HB Litigation News

Tag: Insurance Companies

  • Joshua Gold on Cyber Crime and Insurance

    With the amount of trickery going into thefts and embezzlements these days, crime insurance companies too often use the many steps involved in a fraudulent scheme to argue that losses are indirect and otherwise uncovered.

    The recent decisions of the Second Circuit and Sixth Circuit on the “direct loss” argument and the scope of computer fraud coverage are important victories for policyholders generally, making clear that where the predominant step in the chain is some type of covered fraudulent misconduct involving a computer, a court is not going to entertain a direct loss defense to excuse the insurance company from paying.

    As such, policyholders should be familiar with their crime coverage and promptly notify all potentially implicated lines of insurance coverage when a cybercriminal is afoot. — Joshua Gold, Anderson Kill 

    Read Josh’s complete article. 

    Joshua Gold is Chair of Anderson Kill’s Cyber Insurance Recovery Practice and was amicus counsel for United Policyholders in the Medidata Solutions, Inc. v. Federal Insurance Company case before the Second Circuit.

  • Willis Towers Watson: Cyber Risk Top D&O Concern

    Based on their survey, Willis Towers Watson says cyber risk continues to top the list of concerns for directors and officers (right up there with employee claims). As for coverage, while they care about price, things like their relationship with the carriers and how well they handle claims are critical elements.

    And, maybe one key reason cyber events keep happening: “Only 13% of board members feel that their organizations learn from past cyber mistakes.”

    Read the results of the Willis Towers Watson survey. 

  • Crowell & Moring on D&O Corporate Liability for Cyber Claims

    “Although many commentators have noted the potential exposure for cyber claims in the form of shareholder actions under D&O coverage, little attention has been given to the risks of cyber exposure under Side C [D&O corporate liability] coverage,” write Laura A. Foggan and Thomas Kinney of Crowell & Moring LLP. “D&O policies contain many exclusions and coverage limitations that should protect against undue, unintended expansion of such policies to encompass cyber risks. However, as this case illustrates, courts may not always agree that those coverage limitations fully address cyber breach exposures.”

  • Miller Friel: Opioid Suppliers Are Right to Expect Insurance Coverage

    An excerpt from a post by Bernard Bell of Miller Friel PLLC

    “Because insurers are facing a difficult time evading coverage for opioid claims, they are raising all sorts of non-contractual defenses to avoid coverage, including a ‘social insurance’ argument they have raised in the past.

    “If past public health crises are prologue, these arguments will run something like this: Holding insurers responsible to pay for the costs of public services, including health care, will transform private party liability insurance into social insurance to underwrite public health epidemics caused by all manner of ills.  According to insurers, this will, at a minimum, increase the cost of liability insurance, and financially harm liability insurers, who have not priced this risk into their premiums.  Moreover, holding insurers liable to pay will shift costs away from those best equipped to address the social problem; the companies that supply the opioid products.

    “These arguments are inconsistent with insurance law, which permits parties to freely contract to cover risks, and which place the burden on insurers to pay for insured risk, even if they made an error in underwriting.  Courts interpret insurance contracts according to their language and construe them against insurers if they are ambiguous, and in favor of an insureds’ reasonable expectations of coverage.

    “Moreover, to the extent courts are inclined to look past contract language when construing insurance policies, the social arguments cut in favor of coverage, not against it, because  liability insurance is designed to perform risk management, and deterrence and compensation functions of insurance are important to the social functioning and ordering of society. … These social purposes are especially easy to grasp in the context of pharmaceutical companies that develop and bring to market countless products, including opioid pain medicine, that can relieve human pain and suffering. These companies bought and paid for liability insurance to manage the risks inherent in their business. They are entitled to enforce the promises made to them by those insurance companies that accepted their risks and their premiums.”

  • Insurance Coverage and GDPR: What’s Your Financial Exposure? –Linda Kornfeld, Blank Rome

    In her recent article — GDPR Is Finally Here: It’s Time to Make Sure Your Current Cyber Policy Will Protect against New Financial Exposures — Blank Rome insurance coverage partner Linda Kornfeld wrote:

    Companies can face large financial exposure for GDPR “fines or penalties.” Are they covered under currently worded cyber policies? The answer is, maybe not if your policy, e.g., covers regulatory proceedings addressing only failures to protect private information, as opposed to GDPR proceedings that may address broader noncompliant data collection and use practices. Additionally, coverage for GDPR fines or penalties may be more restricted under the laws of many European countries than the laws of certain states in the United States. Your insurer may agree to choice of law language in your policy that will increase the chances of coverage.

    On behalf of all of us at HB — Congratulations to Linda on her move to Blank Rome! 

    Now Vice Chair of the firm’s Insurance Recovery Practice Group, Linda is one of the nation’s most prominent insurance recovery attorneys, representing corporate policyholders in high-stakes litigation for more than 25 years. Using strategic, creative approaches in her trial and appellate practice, Linda assists her clients in the recovery of hundreds of millions of dollars in insurance assets. She is a strategic adviser to senior executives and in-house counsel on mitigating risk and maximizing insurance recoveries.

    Linda has been a valued contributor to HB programs and, before that, to Mealey’s Conferences and Mealey’s Litigation Reports.