Jared Zola, John D. Heintz, and Justin F. Lavella
Insurance for Property Damage and Business Interruption Losses
Businesses and communities throughout Texas and the Gulf Coast are bracing for the impact of Hurricane Harvey that is expected to wreak havoc this weekend. Harvey is unique because it quickly and unexpectedly transformed from what was predicted to be a smaller-scale storm to a Category 2 hurricane—and may be upgraded to Category 3 before it makes landfall. This transformation has left many major businesses and facilities in the storm’s expected path with significantly less time to prepare, and in some cases shutdown operation, than would ordinarily be expected. Continue reading “Insurance Recovery for Losses Related to Hurricane Harvey”
James Carter, Omid Safa, and Jared Zola
At the beginning of 2017, many publications predicted that ransomware would be one of the most significant cyber threats of the year. The year is not even half over and that prediction appears to be coming true.
On Friday, May 12, 2017, tens of thousands of organizations and companies across the world fell victim to a virulent form of ransomware known as “WannaCry.” The global event has been recognized as one of the largest cyberattacks ever. Continue reading “Ransomware and Cyberinsurance”
Omid Safa, James S. Carter, and Jared Zola
This blog post is Part Two of our blog series and highlights several strategies for maximizing the value of a cyber insurance purchase. Part One of the blog series, highlighted the need for an organization to reevaluate its insurance coverage as part of a comprehensive strategy for addressing emerging cyber risks and outlined several ‘‘big picture’’ considerations relevant to any organization contemplating a cyber insurance purchase. This second part focuses on several strategies to consider when negotiating a cyber insurance purchase and seeking to customize a policy to align with an organization’s particular business needs. Continue reading “Managing Cyber Risks: Tips for Purchasing Insurance That Works for Your Business (Part 2)”
James S. Carter, Omid Safa, and Jared Zola
More insurers are offering stand-alone cyberinsurance policies than ever before. At the same time, there are very few decisions by courts regarding this relatively new breed of insurance policy. Most of the decisions construing insurance coverage for cyber risks to date involve other types of insurance policies, such as commercial general liability (“CGL”) and commercial crime policies. Although such cases may not involve cyber policies per se, buyers trying to navigate the cyberinsurance market ignore them at their peril. They illustrate the types of cyber incidents that have generated insurance coverage disputes significant enough to be litigated to decision. Familiarity with such cases can help buyers select and negotiate cyber risk policies with wording aimed at minimizing such disputes and increasing the scope and certainty of the coverage available to the policyholder.
Continue reading “Cyberinsurance Buyers Beware! Is the Past Prologue?”
Omid Safa, James S. Carter, and Jared Zola
With information technology impacting nearly every aspect of commerce in our “wired” economy, few issues present more concern to businesses today than cybersecurity. Cyberattacks continue to proliferate at an alarming rate and the threats facing companies continue to evolve and become more sophisticated with each passing day. The legal and financial costs associated with such events also grow more serious, as legislators, regulators, and customers insist on greater protection and impose more stringent requirements. Meanwhile, insurance companies have sought to limit the coverage available under traditional insurance policies with new exclusions aimed at cyber-related risks. As a result, it has become imperative for organizations to reevaluate their cybersecurity protocols and breach response plans—and their insurance coverage assets to help offset losses and liabilities associated with such events when all other safeguards fail. Increasingly, this means that companies must consider purchasing cyber-specific coverage to insure against these emerging risks and address the potential gaps in their traditional insurance programs. Continue reading “Managing Cyber Risks: Tips for Purchasing Insurance That Works for Your Business (Part 1)”
James R. Murray, Jared Zola, and Kyle P. Brinkman
Companies facing shareholder derivative suits should be wary of their directors’ and officers’ liability (“D&O”) insurers attempting to avoid providing coverage for settlements or judgments based on “bump-up” or “inadequate consideration” exclusions. The historic purpose of the exclusion is to prevent insureds from negotiating an unfairly-low price when purchasing another entity or completing intracompany transactions and then using insurance proceeds to supplement that price to come up with the fair market value. Continue reading “Don’t Let Your D&O Insurer “Bump” a Covered Claim”
Jared Zola and Frank M. Kaplan
As a wise person once said, “It’s déjà vu all over again.” Anyone who thought wage-and-hour lawsuits would be a short-lived lawsuit du jour of the plaintiffs’ bar have been proven wrong. Claimants filed more than 8,900 FLSA cases in federal court last year, a 30 percent increase from 2011. In light of the continued trend and recent legislation that has the potential to expand liability to individuals acting on an employer’s behalf, employers should take a hard look at the insurance assets available to protect against these potential liabilities.
California’s new statute, the Fair Day’s Pay Act, has the potential to implicate a “person acting on behalf of an employer” to liability for the company’s allegedly improper wage-and-hour practices. Labor Code § 558.1 (eff. Jan. 1, 2016). New York amended its existing Business Corporation Law § 630, effective January 19, 2016, to extend potential liability for unpaid wages to the top 10 shareholders of privately held corporations incorporated in New York and foreign corporations. While employers and individuals are armed with a wide array of defenses, the potential risks warrant a close look at what insurance assets a company has available to offset any potential liabilities in this continuously growing area. Continue reading “Wage-and-Hour Policies May Be a Useful Asset to Fill Potential Coverage Gaps”