On April 19, 2024, the U.S. Environmental Protection Agency announced the designation of two per- and polyfluoroalkyl substances (PFAS)—perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) and their salts and structural isomers—as hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).[1] In its designation, the EPA has identified over 85 industries it believes are most likely to be directly or indirectly affected by the designation. Continue Reading Steps for Companies to Maximize Potential Insurance Recovery After the EPA’s Recent PFAS Designation
Insurance Recovery for Businesses Impacted by the Francis Scott Key Bridge Collapse
On March 26, a containership struck the Francis Scott Key Bridge in Baltimore, Maryland, resulting in the collapse of the highway infrastructure and tragic loss of life.[i] As communities grieve the loss of their loved ones, businesses around the world are grappling with the economic fallout, including significant supply chain disruptions. The closure of I-695, which provides an alternate route for hazardous materials and oversized vehicles that are prohibited from going through the Baltimore Harbor Tunnel, has created a gridlock for companies with distribution warehouses nearby.[ii] The many ships stuck at the Port of Baltimore blockage, which is the top port in the nation for automobile shipments, is likely to create a ripple effect for other ports worldwide.[iii]Continue Reading Insurance Recovery for Businesses Impacted by the Francis Scott Key Bridge Collapse
The Appraisal Clause: What It Is, and When to Enforce It
The Appraisal Process
Even when an insurer agrees to cover an insurance claim, disputes often arise between the insurer and the insured as to the valuation of the loss, particularly for claims under commercial property and business interruption policies. In these circumstances, policyholders should consider whether and to what extent the dispute could be resolved through an appraisal process before resorting to litigation.Continue Reading The Appraisal Clause: What It Is, and When to Enforce It
PFAS Liability and Insurance: Potential Avenues to Mitigate Exposure for PFAS Risks through Insurance
Manufacturers face an ever increasing risk of liability exposure for pollution caused by polyfluoroalkyl substances, commonly known as “PFAS.” In early June this year, it was reported that 3M, as have other large chemical manufacturers, settled pending litigation involving PFAS-contamination in U.S. cities for an estimated $10 billion and aimed to resolve allegations that 3M polluted bodies of water in several U.S. cities.[1] This reported settlement comes after another recent $1.19 billion settlement related to the contamination of water systems.[2] Moreover, environmental regulators—including the Environmental Protection Agency (“EPA”) under the Biden Administration—have made PFAS a priority in recent years.[3]Continue Reading PFAS Liability and Insurance: Potential Avenues to Mitigate Exposure for PFAS Risks through Insurance
Financial Institutions and Bank Directors and Officers in the Crosshairs – Are Their Insurance Policies Really Primed and Ready?
With bank stability and the related stock market rout now dominating the headlines for the first time since the 2008 financial crisis, are financial institutions’ D&O and bankers’ professional liability / E&O (“BPL”) liability policies ready to help backstop coverage, or potentially full of holes? Coming out of a hard market where insurers carefully and quietly pulled back some policy enhancements over the course of several years, now is the time for financial institutions to review their insurance policies to identify and fill any significant gaps and holes in their executive risk coverages. The last two weeks demonstrate that financial institutions, as well as their directors and officers, face the risks of receivership, government investigations, securities lawsuits, and personal liability following a bank failure or stock rout in the face of financial stability concerns. Continue Reading Financial Institutions and Bank Directors and Officers in the Crosshairs – Are Their Insurance Policies Really Primed and Ready?
Update on Case Law Developments for BIPA Damages and Insurance Recovery for BIPA Claims
In May 2022, the Illinois Supreme Court heard oral arguments in Cothron v. White Castle System, Inc. — a case that will have a substantial impact on the liability for violating the Illinois Biometric Information Privacy Act (“BIPA”). BIPA is considered to be among the most robust law in the U.S. governing biometric privacy, and Illinois is among the few jurisdictions permitting private suits for the unlawful collection, storage of such data. Since its inception in 2008, BIPA has been the source of a flurry of lawsuits, many of which have resulted in substantial settlements. The court is set to determine how to calculate the number of individual BIPA violations, whether damages accrue each time an employee scans her fingerprint, or whether the first recorded scan is the sole violation. If the Illinois high court determines that damages accrue with each scan and BIPA violations are ongoing, then the potential damages for BIPA lawsuits would increase exponentially and open a flood of new claims. Fortunately, insurance policyholders have had recent success arguing that coverage exists for BIPA violations under Commercial General Liability (“CGL”) policies. A plaintiff-friendly ruling in the Cothron case would make the ability to recover under these policies even more important, and potentially open additional avenues for recovery. In anticipation of this important ruling, this article provides a brief background on BIPA and summarizes the key decisions relating to insurance recovery of BIPA damages.
Continue Reading Update on Case Law Developments for BIPA Damages and Insurance Recovery for BIPA Claims
Russia and the Insurance Angle — Tapping Political Risk and Other Insurance Coverages
The Russian invasion of Ukraine and the resulting sanctions Western countries have imposed on Russia have already caused potentially catastrophic losses for businesses with assets and investments in Ukraine, Russia and neighboring countries impacted by the attack. These losses could accelerate, based on a March 9, 2022, announcement by Russia’s ruling party.
According to that announcement, a Russian government commission has begun the approval process toward Russia nationalizing the assets of foreign businesses that leave Russia in light of the economic sanctions. This could create dire economic consequences for foreign businesses that leave Russia.Continue Reading Russia and the Insurance Angle — Tapping Political Risk and Other Insurance Coverages
In a Hard Global Insurance Market, Will Insurers Cover Political Risk Insurance Claims?
Entering 2020, corporate policyholders already faced a hardening insurance market. But as the COVID-19 pandemic continues to wreak havoc on global markets and sow civil unrest throughout the globe, and the insurance industry faces unprecedented losses, the market has further deteriorated entering 2022.
In fact, Reuters reported COVID-19 losses of $44 billion so far, which represents the third-largest cost to insurers of any catastrophe to date (behind Hurricane Katrina and the 9/11 terrorist attacks). These factors have not only made some insurance companies reluctant to extend new coverage, but have also incentivized insurance companies to deny or delay claims until their balance sheets recover.Continue Reading In a Hard Global Insurance Market, Will Insurers Cover Political Risk Insurance Claims?
New York’s Highest Court Sides With Insured: $140M Disgorgement Payment Is Covered Loss
On Nov. 23, 2021, the New York Court of Appeals sided with the policyholder, resolving a decades-long insurance coverage dispute, J.P. Morgan Sec. Inc. v. Vigilant Ins. Co., __ N.E.3d __, 2021 N.Y. Slip Op. 06528, 2021 WL 5492781 (Nov. 23, 2021). It held that a $140 million disgorgement payment to the Securities and Exchange Commission (SEC) was a covered “loss” rather than an uninsurable “penalt[y]” under the error and omissions/professional liability policies at issue.
The 6-1 majority opinion is a landmark decision on the insurability of disgorgement and restitution damages that will likely have ramifications for policyholders seeking to recover similar losses from their insurers in disputes in New York and throughout the country.Continue Reading New York’s Highest Court Sides With Insured: $140M Disgorgement Payment Is Covered Loss