Hunton Insurance Recovery Blog

An Alaska federal court recently dismissed a construction company’s lawsuit, accusing a D&O insurer of bad faith refusal to provide coverage for an email spoofing scheme that resulted in nearly $2 million in fraudulent wire transfers. Alaska Frontier Constructors, Inc., v. Travelers Cas. and Sur. Co. of Am., No. 3:24-cv-00259 (D. Alaska, Nov. 11, 2024). While the case was voluntarily dismissed before the D&O insurer responded to the complaint, the policyholder’s allegations tell a familiar story and highlight several areas of dispute that companies face when navigating the fallout from cyber incidents.

Analysis of “relatedness” in directors and officers liability insurance claims has shifted over time in Delaware. In last week’s decision in Alexion Pharmaceuticals, Inc. Insurance Appeals, Case Nos. 154, 2024 and 157, 2024 (Del. Feb. 4, 2025), the Delaware Supreme Court adopted a “meaningful linkage” standard for relatedness analysis in overturning the trial court’s holding on relatedness. Related claims is an inherently unpredictable and fact-specific issue, and the Alexion decision provides further guidance to Delaware policyholders on how to navigate those disputes in the future.

The Trump administration’s pledge to impose tariffs on Canada, China, and Mexico have many U.S. companies concerned about higher-priced inputs and disrupted supply chains. In an article published by the Export Practitioner, counsel Jorge Aviles and associate Jae Lynn Huckaba explore the insurance coverage options, such as political risk insurance and trade credit insurance, that can offer coverage to protect against and mitigate trade-related risks. The article also provides advice on how policyholders can maximize coverage should a loss occur, and further discusses the impact that tariffs might have on the insurance market, including premiums for certain types of insurance lines.

For policyholders, insurance is meant to provide peace of mind—a promise that when disaster strikes, they’ll have financial support to rebuild and recover. But as two recent cases show, the question of what qualifies as covered “direct physical loss or damage” can lead to drastically different outcomes in court.

In two recent California cases, both policyholders sought coverage after wildfire smoke and debris affected their properties. One court ruled in favor of coverage. Bottega, LLC v. National Surety Corporation, No. 21-cv-03614-JSC (N.D. Cal. Jan. 10, 2025). The other sided with the insurer. Gharibian v. Wawanesa General Insurance Co., No. B325859, 2025 WL 426092 (Cal. Ct. App. Feb. 7, 2025). These contrasting decisions highlight issues policyholders may encounter in securing coverage for smoke-related damage and the ongoing debate over what constitutes “direct physical loss or damage,” a key phrase in most property insurance policies.

This post explores these cases, the influence of COVID-19 coverage litigation on the interpretation of “direct physical loss or damage,” and what policyholders can learn to better protect their rights.

The recent surge in the cost of eggs because of the avian influenza (bird flu) is impacting many consumers. Multiple grocery store chains have implemented limitations on the amount of eggs a customer can buy and restaurants have imposed surcharges on menu items with eggs. Consumers, however, are not the only ones feeling the economic impact of the ravage to poultry flocks, poultry farmers and producers are also feeling the financial strain. As we have explained in the past, insurance can help mitigate the risks to poultry farmers and producers associated with these kinds of events. Here, we explore how some types of coverages can help protect poultry farmers and producers who face unexpected events, such as those stemming from illness or contamination of a flock, that disrupt operations or cause a business loss.

The recent California federal court decision Scottsdale Ins. Co. v. Beachcomber Mgmt. Crystal Cove, LLC, et al. illustrates the perils that corporate policyholders may face in obtaining the full benefit of the bargain when they procure new D&O insurance after making a claim under a prior policy.  2025 WL 257599, at *13 (C.D. Cal. Jan. 21, 2025).  In Scottsdale, the court agreed that an insurer who sold a D&O policy could deny coverage for a lawsuit filed against two corporate executives during its policy period because that lawsuit involved some of the same allegations of wrongdoing as did a claim the policyholder previously submitted to a former D&O insurer.  The new policy contained a very broadly worded “prior notice exclusion” that barred coverage for all claims “in any way involving” any wrongful conduct, facts, circumstances, or situations as to which notice had been given to a prior D&O insurer.  

Artificial intelligence (AI) is reshaping the corporate landscape, offering transformative potential and fostering innovation across industries. But as AI becomes more deeply integrated into business operations, it introduces complex challenges, particularly around transparency and the disclosure of AI-related risks. A recent lawsuit filed in the US District Court for the Southern District of New York—Sarria v. Telus International (Cda) Inc. et al., No. 1:25-cv-00889 (S.D.N.Y. Jan 30, 2025)—highlights the dual risks associated with AI-related disclosures: the dangers posed by action and inaction alike. The Telus lawsuit underscores not only the importance of legally compliant corporate disclosures, but also the dangers that can accompany corporate transparency. Maintaining a carefully tailored insurance program can help to mitigate those dangers.

As 2025 unfolds, executives in the banking and financial sectors are navigating a broad spectrum of risks, including regulatory actions and lawsuits from shareholders and employees. To safeguard against these challenges, executives may rely on directors and officers (D&O) liability insurance. Although D&O insurance policies can offer critical protection, their effectiveness often depends on the specific language negotiated, which varies materially between insurer and policy.

In a recent article in The Review of Banking & Financial Services, partner Geoffrey B. Fehling and associate Alex D. Pappas examine ten common D&O policy exclusions that insurers might invoke to deny coverage. They also offer practical advice for executives about how to minimize the impact of these common policy exclusions.

With the dust still settling from the most expensive political campaigns in history, many politicians are already eyeing re-election bids, while newcomers are gearing up to enter the race for the first time in the midterms or beyond.

In a landscape where presidential and congressional candidates spent nearly $14 billion during the 2020 election cycle, and projections for 2024 suggest total spending exceeded $16 billion, modern political campaigns and their operations are more complex—and risky—than ever before. From campaign staff facing the potential for bodily injury on the trail to cybercriminals targeting sensitive donor information, the range of exposures is constantly growing. It is crucial for campaigns to secure the right insurance coverage to mitigate these evolving risks.

This post explores the key types of insurance coverage political campaigns should consider, as well as strategies to ensure maximum recovery should a loss occur.

Fires and utility disruptions can bring a retail business to a grinding halt, leading to lost revenue, supply chain headaches and frustrated customers. Many retailers assume they’re protected—only to face unexpected roadblocks when they file a claim. In a recent Hunton Retail Law Resource blog post, insurance coverage counsel Rachel E. Hudgins and associate Brian W. Fernandez break down what business interruption coverage really means, common pitfalls to avoid and how to make sure your policy works when you need it most. Read more here.