Hunton Insurance Recovery Blog

A recent article published by Securityroundtable.org highlights the vulnerabilities businesses face in a world of e-commerce and interconnectivity, and how proper planning through a tailored cybersecurity program that includes - among other components - appropriate insurance coverage for cyber risks can help prevent a successful attack and mitigate the financial impact should one occur. Whether the issue is prevention or risk mitigation, cybersecurity should be at the top of the corporate agenda. As discussed in the Securityroundable.org article, Lisa Sotto, chair of the ...

Homeowners and businesses are beginning the painful recovery process following the devastating fires in California. Insurance money will be critical to that process. Read Lorie Masters' and Michael Levine's article in Law360 about how you can protect your right to access those critical funds.

On Tuesday, the U.S. District Court for the District of New Jersey granted Travelers’ motion to dismiss Posco Daewoo America Corporation’s suit for coverage under the computer fraud provision of its crime insurance policy.  Distinguishing itself from precedent like Medidata, Principal Solutions Group, Apache and American Tooling Center, Daewoo did not seek coverage for money fraudulently transferred or stolen from its own accounts.  Instead, Daewoo sought coverage for amounts that had been designated for payment to Daewoo by a third party supplier, Allnex, and stolen from Allnex after a criminal impersonated a Daewoo employee.  The Court held that the crime policy did not cover the lost sums because Daewoo did not “own” the money stolen from Allnex.

In a recent Client Alert, Hunton & Williams insurance attorneys Lorelie Masters, Michael Levine, and Geoffrey Fehling discuss the importance of reviewing historical liability insurance policies and the potential benefit these policies can have on minimizing exposure to environmental hazards. In Cooper Industries, LLC v. Employers Insurance of Wausau, et al., No. L-9284-11 (N.J. Super. Ct. Law Div. Oct. 16, 2017), a New Jersey trial court held that an electrical products manufacturer was entitled to coverage rights under commercial general liability policies issued to a predecessor company for environmental remediation costs stemming from a U.S. Environmental Protection Agency cleanup of a 17-mile stretch of the Passaic River in New Jersey.

In its third quarter report, insurer Beazley reported a nine-fold increase in social engineering attacks (i.e., deception-based fraud/crime) as compared to the same time last year.  So far, the majority of social engineering attacks in 2017 were focused on the professional services sector (18%), followed by financial institutions (9%), higher education (9%) and healthcare (3%).  The report also notes continued high rates of unintended disclosure via employee negligence across all sectors (29%), second only to affirmative hacking or malware attacks (34%).

With Brexit approaching in March 2019, uncertainty remains over whether Britain and Brussels will reach an agreement to ensure that UK insurers can continue to pay out on policies after Britain leaves the European Union.  The uncertainty tied to Brexit serves as a broader warning to policyholders about the potential pitfalls that can occur when large-scale political or economic change occurs, and how that change can impact an insurer’s indemnity obligations under a pre-existing contract.  In the case of Brexit, it remains unclear whether UK and EU regulators will permit the ...

Last week Bloomberg Law launched an online “cyber insurance suite” authored by Hunton attorneys, Walter J. Andrews, Sergio F. Oehninger, and Patrick M. McDermott. The online suite, available here and to Bloomberg subscribers, covers all aspects of cyber insurance, including identifying the major cyber risks and liabilities, applying for and obtaining cyber insurance coverage, and submitting claims under cyber coverages. It also contains an overview of case law evaluating coverage for cyber liabilities under traditional insurance policies and under cyber specific ...

In Universal Cable Productions LLC, et al. v. Atlantic Specialty Insurance Co., No. 2:16-cv-04435 (C.D. Cal. Oct. 6, 2017), the United States District Court for the Central District of California held that a “war” exclusion barred insurance coverage for losses arising from NBCUniversal’s decision to postpone and relocate production of its action-thriller miniseries Dig, due to an armed conflict between Israel and Hamas.  During the conflict, Hamas and other militant groups fired over 4,000 rockets and mortar shells into Israel, forcing NBCU to halt filming in Jerusalem and move production to Croatia and New Mexico.

A California state court recently rejected an excess insurer’s attempt at an early exit from litigation over whether it owes coverage for cyber liabilities. In that case (previously summarized here), the policyholder, Cottage Health, suffered a data breach resulting in the disclosure of patients’ private medical information. Subject to a reservation of rights, Cottage Health’s primary insurer, Columbia Casualty, paid millions of dollars to help respond to the data breach and to defend and settle a class action lawsuit filed against Cottage Health. Cottage Health’s excess insurer was Lloyd’s.

Earlier this week, Canada’s transport minister announced that a drone had collided with a commercial aircraft, the first confirmed collision of its kind in North America. Thankfully, the aircraft sustained only minor damage and was able to land safely. But this recent incident, which many commentators believed was inevitable given the proliferation of consumer and commercial drones, highlights the potential risks associated with drone operations.