Hunton Insurance Recovery Blog

It happens every year. A clearly covered loss occurs and for one reason or another, the policyholder delays in notifying its insurer of the loss. Usually, the cause for the delay is innocent. It may even appear to be justified, such as where the insured prioritizes steps to save its property, inventory or assist dependent customers. But no matter the reason, insurers can be hard-lined in their refusal to accept an untimely claim. This is especially true in states that presume prejudice to the insurer, or where the insurer need not show prejudice at all.

This year, like last, the National Oceanic and Atmospheric Administration predicts an extremely active hurricane season. As we write this post, the Gulf Coast, Mid-Atlantic, New York, and New England regions are still recovering from the devastation Ida has left in her path. Now is the time to ensure your insurance program is hurricane-ready. As reported in the client alert linked below, our insurance coverage team provides critical steps that you should take now to ensure that you protect your assets and maximize recovery in the unfortunate event of a hurricane claim.

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Just as the Ohio and Delaware supreme courts gear up for oral argument – September 8th and 22nd, respectively – on whether insurers must defend opioid distributors in lawsuits related to the opioid crisis, Hunton Andrews Kurth Partner Syed Ahmad weighed in with the policyholders’ prospective for Law360. “These appeals are significant,” Ahmad explained (and insurers’ counsel agreed), “because of the potential far-reaching impact on the scope of general liability coverage.”

Hunton insurance attorney, Latosha Ellis, along with Hunton product liability and mass tort attorneys Elizabeth Reese and Alexandra Brisky Cunningham, recently published an article in Risk Management discussing key lessons from Peloton’s Tread+ Recall.

A federal court in New York denied an insurer’s attempt to dismiss a coverage dispute, rejecting the insurer’s contention that the individual insured directors were “necessary” parties. The insurer argued that, because the outcome of the coverage suit could jeopardize the directors’ indemnity and thereby implicate the D&O policy’s Side A coverage for non-indemnified losses, the directors had an indispensable interest in the litigation. The court disagreed.

The coverage dispute in LRN Corp. v. Markel Insurance Co., 1:20-cv-08431 (S.D.N.Y. Aug. 23, 2021), arose from an underlying lawsuit in the Delaware Chancery Court brought by an LRN shareholder against the company and three of its directors. The plaintiff in the underlying lawsuit alleged that a self-tender offer by LRN to acquire shares of LRN’s common stock was coercive and part of a scheme that was in part orchestrated by the LRN’s directors. LRN, though dismissed from the underlying lawsuit, continued to pay legal fees for the named directors.

The Superior Court of Delaware held that a directors and officers liability insurer must advance defense costs to a mortgage broker targeted in a federal government investigation of alleged False Claims Act violations. In Guaranteed Rate, Inc. v. ACE American Insurance Company, No. N20C-04-268 MMJ CCLD (Del. Sup. Ct. Aug. 18, 2021), Guaranteed Rate received a Civil Investigative Demand from federal authorities in June 2019 regarding the company’s underwriting and issuance of federally-insured mortgage loans. Eleven days later, Guaranteed Rate provided notice of the CID under a private company management liability policy issued by ACE American Insurance Company.

The Seventh Circuit has reversed a lower court’s decision to dismiss a lawsuit against Federal Insurance Company and a health insurance technology company for unauthorized robocalls soliciting the sale of health insurance. The court emphasized that the complaint, which alleged the two companies were vicariously liable for the calls, pled sufficient detail to move forward.

A Delaware Superior Court judge recently upheld a policyholder’s preferred forum in Delaware, denying five insurers’ motion to dismiss or stay the Delaware coverage action filed after the insurers had filed suit preemptively in Texas. The court in CVR Refining, LP v. XL Specialty Insurance Co., No. N21C-01-260 EMD CCLD, 2021 WL 3523925 (Del. Super. Ct. Aug. 11, 2021), held that, although the insurers (XL Specialty, Twin City Fire, Allianz Global Risks US, Argonaut, and Allied World) filed suit three days before the insureds, both suits were filed “contemporaneously” under Delaware law and that the insurers had failed to demonstrate any “overwhelming hardship” necessary to dismiss the case. The court also found that, since the insurers were all licensed to do business in Delaware, they could not show overwhelming hardship. Thus, the policyholder’s preference to litigate its insurance claims in Delaware must stand.

A California federal district court recently denied an insurer’s motion to dismiss a manufacturer’s insurance coverage suit on the grounds that an “unfair competition” exclusion barred coverage for a suit that alleged violations of the Colorado Consumer Protection Act. The court allowed the suit to proceed because the exclusion did not clearly, explicitly, and unambiguously apply to the product liability suit alleged against the manufacturer. The decision in Arovast Corporation v. Great American E&S Insurance Co., No. SACV 21-596-CJC (C.D. Cal. Aug. 2, 2021) highlights the broad range of activities that can be found in “unfair competition,” “antitrust,” and similar exclusions and how they can be cited as grounds to deny coverage in a variety of contexts beyond the anti-competitive claims those labels may suggest to most policyholders.

We are proud to share that Hunton Andrews Kurth insurance coverage Partner Andrea (Andi) DeField and Counsel Cary D. Steklof were recently recognized as 2021 Legal Elite Up & Comers in Florida Trend magazine. Florida Trend invited all in-state members of the Florida Bar to name attorneys whom they highly regard or would recommend to others. Only the top 111 attorneys were recognized for their leadership in the legal field and in the community. Andi and Cary are both well deserving of this honor and the award reflects their dedication to providing excellent legal services.