Hurricane Harvey Insurance Claim Gets Twisted

Jared Zola and Daniel R. Belzil

Almost two years after Hurricane Harvey devastated parts of Texas and Louisiana, Central America, and several Caribbean islands, the coverage issues arising out of it are far from resolved. The court decisions addressing these coverage issues have not all been positive from the insured’s perspective. In particular, one recent decision in the United States District Court for the Southern District of Texas, Pan Am Equities, Inc. v. Lexington Insurance Company, No. H-18-2937 (May 2, 2019) (“Pan Am Equities”), should give insureds in Texas and elsewhere pause heading into the 2019 Hurricane Season.

The Dispute—Which Deductible Applies?

The insured in that case owned several commercial properties in Houston, including an apartment building and parking garage that sustained more than $6.7 million in flood damage as a result of Hurricane Harvey. Its properties were insured by a commercial property insurance policy that provided “Flood” coverages as well as coverages for loss caused by the peril of “Windstorm and Hail.” Continue reading “Hurricane Harvey Insurance Claim Gets Twisted”

Insurance Coverage for Hurricanes: Insurers May Dispute “Causation”

Jared Zola, Linda Kornfeld, John E. Heintz, and Alan Rubin

Like the 2017 Atlantic Hurricane season before it, the 2018 season brought devastating storms to the United States. A prime example: One of the most powerful hurricanes on record to hit Florida’s Panhandle wreaked havoc in October 2018 and left a trail of devastation in its wake as it weakened to tropical storm status but still brought large-scale destruction to southeastern states.

Hurricane Michael made landfall on October 10 approximately 20 miles southeast of Panama City, Florida, with biblical 155 mph sustained winds, violent waves, and heavy rain. The extent of the damage in Florida is still being evaluated, but it is extensive to the naked eye. Two hospitals were evacuated. Many homes were destroyed, power lines were downed, cars and trucks overturned and destroyed.

It took weeks before roads were cleared and electricity was fully restored. Even once businesses reopened, the storm’s destruction prevented employees from traveling to work. In addition, municipalities reported decreased tax revenues from business closures. The economic impact of storm-related losses for businesses and municipalities combined will be significant. Continue reading “Insurance Coverage for Hurricanes: Insurers May Dispute “Causation””

Federal Court Says Subpoena Is a “Claim” Triggering Insurance Coverage

Jared Zola

An issue frequently raised in coverage disputes involving claims-made liability insurance policies is determining whether certain pre-lawsuit events or disputes constitute a “claim” sufficient to trigger coverage.

Unlike occurrence-based liability policies that respond in the policy year or years during which the coverage-triggering event occurred (e.g., the years in which a person sustained injury in an asbestos bodily injury claim), a claims-made liability insurance policy is triggered upon the insured’s receipt of a claim. Upon an insured providing notice of a claim, its insurers may dispute whether the notice-triggering event constitutes a “claim” at all. Continue reading “Federal Court Says Subpoena Is a “Claim” Triggering Insurance Coverage”

Insurance Coverage for Workplace Sexual Harassment Claims

Jared Zola and James R. Murray

The last several weeks have brought seemingly unending news detailing allegations of sexual impropriety against politicians, celebrities, the news media, and other public figures. As a wave of victims march forward and social movements such as the #MeToo silence breakers grow, there are no signs that sexual harassment claims will subside. There is little doubt that companies and individuals across all industries have and will continue to see an increasing share of similar charges. As companies continue to address this crisis and attempt to protect their brand reputation from tarnishing, they may find some economic relief from their Employment Practices Liability Insurance (“EPLI”) coverage. Continue reading “Insurance Coverage for Workplace Sexual Harassment Claims”

Insurance Recovery for Losses Related to Hurricane Harvey

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”

Ransomware and Cyberinsurance

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”

Managing Cyber Risks: Tips for Purchasing Insurance That Works for Your Business (Part 2)

Omid SafaJames 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)”