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

Dairy is the latest round of kitchen staples to suffer from viral diagnoses.  In a first, the H5N1 virus, commonly referred to as the bird flu, is rapidly spreading through US cattle herds.[1]  The virus has already been detected in pasteurized milk sitting on grocery store shelves.[2]  The World Health Organization labeled the outbreak an animal pandemic, but fears of animal to human transmission are rising.[3]  To prepare for the potential financial impact of this looming outbreak, livestock owners and businesses should consider their insurance policies as possible sources of recovery.

Continue Reading Milk Coverage for All Its Worth While the “Steaks” Are High: An Insurance Primer on Coverage for the H5N1 Bird Flu Outbreak

Following record-shattering data breaches, there has been a major push for increased transparency and regulation in the insurance industry regarding consumer data privacy. With an increase in consumer data collection, the threat of ransomware attacks can expose companies to potential litigation or regulatory action if not handled properly.

Read on to learn about the National Association of Insurance Commissioners’ Insurance Consumer Privacy Protection Model Law #674, which illustrates the NAIC’s continuing re-evaluation of its historical approach to privacy compliance requirements. How will Model Law #674, as adopted by states, affect insurers’ compliance obligations vis-à-vis the patchwork of state data compliance laws and regulations recently adopted or under consideration?

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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 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

Last week, Merck & Co. filed documents with the Supreme Court of New Jersey indicating that it reached a settlement with its “all risk” property insurers in a long-running coverage dispute involving over $1.4 billion in losses stemming from a 2017 NotPetya cyberattack that impacted tens of thousands of Merck computers. The coverage litigation, Merck & Co. v. ACE American Insurance Co., focused on the key question of whether the policies’ “hostile/warlike” exclusion applied to the NotPetya attack, which some intelligence agencies have attributed to Russian government attempts to destabilize Ukraine. The settlement was announced just a few days before the New Jersey Supreme Court was set to hear oral arguments during an appeal of the New Jersey state appeals court’s affirmance of a 2021 trial court ruling in Merck’s favor. Merck’s insurers had argued that Merck’s losses were barred by a war exclusion, but the New Jersey trial court found that the exclusion did not apply to malware and cyberattacks and instead was intended to apply only to physical acts of warfare between the armed forces of two or more countries. The terms and the amount of the settlement have not yet been disclosed.

Continue Reading Merck-Settlement of $1.4 Billion Coverage Dispute Over NotPetya Cyberattack Places Renewed Spotlight on War Exclusions in 2024

On June 29, 2023, the U.S. Supreme Court struck down the race-conscious admissions programs at Harvard University and the University of North Carolina at Chapel Hill in a pair of cases brought by Students for Fair Admissions (SFFA).  The Court in SFFA found the universities in violation of the Equal Protection Clause and Title VI of the Civil Rights Act, holding that the diversity-focused admissions programs “lack sufficiently focused and measurable objectives warranting the use of race, unavoidably employ race in a negative manner, involve racial stereotyping, and lack meaningful end points.”

Continue Reading What You May Not Know about The Supreme Court’s Ruling in SFFA—Insurance Coverage Implications for All Industries

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

On May 3, the 7th U.S. Circuit Court of Appeals sided with the policyholder, resolving an insurance coverage dispute over a $100 million settlement related to claims under the federal Anti-Kickback Statute and the federal False Claims Act. Read on for analysis of this decision, which tries to clarify the difference between compensatory damages, which may be covered by insurance under Illinois law, and restitutionary damages, which generally are not.

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Insurance policies invariably require insureds to submit timely written notice of a “Claim” made by third parties to obtain coverage from the insurer.  A recent decision from the United States District Court for the Southern District of New York is yet another reminder that insureds need to closely analyze what constitutes a “Claim” under their policies in order to comply with the timely notice requirement. 

Continue Reading Another Judicial Reminder for Policyholders to Carefully Review Policy Language and Provide Timely Notice of a “Claim”