HNRK Coverage Corner

On December 27, 2022, the Ohio Supreme Court issued a decision in EMOI Servs., LLC. v. Owners Ins. Co., 2022-Ohio-4649 (Ohio 2022), holding that losses resulting from damage to an insured’s software were not covered under the “Electronic Equipment” endorsement of a property insurance policy.

The insured, EMOI Services, is a computer software company whose product “provide[s] medical offices with service and support for setting appointments, record keeping, and billing.”  EMOI fell victim to a ransomware attack and was forced to pay a $35,000 ransom in exchange for ...

On February 6, 2023, Justice Louis L. Nock of the New York County Supreme Court issued a decision in Wesco Ins. Co. v. Nunez Dental Servs., P.C., 2023 NY Slip Op 30373(U), holding that a criminal acts exclusion barred coverage for a lawsuit alleging violations of the rights of privacy and publicity under the N.Y. Civil Rights Law, despite the fact that the insured was never convicted, or even charged with, a crime.

The underlying lawsuit alleged that the insured, Nunez Dental, misappropriated the image of the plaintiff’s image to advertise Nunez’s dental services.  Among other ...

On January 9, 2023, Justice Lebovits of the New York County Supreme Court issued a decision in Peleus Ins. Co. v RCD Restorations Inc., 2023 NY Slip Op 50034(U), holding that an insurer could not recoup defense costs from its insured, without an express reservation of the right of recoupment.  The Court explained:

Although Peleus provided RCD with coverage in the underlying action/third-party action under a reservation of rights (see NYSCEF No. 17 [reservation of rights letter]), the letter notifying RCD of Peleus’s coverage position did not reserve the right "to recoup expenses ...

On December 22, 2022, Judge Failla of the SDNY issued a decision in 622 Third Ave. Co., L.L.C. v. National Fire Ins. Co. of Pittsburgh, Pa., 21 Civ. 6050, ruling that a liability insurer could not deny defense coverage to an additional insured based on extrinsic evidence that was “bound up with the merits of the underlying case” against the insured.

The Plaintiff in 622 Third Ave., a property owner, was sued by an employee of a subcontractor who was allegedly injured while working on a project at the Plaintiff’s building.  Plaintiff sought coverage as an additional insured under its ...

On September 22, 2022, the Second Circuit issued a decision in Fireman’s Fund Ins. Co. v. OneBeacon Ins. Co., Case No. 20-4282, ruling than an insured’s below limits settlement with an excess insurer satisfied the exhaustion requirement of a higher-tier excess policy.

The insured, ASARCO, was a mining, smelting and refining company facing liability in the hundreds of millions for personally injury claims arising from alleged asbestos exposure.  Its insurance program for the relevant period consisted of three excess policies issued by Fireman’s Fund: the first covered $20 ...