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Seiger Gfeller Laurie LLP
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Happy New Year! We have released our review of Key Cyber Risk Insurance Coverage, Data Breach, and Standing Decisions 2017. The review, prepared by partner Vince Vitkowsky, includes last year’s leading decisions across the U.S. on (1) insurance coverage for cyber risks under cyber, management and D&O, CGL and crime policies, (2) claims against entities who have suffered data breaches, and (3) plaintiff’s standing in data breach cases. You can read it here. Continue reading
Posted Jan 8, 2018 at Insurance Developments
Vince Vitkowsky will be presenting a Legal, Claims and Regulatory Overview at the Independent Reinsurance Underwriters Association Seminar on Cyber Coverage & Reinsurance in New York City on February 6, 2018. Continue reading
Posted Jan 3, 2018 at Insurance Developments
OneBeacon America Ins. Co. v. Celanese Corp., 16-P-203 (Mass. App. Ct. 2017). The Massachusetts Appeals Court vacated a lower court decision ordering OneBeacon to repay Celanese Corp., $2.4 million it incurred in defense costs, finding that Celanese lost its right to reimbursement when it refused to let OneBeacon take control of its defense in underlying asbestos and chemical product injury claims. In April 2009, Celanese sent a letter to OneBeacon terminating the parties’ defense cost-sharing agreements and demanded that OneBeacon instead defend Celanese under the terms if its general liability policy issued to Celanese. OneBeacon agreed to defend Celanese against... Continue reading
Posted Nov 6, 2017 at Insurance Developments
Universal Cable Productions LLC v. Atlantic Specialty Insurance Company, Case No. CV 16-4435 (C.D. Cal. Oct 6, 2017). Universal Cable Productions LLC was required to move production of a TV series from Jerusalem to Croatia and New Mexico because of the conflict between Israel and Hamas in the summer of 2014. Atlantic Specialty Insurance Company insured Universal under a Motion Picture/Television Producers Portfolio Policy. Atlantic denied a claim for the Extra Expense resulting from the move, citing the War Exclusion. The court agreed with Atlantic. The court held that the word “war” should be applied in its common understanding, and... Continue reading
Posted Oct 12, 2017 at Insurance Developments
Mary Ann Ring v. Litchfield Bancorp., AC 39111 (Conn. App. Ct. 2017). The Connecticut Court of Appeals held that a plaintiff had waived her right to appeal a trial court’s ruling striking her amended complaint which failed to allege any additional facts or to alter any of the material allegations from the original complaint. The plaintiff had paid $40,000 to Chamberlin Kitchen & Bath, LLC (“Chamberlin”) to remediate water damage at the plaintiff’s home, but Chamberlin never provided the labor or materials. However, it deposited the payment into its account with the defendant bank. The bank set off funds in... Continue reading
Posted Aug 7, 2017 at Insurance Developments
Medidata Solutions, Inc. v. Federal Insurance Co., No. 15-CV-907 (U.S.D.C., S.D.N.Y. July 21, 2017). In a case contrary to the prevailing trend, a federal court in New York, applying New York law, held that the wire transfer of $4.8 million resulting from fraudulent social engineering was covered under a Crime Policy. Medidata provides services to scientists conducting clinical trials. Although it has its own email domain address, it used Google’s Gmail platform for company emails. Messages to employees were routed through Google servers for processing and storage. Gmail displayed the sender’s full name, email address and picture in the “From”... Continue reading
Posted Jul 25, 2017 at Insurance Developments
Hudson v. GEICO Ins. Agency, Inc., No. 2016-15-Appeal (PC 12-6179), 2017 WL 2622777 (R.I. June 16, 2017). The Rhode Island Supreme Court held that a Good Samaritan injured while assisting at the scene of an accident was “occupying” another vehicle at the time of injury, and could recover from that vehicle’s insurer. The plaintiff was inside a parked vehicle owned by her boyfriend when she heard a crash. While assisting at the scene, another vehicle struck the vehicles involved in the accident and injured the plaintiff. Plaintiff’s claim with that other vehicle’s operator was settled, but the amount was insufficient... Continue reading
Posted Jul 24, 2017 at Insurance Developments
American Economy Ins. Co. v. Aspen Way Enterprises, Inc., Case No. 16-35059hy (9th Cir. May 26, 2017). In an opinion marked “Not for Publication,” the Ninth Circuit addressed whether a duty to defend existed where there were allegations that the insured installed spyware on rented laptops that allowed access to keystrokes and screenshots. The insured sought coverage for “bodily injury” and “personal and advertising injury” under CGL Coverage B. There were two underlying cases, one by consumers and one by the State of Washington. Applying Montana law, the court held that coverage for the Washington action was precluded because of... Continue reading
Posted Jul 20, 2017 at Insurance Developments
Burlington Ins. Co. v. NYC Transit Auth., No. 57, 2017 WL 2427300 (N.Y. June 6, 2017). The New York Court of Appeals changed New York Law by limiting endorsements that provide additional insured coverage for bodily injury to cases in which the named insured proximately caused the injury. The decision construed the standard ISO CG 20 10 additional insured endorsement, which provides coverage: “…only with respect to liability for bodily injury…caused, in whole or in part, by: (1) your acts or omissions; or (2) the acts or omissions of those acting on your behalf.” The New York City Transit Authority... Continue reading
Posted Jul 13, 2017 at Insurance Developments
Lend Lease (US) Construction LMB Inc., et al. v. Zurich American Ins. Co., et al., 28 N.Y.3d 675 (2017). The New York Court of Appeals held a damaged crane fell within a Contractor’s Tools Exclusion, and that the breadth of that Exclusion did not render the coverage provided for temporary works illusory. The insured had a crane that rose 750 feet from its base installed on the 20th floor of their construction site. High winds from Superstorm Sandy weakened the metal, causing the boom to teeter and collapse. The insured sought a declaration that the crane was covered. The court... Continue reading
Posted Jul 12, 2017 at Insurance Developments
There is extensive insurance coverage litigation in Connecticut and elsewhere in the Northeast arising concerning the crumbling foundations of homes. Bob Laurie and Vince Vitkowsky recently explained the background and reviewed recent rulings for Insurance Day. Their article can be found HERE. Continue reading
Posted Jun 20, 2017 at Insurance Developments
Several recent developments have pointed strongly toward foreign nations and groups sponsored by foreign nations in cyberattacks resulting in loss to businesses. This includes the involvement of North Korea in large-scale criminal activity, possibly including last week’s WannaCry ransomware attacks throughout the world. The potential application of War Exclusions to these cyberattacks is explored in Vince Vitkowsky’s White Paper, War Exclusions and Cyber Threats from States and State-Sponsored Hackers. Continue reading
Posted May 18, 2017 at Insurance Developments
According to the Connecticut Supreme Court, in a case where Jerry Garlick represented the successful plaintiff, the answer is yes. In ARS Investors v. Crystal, LLC, a lender took a mortgage on a commercial property that was created by an illegal subdivision. When the lender went to foreclose, the owner and a subsequent encumbrancer argued that the property “did not exist” because the subdivision was never approved by the municipality, and to allow the foreclosure would be to validate an illegal subdivision. The Superior Court disagreed and entered a judgment of strict foreclosure. The owner and the subsequent encumbrancer appealed... Continue reading
Posted May 10, 2017 at Insurance Developments
It’s been a busy year in case law developments involving cyber risks and insurance. SGL has just released its White Paper entitled Cyber Risks, Insurance Coverage, Data Breach and Standing Decisions January through April 2017, in which our partner Vince Vitkowsky analyzes and distills the main cases that have come down so far. We hope our readers will find it useful and interesting. Continue reading
Posted May 8, 2017 at Insurance Developments
Spec’s Family Partners Ltd. v. Hanover Ins. Co., Case. No. 4:16-cv-00438 (U.S.D.C., S.D. Tex. March 15, 2017). We have previously reported on the March 15, 2017 dismissal of a retailer’s claim for coverage of attorneys’ fees incurred to recover PCI fees and fines withheld by a card processor. The explanatory Memorandum Opinion and Order (“Opinion”) initially was filed under seal. That Opinion was unsealed on April 16, revealing that the decision was based on the absence of a duty to defend because of the contractual liability exclusion. The case arose under a Private Company Management Liability Policy with a Directors,... Continue reading
Posted Apr 20, 2017 at Insurance Developments
Taylor & Lieberman v. Federal Ins. Co., 2017 WL 929211 (9th Cir. Mar. 9, 2017) (unpublished). The Ninth Circuit held that an accounting and business management firm that fell victim to a social engineering scheme did not have coverage under the Forgery, Computer Fraud, or Funds Transfer Fraud insuring agreements of a Crime policy. The insured received two emails from a client’s hijacked email account, directing funds transfers to accounts in Malaysia and Singapore. It complied. The insured then received a third email purportedly from the client, but from another email address, directing a third transfer. The insured called the... Continue reading
Posted Apr 19, 2017 at Insurance Developments
Walsh Constr. Co. v. Zurich Am. Ins. Co., No. 45D05-1506-PL-43 (Ind. Ct. App. Mar. 28, 2017). An intermediate Court of Appeals in Indiana held that an insurer had no obligation to defend and indemnify an additional insured when the policy required the named insured to satisfy a self-insured retention before the policy could be enforced against the insurer. A General Contractor hired a subcontractor to provide safe traffic patterns in connection with the construction of two interstates highways, and required the subcontractor to indemnify it for any liability resulting from the subcontractor’s negligence. The subcontractor purchased a CGL policy from... Continue reading
Posted Apr 17, 2017 at Insurance Developments
Spec’s Family Partners Ltd. v. Hanover Ins. Co., Case. No. 4:16-cv-00438 (U.S.D.C., S.D. Tex. March 15, 2017). Visa and MasterCard issued $9.5 million in liability assessments to Spec’s, a chain of liquor stores in Texas. To meet these, a card processing company withheld $4.2 million in receipts. Specs sued the processor, and argued that Hanover should pay for the lawyers in an action seeking recovery of the withheld amounts. Hanover had entered into a defense funding agreement, but argued that fees to recover the withheld receipts are not defense costs. Hanover’s motion to dismiss on the pleadings was granted. The... Continue reading
Posted Apr 6, 2017 at Insurance Developments
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SGL is excited to welcome Gerald Garlick and Linda Hadley as partners to the firm and Craig Lovely as an associate. In addition, we are pleased to welcome paralegal Ellen Rohner and Emily Dwelley to our administrative support team! For more information on our press release, please click here. Continue reading
Posted Apr 5, 2017 at Insurance Developments
InComm Holdings, Inc. v. Great American Ins. Co., Case No. 1:15-cv-2671 (U.S.D.C., D. Ga. March 16, 2017). The court found no coverage under a Computer Fraud policy for claims arising from a scheme involving a Prepaid Debit Card Plan. The insured, InComm, was a debit card processor providing a service enabling customers to load funds onto prepaid debit cards issued by banks. The funding was done by purchasing “chits” from retailers, such as CVS or Walgreens, for the amount of the chit plus a service fee. InComm’s computers allowed debit card holders to request transactions on their account, including redeeming... Continue reading
Posted Apr 5, 2017 at Insurance Developments
Vince will serve on a panel on Geopolitics and Cyber Risk at the NetDiligence Cyber Risk and Privacy Liability Forum in Philadelphia on June 5-7, 2017. Continue reading
Posted Mar 20, 2017 at Insurance Developments
The state of Connecticut is in the midst of a wave of litigation concerning insurance coverage for losses from the widespread use of faulty concrete supplied by J.J. Mottes Company to build homes in Tolland County during the 1980s and 90s. The trial courts are starting to issue rulings on some of the cases. In two of them, Metsack v. Liberty Mut. Fire Ins. Co., No. 3:14-CV-01150, 2017 WL 706599 (D. Conn. Feb. 21, 2017) and Roy v. Liberty Mut. Fire Ins. Co., No. 3:13-CV-00435-SRU (Conn. Super. Ct. Feb. 22, 2017), the homeowners’ policies at issue provided coverage in the... Continue reading
Posted Mar 16, 2017 at Insurance Developments
In Gubala v. Time Warner Cable Inc., 846 F. 3d 909 (7th Cir. Jan. 20, 2017), the Seventh Circuit Court of Appeals held that a cable company’s failure to destroy personally identifiable information of former subscribers, without more, is insufficient to establish Article III standing. Plaintiff was a former subscriber to Time Warner’s cable services, who provided personally identifiable information to the company. Eight years after cancelling his service, he inquired and learned that the information was still in the company’s possession. He sought injunctive relief for alleged violation of the Cable Communications Policy Act, which provides for the destruction... Continue reading
Posted Mar 2, 2017 at Insurance Developments
In In re: Horizon Healthcare Services, Inc. Data Breach Litigation, 846 F. 3d 625, 2017 WL 242554 (3d Cir. Jan. 20, 2017), the Third Circuit Court of Appeals held that with the passage of the Fair Credit Reporting Act (FCRA), Congress established that the unauthorized dissemination of personal information by a credit reporting agency in and of itself causes an injury sufficient to establish Article III standing. Two laptops containing unencrypted personal information of more than 839,000 Horizon members were stolen. Plaintiffs in a putative class action allege willful and negligent violations of the FCRA. There were no allegations that... Continue reading
Posted Feb 27, 2017 at Insurance Developments
In Dittman v. UPMC, 2017 PA Super 8 (Jan. 12, 2017), the Pennsylvania Superior Court affirmed the dismissal of claims against an employer resulting from a breach of electronically-stored personal and private information. The University of Pittsburgh Medical Center (UPMC) suffered a data breach exposing information about its 62,000 present and former employees. At least 788 of those employees were subsequently victims of tax fraud. The employees asserted that UPMC breached a legal duty to protect their information, specifically by failing to properly encrypt data, establish adequate firewalls, and implement adequate authentication procedures. In a 2-1 decision, the court held... Continue reading
Posted Feb 24, 2017 at Insurance Developments