Hunton Insurance Recovery Blog

A state-appointed panel advised last week that California should change the standard for determining whether utilities are liable for wildfires.  Under the current system, California’s Public Utilities Code § 2106 provides a private right of action by any person or entity that has suffered loss, damages, or injury caused by prohibited or unlawful acts of a public utility.  Relying on this statute, property owners have asserted wildfire-related claims directly against allegedly culpable electric utility companies.  Public utilities in California also face inverse condemnation claims arising out of wildfires.  Under inverse condemnation, where private property is taken for public use and later damaged by the state or its agency, the state or agency is strictly liable to the property owner.

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 May 13, 2019 decision by the US Supreme Court in Apple, Inc. v. Pepper has brought antitrust concerns, and the insurance issues they raise, front and center.  While Apple, Inc., of course, is a publicly traded company, private companies can also fall victim to these issues and need to look to coverage for protection.  For a discussion of these issues, we repost the article by Hunton Andrews Kurth LLP partner Lorie Masters, insurance broker Marsh and others, which analyzes these often complex issues.  “Optimizing Antitrust Coverage in Private Company D&O Policies,” published by ...

A federal court in Pennsylvania has held that Liberty Mutual must defend its insured, Hershey Creamery Company, in an intellectual property infringement lawsuit because the suit raises claims that potentially implicate coverage under the policies’ personal and advertising injury coverages. The court further found that the alleged wrongful conduct was not subject to the policies’ IP infringement exclusion.

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.

The Scott Fetzer Co. v. Zurich American Insurance Co. matter involved a dispute over coverage for sexual assault claims against Fetzer. Three women filed suit against Fetzer, claiming that John Fields, an independent dealer of vacuums manufactured by Fetzer, verbally and sexually assaulted them. Fetzer’s alleged liability was premised on, among other things, its negligence in supervising its independent contractor’s hiring process. Fetzer settled with each of the three women.

The cancellation of the first day of music mogul Pharrell Williams’s inaugural Something In the Water Music Festival (SITW) in Virginia Beach, Virginia due to stormy weather is a recent reminder of the importance of securing event cancellation and business interruption insurance to mitigate the significant economic risks posed by outdoor events.^[1]

Upper Deck Co. has sued its general liability insurer, Liberty Mutual Fire Insurance Co., in California federal court last week, alleging that Liberty Mutual failed to satisfy its defense obligations in an antitrust lawsuit brought against Upper Deck by rival trading card maker Leaf Trading Cards LLC. According to the complaint, Liberty Mutual agreed that the allegations in Leaf’s suit triggered coverage under Upper Deck’s policy and acknowledged its duty to defend and Upper Deck’s right to independent counsel. However, Liberty Mutual stopped paying the defense fees of one of the firms Upper Deck hired, and also failed to pay the fees of a different firm.

The Hunton Andrews Kurth insurance recovery team secured a victory for firm client, The Children’s Place (“TCP”), obtaining a ruling from a New Jersey federal court in The Children’s Place, Inc. v. Great Am. Ins. Co., 2019 WL 1857118 (D.N.J. Apr. 25, 2019), in which the court allowed TCP to seek insurance coverage for a “social engineering scheme” that defrauded the company of $967,714.29.

Hunton Andrews Kurth insurance recovery partner, Lorie Masters, received a top “Band 1” ranking by Chambers and Partners in the Insurance: Policyholder category for the District of Columbia, and a “Band 2” ranking in the Insurance: Dispute Resolution: Policyholder – USA – Nationwide category.