Below are the top 10 blog posts from our Insurance & Reinsurance Disputes Blog for 2019. These are the ones our readers viewed the most last year on our blog. The compilation is diverse as is the topic of insurance and reinsurance disputes. Please enjoy this stroll down memory lane. If you like these and are not registered on the blog, just go to the blog home page and sign up.
Interestingly, readers of these posts on Lexology picked some different ones as part of the Top 10 for 2019, but that’s ok. I hope you enjoyed them all.
Enforcement of Arbitration Subpoenas and Summonses
Posted on February 11, 2019 by Larry P. Schiffer
Sometimes it is necessary to obtain evidence from non-parties during a reinsurance arbitration. Yet, the Federal Arbitration Act (“FAA”) does not expressly sanction non-party (or for that matter any) pre-hearing discovery. In practice, however, most parties ask the arbitration panel to issue a subpoena to a “hearing” and then negotiate with the non-party about producing documents without the need to appear at a hearing with a witness. Most non-parties just want the subpoena for their records (to protect against criticism from others about volunteering information) and will eventually agree to produce a negotiated set of documents. Moreover, nothing in the FAA bars a party from negotiating a common-sense resolution to a subpoena request.
Can English Law Insurance Policies Cover Fines Imposed Under GDPR?
Posted on January 23, 2019 by Garon Anthony
When the General Data Protection Regulation (“GDPR”) passed into English law on 25 May 2018, one of the headlines that heralded the new legislation was the Information Commissioner Office’s (“ICO”) new power to impose fines of up to €20million, or 4% of global turnover (whichever is the higher) on organisations that breach the GDPR. Given the dramatic increase of the ICO’s power to impose fines, one of the questions asked by insurance market participants was whether these fines could be covered by insurance?
New York Appellate Court Upholds Title Insurance Kickback Regulation
Posted on January 15, 2019 by Larry P. Schiffer
Last summer, a New York state motion court granted a petition by the title insurance industry challenging a New York State Department of Financial Services (“DFS”) regulation promulgated to prohibit certain practices affecting title insurance costs. That order has now been modified by an appellate court and the petition has been denied except for two subsections of the regulation.
Directors and officers (“D&O”) liability insurance generally protects directors and officers against legal expenses and personal liability for acts and omissions taken in their capacity as directors and officers of the insured company. In a recent case, coverage was excluded where directors also acted as investors of the company.
Arbitration of Insurance Coverage Disputes
Posted on February 7, 2019 by Larry P. Schiffer
Coverage disputes between insurance carriers and policyholders are ripe for resolution through arbitration. ARIAS•U.S. is working on a project to create an arbitration pathway, including modified rules and requirements for certified arbitrators, for these types of disputes and others. But unless the parties agree or the insurance contract contains an arbitration clause, the arbitration option is not available.
Breach of Contract Exclusion Precludes Coverage
Posted on August 14, 2019 by Larry P. Schiffer
Liability insurance policies are meant to cover claims brought against insureds by third-parties alleging a fortuitous event that causes damages. But most liability policies have exclusions that preclude coverage for certain events. For example, many policies exclude coverage for property damage to property owned by the insured. Another exclusion precludes coverage for damages resulting from the assumption of liability in a contract or agreement. And the one we will concentrate on in this post is the exclusion for breach of contract claims. The Sixth Circuit Court of Appeals recently addressed these exclusions.
When Arbitrators Exceed Their Powers
Posted on January 29, 2019 by Larry P. Schiffer
When an arbitration panel issues a final award any challenge to that award faces an uphill battle. That is because under the Federal Arbitration Act (“FAA”) a final arbitration award must be confirmed (if requested) and can only be vacated for a very narrow set of reasons. Of the four grounds for vacatur under Section 10 of the FAA, subsection (a)(4) provides that an award may be vacated “where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.” Where the arbitration award draws its essence from the parties’ contract, courts typically will not find that the arbitrators exceeded their powers even if their award interprets the contract differently than the court. But where the arbitrators mete out their own brand of industrial justice and read provisions out of the contract, a finding that the arbitrators have exceeded their powers is a likely outcome.
Does a Directors and Officers Insurance Policy Cover the Settlement of Criminal Charges?
Posted on August 29, 2019 by Larry P. Schiffer
Directors and Officers (“D&O”) insurance policies cover individuals and entities for a wide variety of claims for “wrongful acts.” Many D&O policies provide coverage for claims based on criminal proceedings. When criminal charges are settled against corporations and officers, very often the settlement includes fines, penalties, cost of investigation and other payments. Are these payments covered under the D&O policy? The Eleventh Circuit Court of Appeals recently addressed this issue under Florida law.
How Broad is the Duty to Defend? This Broad
Posted on January 24, 2019 by Larry P. Schiffer
How many times have you seen a court decision or commentary stating that the duty to defend is broader than the duty to indemnify? A lot I bet. Essentially, a policy with a duty to defend provides “litigation” insurance to the policyholder, even though the claim may never result in any indemnity payment. Most courts will liberally construe the allegations in the complaint and generously interpret the provisions of the insurance policy to find the duty to defend. A recent First Circuit case construing Maine law provides another example of exactly how broad the duty to defend is as interpreted by many courts.
Crime Coverage – Who Is An Employee and Who Is an Authorized Representative?
Posted on August 9, 2019 by Larry P. Schiffer
In a recent case, a parent company took out a crime insurance policy for itself and its subsidiaries. When a property manager for its subsidiary stole funds through forged checks over several years, the policyholder sought a recovery under the crime insurance policy. Unfortunately for the policyholder, there was no insurance coverage.