HNRK Coverage Corner

On March 31, 2023, Justice Cohen of the New York County Supreme Court, Commercial Division issued a decision in Liberty Ins. Underwriters Inc. v. Plaza Condominium, 2023 NY Slip Op 31035(U), granting an insurer’s motion to recoup defense expenses from the insured, after the Court found that there was no duty to indemnify.  The Court explained: 

Liberty established in its original summary judgment papers that it defended the Underlying Action subject to a reservation of rights, which included (implicitly at first, then explicitly) a right to recoup expenses if it were later ...

Insurance law is generally a matter of state law.  Determining the applicable state law can be outcome determinative in a coverage dispute, as different states have different rules concerning the interpretation and enforcement of policy provisions, what claims the insured can bring, and other issues.  As previously noted on this blog, insurance policies frequently have no choice of law provisions, so the applicable law must be determined under a conflicts of law analysis.  Under New York law, where an insurance policy covers risks across multiple states (a common scenario for a large ...

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 ...