HNRK Coverage Corner

On March 22, 2022, the Delaware Supreme Court issued a decision in First Solar, Inc. v. National Union Fire Ins. Co. of Pittsburgh Pa., No. 217, 2021, clarifying the standard for applying the related claims provision of a directors and officers liability policy under Delaware law.

D&O policies are typically claims-made—meaning they cover claims made against the insured during the policy period, even though the underlying conduct may have occurred during an earlier period.  But sometimes a lawsuit filed during the policy period may, in fact, be covered by an earlier policy.  This is ...

On November 23, 2021, the New York Court of Appeals issued a decision in J.P. Morgan Secs. Inc. v. Vigilant Ins. Co., 2021 NY Slip Op 06528, resolving a long-standing coverage dispute over whether a disgorgement payment made as part of the settlement of an SEC enforcement action constituted a “penalty” that was excluded from coverage under a liability policy’s definition of “loss.”  The Appellate Division, First Department, in a decision previously covered on this blog, held that the payment was a penalty.  That decision relied principally on a 2017 decision of the United ...

On April 9, 2021, the Second Circuit issued a decision in Fabrique Innovations, Inc. v. Federal Insurance Company, 20-1396-cv, holding that a policy’s “willful acts” exclusions were not triggered by a “simple breach of contract.” (N.B. HRNK insurance recovery partner Joshua Blosveren successfully represented the Appellee in this appeal.) The insured (“Fabrique”) made a claim under a cargo insurance policy that covered damage to fabric and plush merchandise temporarily in storage at specified locations.  The goods at issue were lost “after Hancock Fabrics ...

On December 30, 2020, the Second Department issued a decision in American W. Home Ins. Co. v. Gjonaj Realty & Mgt. Co., 2020 NY Slip Op 08027, ruling that an insurer was not entitled to recoup defense costs it paid, despite the court’s determination that the insurer had no duty to indemnify.

Under New York law, a liability insurer’s duty to defend is “exceedingly broad” and is triggered whenever there is a “reasonable possibility” of coverage.  Thus, "an insurer may be contractually bound to defend even though it may not ultimately be bound to pay, either because its insured is ...

On December 15, 2020, Judge Schofield of the SDNY issued a decision in 10012 Holdings, Inc. v. Sentinel Ins. Co. Ltd., Case No. 10-cv-4471(LGS), dismissing an art gallery’s claim for business interruption coverage arising from the suspension of business operations due to the government-ordered closure of non-essential businesses during the COVID-19 pandemic.

As discussed in my article, “A Guide to Insurance Coverage for Business Losses Arising from the COVID-19 Pandemic”, which appeared in the  Summer 2020 edition of NYLitigator, business interruption insurance ...