Don’t Let Jury Trials Vanish Further Amidst the Coronavirus Pandemic

Jared Zola

A trial team and I were asked recently whether we would prefer to postpone an in-person jury trial several months or conduct the trial now via Zoom. We responded with a resounding, “in person.”

Not a single one of us is immune to the coronavirus COVID-19 pandemic. We’ve all suffered loss. Some much more tragic and permanent than others, but no one can honestly say that her or his life is unchanged. Some things that seemed normal earlier this year and before then may never go back to the way they were. Will we fly cross-country to conduct a four-hour deposition in person, even when it is safe to do so? Maybe; depends on the witness. Will we for an in-person meeting with colleagues? Maybe not.

While attorneys are proving every day that many parts of our profession can be performed remotely, we must closely guard the sanctity of jury trials from the coronavirus pandemic. Criminal and civil jury trials are the backbone of the American system of justice; our ultimate safeguard of civil liberties. The American jury trial is a constitutional right. I’m all for adapting to the present situation. But the thought of a “virtual” trial by jury is a bridge too far—and presents a serious risk of eroding one of the most fundamental American rights. Continue reading “Don’t Let Jury Trials Vanish Further Amidst the Coronavirus Pandemic”

Is There a Glitch in Insurance Coverage for Social Engineering Scams?

James S. Carter

Social engineering scams seeking to deceive companies into making wire transfers to fraudulent bank accounts continue to plague companies. According to the FBI, social engineering fraud costs businesses billions of dollars each year. On top of the lost funds, social engineering scams can lead to substantial investigation costs and even litigation.

Many businesses trust their crime or fidelity insurance policies to protect them from social engineering losses. Insurers, however, take the position that such policies do not cover all social engineering scams. Depending on the type of social engineering scam or how it happens to play out, insurers may deny coverage, depriving the policyholder of valuable insurance protection. Continue reading “Is There a Glitch in Insurance Coverage for Social Engineering Scams?”

Blank Rome Attys Talk COVID-19 Insurance Coverage Battles

Blank Rome LLP insurance recovery partners Jim Murray and Linda Kornfeld recently spoke with Law360 about how their practice group has been tackling clients’ claims for business loss coverage amid the COVID-19 crisis, while adjusting to the new normal of working from home.

How has your practice group adapted to the pandemic?

Murray: Our group consists of 32 of us now in several offices, including New York, Washington, D.C., and Los Angeles. We collaborate and pitch work as a group. We are not limited by offices. I have not had a single case at Blank Rome that has not included at least one lawyer from one of the other offices.

Our group would typically have a monthly meeting of 45 minutes to an hour, where we discuss key cases and developments. We had always done that by video in our offices. When the pandemic hit and we finally ended up closing, we went from 14 offices to 1,000 home offices. For the insurance group, though, it was in some respects business as usual, as we continued with those meetings, bumping them up to every Friday instead of every month. We limit the meetings now to 30 minutes, and every week we have a speaker talk about one of their cases. We have had a lot of discussion about coronavirus cases, what we will and will not be doing in this area.

Kornfeld: It has really been a great thing to have such a close group in this pandemic situation. In my career, I have never been involved in any situation of this scope, where everyone in the group is thinking about the same issues at the same time. 9/11, Hurricane Katrina, Hurricane Sandy and other large-scale events in the past were geographically specific, where this event is impacting most everyone everywhere.

We are all reading insurance policies on a daily basis and analyzing those policies. We have such strong friendships that we are on the phone with each other all the time, trading ideas about policy language and potential arguments. Since we are such a tightly knit group, we have been able to use that fact to bring sophistication of analysis and thought to bear. We are putting all these smart coverage brains together and focusing at the same time on this specific issue, coverage for the pandemic. The level of intellectual discussion has been a silver lining of this situation.

For the firm as a whole, across all practice areas, we have been in much closer contact. Most everyone’s clients have had some issue relating to the pandemic.

In their full interview with Law360, Jim and Linda further discuss:

  • What pandemic-related work has the group been doing?
  • What do you think of efforts to centralize COVID-19 coverage cases?
  • How have you been spending time outside work?

To read the full article, please click here.

“Blank Rome Attys Talk COVID-19 Insurance Coverage Battles,” by Jeff Sistrunk was published in Law360 on June 17, 2020.

 

Credit Insurance: Insurance for Late Payments or Nonpayments

John A. Gibbons and James S. Carter

Recent events and the decline of the global economy have brought a raft of notices of late payments or no payments for creditors, lenders, landlords, and trade counterparties. In many instances there may be no notice at all, but rather just silence and a nonpayment. With the downturn and record number of layoffs and closures also comes the specter of further prolonged defaults and bankruptcies.

Is there insurance to protect against a nonpayment? Yes. Beyond Business Interruption / Business Income and other insurance policies that cover losses from recent events and business suspension losses, there is specific insurance designed to protect against the risk of nonpayment of a debt: Credit Insurance / Trade Credit Insurance.

What Is Credit Insurance?

Credit insurance protects those that purchase the insurance against the risk of nonpayment of an insured debt. Purchasers of credit insurance can fall within a wide array of businesses—lenders, exporters, commodity traders, product suppliers. Credit Insurance is typically used to protect a company’s own account receivables (“AR”) against the risk of nonpayment. Continue reading “Credit Insurance: Insurance for Late Payments or Nonpayments”

CANCELED: Guidance for Policyholders on Event Cancellation Insurance in the Wake of COVID-19

Dominique A. Meyer

Across the globe, governments and public health officials are banning large gatherings and imploring citizens to practice “social distancing” in order to slow and prevent the spread of the coronavirus outbreak, or “COVID-19.” As a result, festivals, sporting events, conferences, and community celebrations are being canceled or postponed, leaving event organizers of all sizes—from major production companies, to would-be newly-weds—wondering how to recoup their substantial losses.

The pandemic has led to an unprecedented number of high-profile event cancellations and the potential for billions of dollars in lost income and other damages to the entertainment and sports industries. Just last week, concert giants Live Nation and AEG Presents suspended all tour engagements in North America, and world-famous gatherings like the Coachella Valley Music Festival and Stagecoach Music Festival were postponed until October. The threat of the virus has also taken its toll on professional sports—both the National Basketball Association and the National Hockey League suspended the remainder of their 2019–2020 seasons, and the National Collegiate Athletic Association canceled its March Madness tournament altogether. Not even “America’s favorite pastime” has been immune from the effects of the virus—Major League Baseball postponed the start of its 2020 season indefinitely. The economic cost of these cancellations is certain to be substantial. Continue reading “CANCELED: Guidance for Policyholders on Event Cancellation Insurance in the Wake of COVID-19”

New York Courts Skeptical of Insurers Seeking to Hide Coverage Analysis as Privileged

Alexander H. Berman, Robyn L. Michaelson, and Justin F. Lavella

One of the most basic discovery requests in insurance coverage litigation is for the insurer’s claims-handling documents and coverage analysis. A policyholder suing for insurance coverage is entitled to understand the insurer’s pre-denial coverage analysis, which is after all one of the core business functions of an insurance company along with marketing and selling policies.

Simply put, an insured must be allowed access to all documents held by the insurer, including communications and claim files that might speak to why the insurer denied the claim. In recent years, however, insurers have begun to involve both in-house and outside counsel in these deliberations, and have consequently asserted the protections of the attorney-client privilege and the work product doctrine to shield these critical business documents from discovery.

Fortunately, New York courts are developing a body of case law that properly treats such communications as discoverable. When an insurer communicates with counsel to assist in determining whether a claim is covered in the first instance, such communications are made primarily in furtherance of the insurer’s business function, as opposed to legal advice, and therefore are not immune from discovery. Any resulting memoranda simply reflects the same work that claims handlers have been performing since the establishment of the insurance industry. That the analysis was undertaken by an attorney rather than a non-attorney has no significance in the nature and purpose of the work being performed and the discoverability of the resulting analysis and documents. Continue reading “New York Courts Skeptical of Insurers Seeking to Hide Coverage Analysis as Privileged”

California Corner: Resources for Those Impacted by California Wildfires

Linda Kornfeld, John E. Heintz, Alan Rubin

Communities and businesses throughout California are dealing with the serious, and for some, catastrophic effects of historic wildfires. The fires have devastated homes and businesses across a large swath of the state, and while their full impact is not yet known, they are sure to cause long-term disruption to individuals and families, residential areas, businesses and the economic health of the entire region. Our thoughts are with those affected by these events, and our interdisciplinary Severe Weather Emergency Recovery Team (“SWERT”) has prepared two resources that are immediately helpful to those in the affected areas: Continue reading “California Corner: Resources for Those Impacted by California Wildfires”

Case Review: Seventh Circuit Repudiates Insurer’s Attempt to Sell Illusory Coverage to Policyholder

Shareen Sarwar

Last week, the Seventh Circuit had occasion to consider the scope of a contractual liability exclusion in the context of professional liability coverage. In Crum & Forster Specialty Ins. Co. v. DVO, Inc., No. 18-2571, 2019 WL 4594229 (7th Cir. Sept. 23, 2019), an insurer insisted that its contractual liability exclusion did not render the professional liability coverage it sold illusory. The Court disagreed, however, holding that the exclusion was overbroad and would, if applied, defeat the fundamental purpose of the insurance. The Court further concluded that the policy must be reformed to meet the policyholder’s “reasonable expectations” of coverage.

The insurer had sold both primary and excess insurance policies to its policyholder, DVO, a company which designs and constructs anaerobic digesters. Pursuant to the coverage grant, the insurer agreed to pay DVO’s liabilities for, among other things, “damages or cleanup costs because of a wrongful act” arising out of “a failure to render professional services.” The Court opined that the essential purpose of this insurance was to provide coverage for professional malpractice. Continue reading “Case Review: Seventh Circuit Repudiates Insurer’s Attempt to Sell Illusory Coverage to Policyholder”

Pay Attention to Policy Language in a Hardening Insurance Market

Ian Ascher[1] and Jared Zola

The insurance market has proven to be a difficult environment for buyers in 2019. The long tenure of the soft insurance market cycle is changing, and is presenting challenges with pricing, capacity, and sustainability of favorable coverage terms. Coming out of difficult natural catastrophe years in 2017 and 2018, the property insurance market took a sharp turn to protect insurers’ bottom lines. While hardening of the property insurance market was expected, the broader casualty market has taken this opportunity to drive corrective action on their portfolios as well, leaving insurance buyers with little leverage.

How Insurers Are Reacting to the Market Shift

Insurers are approaching the market shift with different strategies, some focused on rate increases, while others are focused on restricting terms, or both. While individual loss experience still plays a role in renewal outcomes, there appears to be more of a portfolio-level push on rate and terms regardless of individual quality of risk factors for any given policyholder. In this environment, stricter control over capacity deployment leads to less competition, which may force the buyer into tough decisions regarding what utility insurance provides for its organization. The guarantee of comprehensive coverage at a fair price becomes harder to balance in a setting where definitively having both is less than certain. Continue reading “Pay Attention to Policy Language in a Hardening Insurance Market”

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”