Hunton Insurance Recovery Blog

Hunton & Williams' Insurance Coverage lawyers Syed Ahmad, Andrea DeField and Jennifer White were featured in the Firm’s Recall Roundup, where they discuss recent noteworthy decisions on insurance coverage for product recalls:

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.

Bear Stearns' insurers were recently dealt a fatal blow, when the trial court granted Bear Stearns' motion for summary judgment and denied all insurers' motions (and defenses). See J.P. Morgan Sec. Inc. v. Vigilant Ins. Co., 2017 N.Y. Slip Op. 27127, 11 (N.Y. Sup. Ct. 2017). The court found that the documentary and testamentary evidence presented by Bear Sterns overwhelmingly demonstrated that Bear Stearns' misconduct profited their customers instead of resulting in Bear Stearns' own "ill-gotten gains." The court also found the settlement amounts reached by Bear Stearns in the SEC action and the private civil suits to be reasonable.

The RIMS 2017 Annual Conference & Exhibition is just around the corner.  Visit members of Hunton & Williams LLP’s Insurance Coverage Team at Booth #2421 to learn more about our legal services.

"Before the Court is, once again, the classic case of the insurer requesting relief from the consequences of the inartfully drafted, yet plain, terms of its insurance policy." So begins the Eleventh Circuit's recent opinion in Liberty Surplus Ins. Corp. v. Norfolk Southern Railway Co., No. 16-14767, 2017 WL 1228550 (11th Cir. April 4, 2017), where the court held that the unambiguous language of Liberty's "Completed Work" exclusion did not bar coverage for injuries sustained by a motorist injured at a railroad crossing who later sued Norfolk Southern.

Hunton & Williams insurance partner Syed Ahmad was recently quoted in Law360 regarding a recent trend in judicial decisions favoring policyholders. Ahmad addresses an apparent trend by courts to refuse to allow technical violations to void coverage under complex insurance policies. A link to the Law360 article containing Ahmad’s comments can be found at 5 Insurance Rulings You May Have Missed In The 1st Quarter.

Attorneys Syed Ahmad and Jennifer White contributed to the Hunton Retail Law Resource’s “Recall Roundup” for the month of March with a discussion a new cases in the world of recall-related insurance coverage litigation, including a new case filed by a policyholder against its insurance broker alleging that the broker was liable for misrepresentations in the electronic application that led the insurer to rescind coverage.  Check out the blog post here.

Product recalls are on the rise in many industries. As regulatory and consumer protection standards are getting tougher, product supply chains are becoming more complex. This increases the risk of errors, defects and contamination at all levels of operation. Too often, these problems do not manifest themselves until after a product hits the market. All of this can lead to staggering expenses for food and product manufacturers facing the risks and realities of product recalls.

A California appellate court has affirmed a finding that a property insurer acted in bad faith when it searched for a reason to deny coverage for a fire loss and conducted an incomplete and non-objective investigation, even though the carrier subsequently paid the claim. The decision in Saddleback Inn, LLC v. Certain Underwriters at Lloyd’s London, No. G051121 (Cal. App. 4^th, Mar. 30, 2017, which can be found here, illustrates the principle that an insurer’s conduct should be determined based on what the carrier knows when it refuses to pay the claim, and that subsequent developments cannot be used to salvage prior bad faith conduct.

While there’s no simple formula for determining what, and how much, cyber liability insurance is necessary for a given company, a few simple inquiries can make a big difference.  My colleague Syed Ahmad, along with Eileen Garczynski (senior vice president and partner at insurance brokerage Ames & Gough), recently published an article for Mealey’s Data Privacy Law Report on critical questions for companies seeking to protect company assets through cyber insurance.  Their article is available here