Disputed insurance claims often end in confidential settlements, as do many insured liabilities. But does it matter if lawyers sign a settlement agreement approving “as to form and content”? Last month, the California Supreme Court answered that question with a resounding “Yes!” In Monster Energy Company v. Schechter, a unanimous California Supreme Court ruled that a lawyer signing such an agreement may be bound by that agreement’s confidentiality provisions.
Packed stadiums? Check.
Players and teams with huge followings? Check.
Massive social media appeal? Check.
But here, the events that spectators are so eager to attend aren’t live basketball or football games. Instead, fans are lining up to watch others competitively play video games, more commonly known as esports. In 2018, esports garnered 258 million unique viewers globally, compared to 204 million for the National Football League’s 2016 regular season. In 2019, esports are predicted to draw 299 million viewers and hit $2 billion in revenue, up from $1.5 billion in 2018. The International Olympic Committee is even considering adding esports to the 2024 Olympic Games.
Hurricane Barry provides the latest reminder of insurance precautions that should always be top of mind for business owners in coastal areas. In “Hurricane Barry: Prepare Now to Maximize Insurance Recoveries,” colleagues Tamara D. Bruno, David F. Klein, Joseph D. Jean and Vincent E. Morgan provide a list of helpful reminders and immediate and proactive steps one should take to maximize insurance recovery before, during and after a tropical storm or hurricane makes landfall.
A data breach may cost a company millions in recovery and liability damages, but rarely does a breach force a company into bankruptcy. However, a months-long data breach at American Medical Collection Agency (AMCA) in 2018-2019 did just that, forcing its parent company, Retrieval-Master Creditors Bureau Inc., into Chapter 11 bankruptcy. AMCA has not stated whether it had cyber insurance, but the situation presented by this breach and bankruptcy filing serves as a cautionary tale for those without adequate cyber insurance coverage—or any at all.
Since 2008, Minnesota has had a bad-faith statute that penalizes an insurance company for its unreasonable denial of a first-party insurance claim. But it was only earlier this month that a Minnesota appellate court interpreted the statute to require insurance companies to conduct a reasonable investigation and fairly evaluate its results to establish a reasonable basis for denying the claim. In so doing, the court rejected the interpretation offered by the insurance company: that the policyholder must prove there are no facts or evidence upon which the insurance company could rely to deny coverage. That interpretation would have allowed insurers to rely on post hoc justifications for denying coverage. The court’s rejection of that argument is an important development in bad-faith law that will likely affect both suits brought in Minnesota and those in other jurisdictions where courts might look to this decision for guidance in connection with many types of insurance claims. Continue Reading ›
Insurers have recently argued that environmental property damage claims for “closure” costs arising out of historic pollution are not covered, because the claimed damages are just “ordinary costs of doing business.” Policyholders should strongly resist denials based on this argument, which is unsupported custom and practice in the insurance industry and contradicts the terms of standard-form third-party liability policies, applicable environmental laws, and insurance law in nearly all jurisdictions.
Recently, the Board of Governors of the Federal Reserve System has indicated it may move forward with enhanced cybersecurity standards for large financial institutions and the third-party vendors that serve them. Over on Pillsbury’s SourcingSpeak blog, colleagues Andrew L. Caplan and Curtis A. Simpson examine just what those standards might be in “The Fed May Increase Cybersecurity Standards for Large Financial Institutions and their Service Providers.”
As coverage counsel, we see the situation arise time and again: facing down substantial potential liability in a pending lawsuit, a policyholder engages in good-faith settlement discussions with the plaintiff. After animated negotiations between the parties, the plaintiff finally makes a reasonable offer, only for the policyholder’s insurance carrier to throw up a roadblock by refusing to fund or consent to the settlement. But policyholders need not always resign themselves to continuing costly and time-consuming litigation—a “covenant not to execute” may be the switch to put the settlement back on track.
Although it has become common for corporate directors and officers to face claims seeking to hold them personally liable for alleged damages resulting from actions taken in their official capacity, it wasn’t always this way. There was a time when such lawsuits were so rare that corporations were not even allowed to indemnify their directors and officers. But with the emergence and rapid growth of lawsuits against officers and directors—often fueled by a cottage industry of class action plaintiffs’ firms—corporate indemnification and Directors & Officers (D&O) liability insurance programs have become integral to a company’s ability to attract and retain strong management.
Experts are full of advice about the importance of designing and implementing a robust cyber breach response plan. They opine frequently on its key components, such as identifying the roles and responsibilities of the response team, steps for investigating and containing the breach, internal and external communications regarding the breach and the response, and applicable legal requirements. For the most part, however, their advice focuses on the information-technology aspects of the plan, with some attention given to the roles of senior management and the legal department. But few commentators offer tips on one of the most consequential components of a cyber response plan: insurance.
