As many policyholders are acutely aware, the insurance landscape is complex, with numerous insurers offering a wide range of available insurance programs. While some coverage forms are standard, many are unique to specific industries and even to individual insurance companies. This diversity makes it critically important for policyholders to know the risks that their particular
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DEVELOPMENTS AND TRENDS IN INSURANCE COVERAGE FOR COMMERCIAL POLICYHOLDERS
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When Is “Yours” Not Yours? Pennsylvania Superior Court Interprets “Your Computer” Definition in Commercial Property Policy
Sometimes defining the simplest phrases proves anything but simple. So learned the insurer in a property loss and bad faith case brought by its insured and decided earlier this year by the Pennsylvania Superior Court (Watchword Worldwide v. Erie Ins. Co., 308 A.2d 728 (Pa. Superior Ct. 2024)).
Watchword Worldwide engaged in the business of…
Does Your Cyber Insurance Cover Social Engineering Fraud?
Most policyholders are aware of the danger of losses from fraudulent instructions and invoices accomplished through what is known as “social engineering” or related methods. Often this is carried out by an email claiming to be from a vendor or company executive that provides instructions for payment to a fraudulent account. In some cases, the…
Court Rejects Application of Flood Exclusion to Hurricane Rainfall
As the Atlantic hurricane season reaches its peak in September, bringing with it rainfall and flooding, a recent New Jersey court held a sewer overflow resulting from rainfall was not caused, directly or indirectly, by a flood and therefore did not trigger a flood exclusion. This decision, and the insured’s submission of evidence to prove…
A Change in Circumstances Can Make All the Difference in Insurance Coverage
A recent Mississippi case reminds commercial and residential policyholders alike of the importance of updating insurance coverage when circumstances change to avoid a coverage dispute or the loss of coverage altogether. Commercial insureds should coordinate with stakeholders within their organizations to ensure prompt reporting of changing exposures to the personnel responsible for insuring risks. The…
D.C. Circuit Tackles Ensuing Loss Clause and Finds Coverage Under Builders Risk Policies
In construing policies that covered loss “caused by or resulting from water damage” but excluded coverage for loss caused by “dampness of atmosphere” or by “[e]xtremes or changes in temperature,” the United States Court of Appeals for the District of Columbia recently preserved coverage under an ensuing loss exception to the exclusions in 3534 East…
Struck by CrowdStrike Outage? Your Business Loss Could Be Covered
Over the last week, organizations around the globe have struggled to bring operations back online following a botched software update from cybersecurity company CrowdStrike. As the dust settles, affected organizations should consider whether they are insured against losses or claims arising from the outage. The Wall Street Journal has already reported that insurers are bracing…
Using ChatGPT to Interpret Insurance Policies? Eleventh Circuit Opens the Door to AI’s Role in Policy Interpretation
While recently resolving an insurance coverage dispute in Snell v. United Specialty Insurance Company, 102 F.4th 1208 (11th Cir. 2024), an Eleventh Circuit concurring opinion discussed the potential employment of artificial intelligence large language models to interpret policy terms.
The case concerned whether a landscaper’s insurance policy — which generally provided coverage for claims…
Sunscreen Is Not the Only Key to Avoid Getting Burned This Summer: The Importance of a Mid-Year Review of Your Insurance Policies
Summertime. The kids are getting out of school. Maybe you have a vacation planned. Down here in Florida, we make early preparations for the annual “it’s going to be the worst hurricane season on record” reports. Whatever your plans are this summer, it is also best practice to include a mid-year review of your insurance…
One Phrase, Multiple Interpretations – How Your Scope of Cyber Coverage Can Vary Depending on Your Jurisdiction
Do you know what your insurance covers?
This is a deceptively simple question — risk managers rightfully expect to know the scope of their coverages when they build their insurance programs. Unfortunately, judicial interpretation of common policy terms can turn what should be a straightforward question into a morass of uncertainty.
This uncertainty is exemplified…