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07 Sep 2018 Gain Policyholder Insights and CLE from Barnes & Thornburg

Natural Disaster, Webinar | Kenneth Gorenberg

Recent and ongoing wildfires in California and hurricanes in Hawaii and the Gulf Coast obviously impact businesses with operations in those regions, but every business is potentially susceptible to losses arising out of natural disasters. In our latest Policyholder Insights webinar “How Secure Is Your Business From Natural Disasters?” the panel discussed these valuable lessons:   It’s important to have a plan and a team in place before a potentially insured loss occurs. Because of certain exclusions in property insurance policies, a policyholder often will need to show that damage was independently caused by something other than a flood, for example wind or fire. Several types of business interruption policies can cover some loss of business income.   To see the full webinar, check out…

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31 Jul 2018 Insurance Coverage for Construction Defects – 2018 50-State Survey

Insurance Coverage | Clifford Shapiro

Barnes & Thornburg’s Construction Law Practice Group has issued its 2018 50-State Survey of the Threshold  “Occurrence” Issue. This updated survey reviews each state’s current case law with respect to the “occurrence” insurance coverage issue for construction defect claims.  Find out more about how your state analyzes this critical insurance issue, and whether there are any state supreme court decisions or state statues that apply.   View survey   Clifford ShapiroClifford J. Shapiro is a partner in the Chicago office of Barnes & Thornburg LLP and chair of the Construction Law Practice Group. He concentrates his practice in construction law and litigation, insurance coverage litigation on behalf of policyholders and other complex commercial litigation.More Posts – Website

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27 Jul 2018 Will Your Company’s Insurance Cover Losses Due to Phishing and Social Engineering Fraud? Six Tips for Evaluating and Seeking Coverage for Business Email Compromises

Insurance | Scott Godes

If your company fell victim to a business email compromise – a scam that frequently involves hackers fraudulently impersonating a corporate officer, vendor, business partner, or others, getting companies to wire money to the hackers – would your insurance cover your loss?  There is reason to be concerned about this sort of attack, as the FBI has explained that the “scam continues to grow and evolve, targeting small, medium, and large business and personal transactions. Between December 2016 and May 2018, there was a 136% increase in identified global exposed losses” in actual and attempted losses in U.S. dollars.  The good news for policyholders is that courts across the country have been ruling that crime insurance policies should provide coverage for this sort of loss,…

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15 Jun 2018 Kentucky Supreme Court Doubles Down on Wrong Analysis of “Occurrence”

Occurrence | Clifford Shapiro

The Kentucky Supreme Court doubled down on its wrong analysis of the “occurrence” issue in Martin/Elias Properties LLC v. Acuity, 544 S.W.3d 639 (2018).  The new decision refuses to find the existence of an “occurrence” where defective basement work performed by a subcontractor caused property damage “throughout the entire property, making it structurally unsound.”  The decision applies an extreme “fortuity” analysis that is not based on the actual CGL policy terms to reach this conclusion.  The decision holds that “the legal analysis used to determine whether something constitutes an accident for issues of CGL coverage is the doctrine of fortuity, which encompasses both intent and control.”  The decision then holds that to determine whether an event constitutes an accident Kentucky courts must analyze (1) whether…

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11 Jun 2018 Is a Settlement of a Restitution Claim Covered If Your Policy’s Ill-Gotten Gains Exclusion Applies Only In the Event of a Final Adjudication?

Insurance, Insurance Coverage | John Corbett

Can liability insurance insure a policyholder’s legal obligation to return to a third party amounts that the policyholder was never permitted to obtain in the first place? Insurance carriers would cite comments from Judge Posner, of the Seventh Circuit Court of Appeals: “[a]n insured incurs no loss within the meaning of the insurance contract by being compelled to return property that it had stolen, even if a more polite word than ‘stolen’ is used to characterize the claim for the property’s return.” In this vein, insurance company personnel and their coverage counsel frequently take the position that if liability policies exclude from covered “Loss” “matters which are uninsurable” under applicable law, that encompasses a judgment of liability for restitution of amounts which the policyholder was…

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01 Jun 2018 Don’t Accept Policy Exclusions at Face Value, Especially in California

Claims, Insurance, Insurance Coverage | Matthew O'Hanlon

We’ve recently discussed the nuances of an insurer’s continuing duty to defend under California law in a “mixed” lawsuit alleging both covered and non-covered claims after the dismissal of the covered claims.   Insurers, however, sometimes try to evade their duty to defend at the outset, citing policy exclusions that appear – at first glance – to exclude coverage for what would otherwise be the one covered claim. Should you give up on coverage?   We don’t think so. As a preliminary matter, under California law exclusions are strictly construed against the insurer and liberally interpreted in favor of the insured. Accordingly, if there is any ambiguity as to whether the exclusion applies to negate the insurer’s duty to defend, California courts will construe the…

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29 May 2018 Eleventh Circuit Reaches Different Conclusions While Examining Pollution Exclusion

Insurance Coverage | Kara Cleary

The Eleventh Circuit recently examined two insurance coverage cases involving the applicability of the pollution exclusion.  In one case it held that sewage was not a pollutant, but in the other case it held that storm water was a pollutant.  These cases provide guidance to policyholders who may face a pollution exclusion argument from their carrier in the Eleventh Circuit.    In the case Evanston Insurance Company v. J&J Cable Construction, LLC, the Eleventh Circuit held that damage caused by a sewage leak was not barred by the pollution exclusion. (Case No. 17-11188, April 20, 2018).  The court looked to a prior Alabama case that distinguished industrial waste from residential sewage.  However, the Eleventh Circuit reached the opposite conclusion in the case Centro Development Corp….

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25 May 2018 Minnesota Court of Appeals Confirms Agent Comments Can Bind Insurer

Insurance Coverage | Chris Yetka

  In January 2017, a jury awarded Prospect Foundry $53,300 on a counterclaim for breach of the implied covenant of good faith and fair dealing. At the heart of the case was a representation by an insurance agent that certain workers’ compensation claims would be closed, or reserves reduced, allowing Prospect to receive a dividend on their workers’ compensation insurance premiums.   The insurer appealed, claiming in part that Prospect’s description of the representations of the agent should not have been permitted into evidence. In an April 16 decision, the Minnesota Court of Appeals affirmed in Western Nat’l Mut. Ins. Co. v. Prospect Foundry, A17-0992, 2018 WL 1787687 (Minn. Ct. App. April 16, 2018).  In relevant part, the court held:   In the past, Minnesota…

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24 May 2018 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues – Part 2

Cyberinsurance, Data Security, Insurance Coverage | Scott Godes

This article is the second part in the series, The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues. It was prepared in connection with PLI’s Cloud Computing conference. It was authored by Barnes & Thornburg attorneys, Scott Godes, Kara Cleary, Heidi Fessler and Michael Baumert.   Insurance Coverage Issues for the Cloud   In addition to the insurance best practices mentioned above, the cloud can raise multiple insurance issues that should be considered carefully.  For example, how would insurance provide coverage to the cloud provider or the user if there were a data breach or denial of service attack?  But, there are other events in the cyberspace that both cloud providers and users should consider, such as the situation where users cannot access the cloud…

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24 May 2018 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues – Part 1

Data Security | Scott Godes

This article was prepared in connection with PLI’s Cloud Computing conference. It was authored by Barnes & Thornburg attorneys, Scott Godes, Kara Cleary, Heidi Fessler and Michael Baumert.   The reality that business data of all kinds is now stored, managed, accessed and maintained in the cloud is inescapable.  The reasons for this migration of data from within an organization’s network computing system to a vended cloud provider are infinitely varied.   Whatever the reason fueling the migration of data, one thing is certain – coupled with the movement of data and the use of cloud services is the introduction of additional risk.  It’s true that many companies will actually improve the security of their data by shifting to the cloud.  In many cases, companies…

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