McGuireWoods Insurance Recovery Blog

McGuireWoods Insurance Recovery Blog

Insights for Policyholders

Joshua Davey

Joshua Davey Josh co-chairs McGuireWoods’ insurance recovery practice group and represents policyholders in connection with claims and litigation under D&O, E&O, professional liability, CGL, cyber and other types of insurance policies.

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One Decision – Two Bad Precedents for Virginia Claimants

Uncategorized
The Fourth Circuit Restricts the Meaning of Direct Actions for purposes of Diversity Jurisdiction and Limits the Application of a Virginia Statute Meant to Protect Claimants when a Policyholder Fails to Provide Notice of a Claim Introduction In late February 2019, the Fourth Circuit issued an opinion detrimental to claimants seeking policy benefits under a… Continue Reading

Hurricane Florence Commercial Property Damage and Business Interruption Insurance Checklist

Property Insurance
Over the weekend, Hurricane Florence caused substantial damage in many communities in North and South Carolina. Early estimates put the damages from Florence in the billions of dollars.  These losses include both direct property damage as well as business interruption losses.  In addition, many businesses outside of the areas of storm damage may experience lost… Continue Reading

Sixth Circuit Finds Coverage Under Crime Policy for Business Email Compromise

Crime Insurance, Cyber Insurance, Policy Interpretation
For the second time in ten days, a federal appeals court ruled a crime insurance policy provides coverage for losses arising from a business email compromise.  In American Tooling Center, Inc. v. Travelers Casualty and Surety Company of America, No. 17-2014, 2018 WL 3404708 (Sixth Circuit July 13, 2018), the Sixth Circuit held that Travelers… Continue Reading

Hurricane Irma – Commercial Property Damage and Business Interruption Insurance Checklist

Uncategorized
Hurricane Irma was one of the most devastating storms in United States history, with sustained winds of over 190 miles per hour. Insurance industry experts have estimated the insured damages arising from this storm may reach $50 billion.  These losses include both direct property damage as well as business interruption losses.  In addition, many businesses… Continue Reading

Hurricane Harvey: Texas Property Owners Should File Written Claims Before Friday, Sept. 1, 2017

Best Practices, Property Insurance
Hurricane Harvey has devastated many parts of Texas. As Texans deal with the impact of the storm, policyholders need to be mindful of their rights. Effective Friday, Sept. 1, 2017, a new law under House Bill 1774 takes effect that governs Texas insurance claims. Specifically, there are differences in this new law that could affect… Continue Reading

Friday’s Massive Malware Attack – Cyber Insurance and the Importance of IMMEDIATE Notice to Insurers

Cyber Insurance
On Friday, May 12, 2017, a massive ransomware attack swept across the globe. As of the date of this post, the attack reportedly had infected more than 100,000 organizations in 150 countries. The attack continues to propagate in different and more malicious forms and it is likely some of our clients have been impacted. This… Continue Reading

Federal Court: Computer Fraud Provision Does Not Cover Fraudulent Debit Card Transactions Conducted Over the Telephone

Crime Insurance, Policy Interpretation
Last month, the Northern District of Georgia issued a strongly pro-insurer decision holding that a policy insuring computer fraud did not provide coverage for $11.4 million in fraudulent debit card redemptions made over the telephone.  In InComm Holdings, Inc. v. Great Am. Ins. Co., No. 1:15-cv-2671-WSD, 2017 WL 1021749 (N.D. Ga. Mar. 16, 2017), the… Continue Reading

Four Questions to Ask Before Renewing Your Policy

Best Practices, Risk Management
Most business insurance policies are issued with one-year policy terms, creating a natural opportunity for businesses, their counsel and risk managers to re-evaluate coverage each year at renewal time. Many companies fail to take advantage of this opportunity and simply renew their policies each year without considering whether their insurance needs – or the coverages… Continue Reading

Eleventh Circuit: Insurer Not Required to Reimburse Pre-Tender Defense Costs

Best Practices, Duty to Defend, Duty to Indemnify, Notice
It may seem obvious that policyholder defendants should immediately notify their liability insurance carrier whenever they are faced with potentially covered litigation.  Among other things, policyholders want the benefit of the insurer-paid defense their policy provides.  But for a variety of reasons, this does not always happen, and in some cases policyholders find themselves funding… Continue Reading

Insurance Coverage for Lost Profits Arising from Cyber Attacks on the U.S. Power Grid – Contingent Business Interruption Coverage for the Internet of Things

Business Interruption, Cyber Insurance
The Washington Post reported last week that Russian hackers had penetrated the U.S. utility grid through Burlington Electric Department, a Vermont utility.  Although the utility later clarified that the attacked computer was not connected to the grid and that the connection to Russia was not confirmed, hundreds of news sources picked up the story, demonstrating… Continue Reading

Avoiding the Minefields of Claims-Made Insurance Coverage

Best Practices, Policy Interpretation
This is the first in a series of posts relating to what we will call the “minefields” of claims made insurance coverage.  Fifty years ago, most insurers issued liability insurance policies on “occurrence” policy forms.  As insurers expanded their coverage offerings for professional and executive risks in the 1960s and 1970s, they began to use… Continue Reading

Fifth Circuit Narrowly Construes Prior Knowledge Exclusion in Claims-Made Policy and Affirms Bad Faith Verdict

Policy Interpretation, Professional Liability Insurance
Insurers frequently rely on “prior knowledge” exclusions in an effort to avoid coverage under claims-made liability insurance policies.  In OneBeacon Insurance Co. v. T. Wade Welch & Associates et al., the Fifth Circuit recently affirmed a $28 million judgment following a jury verdict against One Beacon Insurance Company, finding that the insurer had wrongfully declined… Continue Reading

D&O Insurance: Five Things Your Company’s Policy Might Cover Which Could Surprise You

Uncategorized
Most companies have Directors & Officers Liability (“D&O) insurance.  As the name of the policy suggests, these polices provide coverage for lawsuits against a company’s directors and officers for acts performed in the course of their duties.  But policyholders are sometimes surprised to learn that D&O policies may provide coverage in a number of other… Continue Reading

Best Practices for Getting Notice Right

Best Practices
All insurance policies have provisions requiring timely notification of a loss or claim to the insurance carrier. Commercial general liability policies, for example, provide that the policyholder “must see to it that we are notified as soon as practicable of an ‘occurrence’ or an offense which may result in a claim” and that “[i]f a… Continue Reading

Subcontractor’s Defective Work Covered Under CGL Policy, Iowa Supreme Court Holds

Construction Insurance, General Liability, Policy Interpretation
Last month, in a lengthy decision over the dissent of three justices, the Iowa Supreme Court joined the ranks of state high courts to conclude that defective work performed by a subcontractor is covered under the standard Commercial General Liability (CGL) policy held by almost all general contractors today. The case arose from the construction… Continue Reading

Fourth Circuit Affirms Denial of Coverage for Accidental Gunshot Injury

Duty to Defend, Duty to Indemnify, Policy Interpretation
On April 14, the Fourth Circuit held that an insurer owed no defense or indemnity coverage for an underlying personal injury suit against the policyholder’s employee, a security guard who accidentally shot a friend while socializing at the business off-hours. The court concluded that the firing of the gun was not within the scope of… Continue Reading

8th Circuit: Financial Institution Bond Provides Coverage for Fraudulent Wire Transfers

Additional Insured Coverage, Bad Faith, Business Interruption, Crime Insurance, Cyber Insurance, Financial Institution Bonds
With policyholders facing increased losses from hacking and business email compromise, insurers are fighting hard to escape their obligations under financial institution bonds, crime policies and cyber insurance policies. In a case that bolsters policyholders seeking coverage for digital fraud, the U.S. Court of Appeals for the Eighth Circuit held that a bank’s financial institution… Continue Reading

Arizona Court Rules That Chubb Cyber Policy Does Not Cover Credit Card Theft Losses

Crime Insurance, Cyber Insurance
As cyber attacks increase at an unprecedented pace, more and more businesses are purchasing cyber insurance to protect against that risk. The insurance industry now faces an avalanche of claims, and those claims now are moving to the litigation phase. In one of the first decisions interpreting a cyber insurance policy, an Arizona federal court… Continue Reading

Fourth Circuit Affirms Insurance Coverage for Cyber Claim Under CGL Policy

Cyber Insurance, General Liability
In a decision issued April 11, the Fourth Circuit added to a small but growing body of case law across the country finding coverage for cyber claims under traditional general liability insurance policies. In Travelers Indemnity Co. v. Portal Healthcare Solutions, LLC, No. 14-1944, − F. App’x − 2016 WL 1399517 (4th Cir. April 11, 2016),… Continue Reading

Pennsylvania Supreme Court Rules that an Insured Receiving a Defense Under Reservation of Rights May Settle Without the Insurer’s Consent

Uncategorized
In a case with significance beyond the Commonwealth of Pennsylvania, the Pennsylvania Supreme Court recently ruled that an insured, while receiving a reservation of rights defense from its insurance company, may settle the underlying case over the objection of the insurer and obtain reimbursement from the carrier.  The case is styled Babcock & Wilcox Co.… Continue Reading

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