inc., No. A18A1173, 2018 WL 5306693, at *1 (Ga. Ct. App. Oct. 26, 2018). Scapa sought coverage under five National Union policies issued from 1983–1987. The 1983, 1984 and 1985 National Union policies had limits of $1 million per occurrence and $1 million in the aggregate. The liability limits for the 1986 and 1987 renewal policies were amended by endorsement to $7.2 million. Scapa sought to recover the full $17.4 million from all five policies. National Union argued that a “Non-Cumulative Limits of Liability Endorsement” in the 1986 and 1987 policies limited Scapa’s recovery to only $7.2 million. Scapa sued National Union and its sister company, New Hampshire Insurance Company (from which Scapa purchased excess liability coverage), in Georgia state court.

A New York district court has held that an insurer must provide coverage under three excess insurance policies issued in 1970 for defense and cleanup costs incurred by Olin Corporation in remediating environmental contamination at seven sites in Connecticut, Washington, Maryland, Illinois, New York, and Washington. Seven of the remaining sites at issue presented questions of fact for trial, with only one site being dismissed due to lack of coverage.

Two recent decisions addressing allocation of long-tail liabilities demonstrate that resolution of the issue under New York law depends upon the policy language at issue. Judge-made rules on “equity” and “fairness” do not control.  As the New York Court of Appeals held on March 27, 2018, in Keyspan Gas East Corp. v. Munich Reinsurance America, Inc., 2018 WL 1472635 (2018), under New York law, “the method of allocation is covered for most by the particular language of the relevant insurance policy.” Both Keyspan and the April 2, 2018 decision in Hopeman Brothers, Inc. v. Continental Casualty Co., No. 16-cv-00187 (E.D. Va. Apr. 2, 2018), by the United States District Court for the Eastern District of Virginia, illustrate the importance of reviewing insurance policies - both before purchase, to ensure that they contain optimal language for coverage; and after claims arise, to ensure that the policyholder receives the benefit of insurance coverage under “legacy” and all other potentially applicable policies.

Earlier this month, the California Supreme Court agreed to review Montrose Chemical Corporation’s appeal from a September appellate court ruling that rejected Montrose’s preferred “vertical exhaustion” method of exhausting excess-layer policies in favor of a policy-by-policy review to determine which policies are triggered. The California high court’s grant of Montrose’s petition for review is potentially significant in clarifying the appropriate excess policy exhaustion trigger under California law, not to mention in addressing a significant insurer defense in Montrose’s longstanding coverage dispute over environmental insurance coverage, which has been winding its way through California courts for more than 25 years.

Whether a policyholder’s losses are “direct” or “indirect” can be coverage-determinative. Most financial institution bonds exclude “indirect” or “consequential” losses. A recent decision in Fed. Deposit Ins. Corp. v. Arch Ins. Co., No. CV C14-0545RSL, 2017 WL 5289547 (W.D. Wash. Nov. 13, 2017) addressed the issue of “direct” versus “indirect” losses in a dispute under a financial institution bond issued by Arch Insurance Company (Arch) to Washington Mutual Bank (WaMu). The court held that WaMu’s losses resulting from its purchase of fraudulent loans were “direct” losses, and that WaMu’s sale and contractual obligation to repurchase the fraudulent loans did not convert its losses from direct to indirect.

The interplay between primary and excess insurance is often litigated, especially in the context of settlements. On April 26, 2017, the First Circuit in Salvati v. Am. Ins. Co., 16-1403, 2017 WL 1488238, at *1 (1st Cir. Apr. 26, 2017) considered whether the settlement agreement entered into between plaintiff and the insureds/primary insurer was sufficient to trigger excess insurance coverage under the insured’s policy with American Insurance Company.

The Ninth Circuit in Teleflex Medical Incorporated v. National Union Fire Insurance Company of Pittsburgh PA, No. 14-56366 (9th Cir. Mar. 21, 2017) affirmed a jury verdict finding that AIG must pay $3.75 million in damages plus attorneys' fees to cover LMA North America, Inc.'s ("LMA's") settlement with its competitor over allegedly disparaging advertisements that characterized a competitor's products as unsafe.

On February 22^nd, Hunton insurance team partner Syed Ahmad and Mary Borja of Wiley Rein LLP will be speaking at the DC Bar’s CLE program “What Every Litigator Should Know About Insurance and How It May Impact Your Case Strategy.” The two hour class will discuss what steps an insured should take to protect claims, the role of insurance in defending and settling claims, and how to preserve attorney-client privileges. To learn more about the event, please visit: http://bit.ly/2k8SCQT.

Date and Time:
Wednesday, February 22, 2017 from 6 pm to 8:15 pm

Location:
D.C. Bar Conference ...

On February 3, 2017, members of Hunton & Williams’ insurance group, led by Insurance Practice Head Walter Andrews, and firm associate Anna Lazarus, achieved a significant victory in the Eleventh Circuit U.S. Court of Appeals, in Hillsborough County v. Star Insurance Co.  The 11^th Circuit’s published opinion, available here, addressed an issue of first impression under Florida law involving the impact of Florida’s statutory limitations on liability and an excess liability policy’s self-insured retention.  The decision provides substantial guidance under Florida law ...

On November 2, 2016, a federal judge in California ruled that a Real Estate Property Managed endorsement in policies issued to a real estate manager negated a standard policy exclusion, but also rendered the policies excess to other available insurance. The case involved a dispute over coverage for a bodily injury claim involving “Pigeon Breeders Disease,” allegedly contracted due to the insured’s failure to keep pigeons away from a condo complex’s rooftop HVAC units. The plaintiff sued the property owners, Jerry and Betty Lee, and the property manager, Sierra Pacific Management Co. Inc. (Sierra Pacific).

On November 9, 2016, my colleagues Syed Ahmad, Shawn Regan and Shannon Shaw, published an article in Corporate Counsel discussing a recent decision from New York’s highest court that may impact the exchange of information between policyholders and their insurers. The article addresses the impact of Ambac Assurance v. Countrywide Home Loans, in which the New York Court of Appeals held that an attorney-client communication disclosed to a third party during the period between the signing and closing of a merger will remain privileged only if the communication relates to a common ...

The Court of Appeals of Georgia recently found an excess insurer liable for environmental costs related to a leak in an insured’s pipeline.  In doing so, the court rejected the insurer’s argument that liability for the costs should be spread among policies issued by other insurers spanning nearly three decades.  The opinion is available here.

The Delaware Supreme Court ruled on Monday in a long-running dispute involving Viking Pump’s and Warren Pumps’ claims for recovery under primary, umbrella, and excess insurance. The Delaware high court had certified two questions to the New York Court of Appeals. The Delaware decision follows the New York high court’s ruling in May that the policies required “all sums” allocation and “vertical” exhaustion” (click here and here for prior posts).

A federal appeals court ruled on Wednesday that the absence of a duty to defend does not foreclose the potential for indemnity coverage under primary and umbrella liability policies. The decision in Hartford Casualty Insurance Co. et al. v. DP Engineering LLC, stems from a March 31, 2013, incident where an industrial crane collapsed at a nuclear generating facility near Russellville, Arkansas, causing significant damage and injuries, including one death.

Hunton & Williams' insurance practice head, Walter Andrews, was quoted in a Law360 article yesterday regarding the confusion that is likely to result from a federal bankruptcy judge's decision in Rapid-American Corp. v. Travelers Casualty and Surety Co., where the court concluded that a majority of excess insurers owe no coverage to Rapid-American Corp. for underlying asbestos claims until the company exhausts the limits of its underlying primary and excess coverage through actual payment, not just accrued liability. According the Andrews, "the public policy clearly ...

Two of three of Rapid-American Corp.'s excess liability insurers do not have to respond to underlying asbestos claims unless and until all underlying coverage is exhausted by the payment of claims, says Judge Bernstein of the United States Bankruptcy Court for the Southern District of New York in a June 7, 2016 decision. Rapid-American has been involved in asbestos litigation since 1974 and settled disputes with many of its underlying insurers, but an amount sufficient to reach its excess coverage policies has not yet been paid. Rapid-American argued that it was not necessary for the primary policies' underlying limits to be exhausted by actual payment before insurers' excess liability coverage attaches.

On May 27, 2016, the U.S. District Court for the Western District of Washington allowed a declaratory judgment action filed by the Seattle Times Company for excess coverage to proceed to trial despite the insurer's arguments that the underlying policies had not been exhausted.

As a follow-up to my post yesterday concerning the New York Court of Appeals' decision in In the Matter of Viking Pump, Inc. and Warren Pumps, LLC, Insurance Appeals, where the New York high court confirmed that policyholders may allocate all amounts of loss to a single policy and a single policy year, Syed Ahmad, a partner in our Insurance Coverage Counseling and Litigation team, was interviewed by Law360 about the decision's broad-ranging implications. As Mr. Ahmad explained in an article appearing today in Law360, titled NY Allocation Ruling Speeds Policyholders' Road To ...

On Tuesday, May 3, 2016, the New York Court of Appeals held that each of several excess liability insurers can be wholly responsible for the entire extent of their policyholders' asbestos liabilities.  The Court further held that "vertical" exhaustion would apply; rejecting the insurers' attempt to apply "horizontal" exhaustion before upper-layer policies must respond.  The decision, in In the Matter of Viking Pump, Inc. and Warren Pumps, LLC, Insurance Appeals, comes in response to two questions certified from the Delaware Supreme Court:

As the New York Times recently reported, Bill Cosby joins the ranks of celebrity homeowners who have tapped defense coverage under their ordinary homeowner’s insurance. Others who paved the way include Roger Clemens, O.J. Simpson, and Bill Clinton. Each had “enhanced personal injury clauses” buried in the fine print of their policies that can provide a defense against lawsuits.¹ Bill Cosby has such a policy, and a federal court in California recently denied American International Group’s (“A.I.G.”) request to allow A.I.G. to immediately appeal an earlier decision which held that a “sexual misconduct” exclusion in Mr. Cosby’s homeowner’s policy did not limit this coverage and that A.I.G., therefore, owed a duty to defend Mr. Cosby against a lawsuit brought in California state court by Janice Dickinson (“Dickinson action”).² In denying A.I.G.’s request for an interim appeal, the court determined that it would be more efficient for the Ninth Circuit to “analyze all exclusions of the policy at the same time.”³

With nearly 2000 locations, the recent outbreaks linked to Chipotle restaurants involving three strains of E. coli, norovirus and Salmonella, have had a substantial impact on the fast-food chain’s supply chain.  In a recent article appearing in Risk Management Magazine, The Chipotle Outbreaks Highlight the Risks of Supply Chain Failures, Syed comments on the insurance issues that are likely to arise, and the ways those issues might be affected by the post-event conduct of affected companies.

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.

On February 11, 2016, New York’s highest court held in Selective Ins. Co. of Am. v. Cnty. of Rensselaer, 2016 N.Y. Slip Op. 01001 (2016) that, in a class action alleging improper strip searches of arrestees over a four-year period, each improper strip search was a separate occurrence under the policies at issue, mandating a separate deductible per strip search. Significantly, although the issue in this case concerned application of per-occurrence deductibles, the same reasoning would apply if the issue had been over the number of applicable policy limits.

Hunton & Williams LLP attorneys Mike Levine and Matt McLellan, along with Tim Monahan of Lockton Companies, LLC., presented to a group of risk managers and insurance professionals on Wednesday evening, February 17^th, about strategies and pitfalls in the claim presentation process. The event was well-attended and the audience was lively with questions for the presenters. A copy of the PowerPoint can be downloaded here. Key points discussed with the group include:

A federal court in New York has held that an insurer carries the burden of demonstrating which, if any, defense costs should be allocated to the defense of non-covered entities. High Point Design, LLC v. LM Ins. Co., No. 14-cv-7878, 2016 WL 426594 (S.D.N.Y. Feb. 3, 2016). The court ruled that once the policyholder established that amounts were spent defending covered claims, the burden shifts to the insurer to show that certain of those amounts resulted from the defense of other claims against non-covered entities. To meet that burden, the insurer was required to show that the relevant costs would not have been incurred but for the non-covered claims.

On December 14, 2015, a federal court in California denied Evanston Insurance Company’s motion to dismiss Uber’s breach of contract and breach of the implied covenant of good faith and fair dealing claims. Evanston Insurance Company v. Uber Technologies, No. 15-cv-03988-WHA (Dec. 14, 2015). The case concerns Evanston’s duty to indemnify Uber for claims arising from two car accidents during which drivers were allegedly logged on to the Uber App.