HNRK Coverage Corner

On December 8, 2025, Judge Rennie of the Superior Court of Delaware issued a decision in The Cigna Group v. XL Specialty Ins. Co., C.A. No. N23C-03-009, holding that a civil investigative demand (CID), issued by the U.S. Department of Justice in connection with a False Claims Act investigation, constituted a “Claim” under the insured’s E&O policy, triggering coverage for defense costs.

Responding to a government investigation can be a costly proposition.  And the issue of insurance coverage for the resulting attorneys’ fees and other defense expenses is a perennial issue.  ...

This week at the Coverage Corner, we are looking at a recent Seventh Circuit decision that offers guidance on two issues under Indiana law: (1) an excess insurer’s duty to participate in a pre-suit mediation where the underlying policy limits have not yet been exhausted but “would be” exhausted in the event of a settlement; and (2)  whether a party qualified for coverage as an additional insured based on facts outside the underlying complaint.

Background

The insurance coverage dispute in Atlanta Gas Light Company & Southern Company Gas v. Navigators Insurance Company, Case Nos ...

This week at the Coverage Corner, we take a quick look at a recent decision from the Southern District New York in which the Court, following a bench trial, ruled in favor of a policyholder and used the mutual mistake doctrine to reform the policy to provide coverage.

Background

The facts are relatively straightforward.  The policyholder, Systems 2000 Plumbing Service (“Systems 2000”) sought coverage from its primary (Travelers) and excess (GuideOne National) insurers in connection with claims against Systems 2000 arising from a fire at the Manhattan apartment building where ...

Last month, the Second Circuit held that commercial general liability insurers owed no duty to defend or indemnify a retailer of unfinished firearms in underlying “ghost gun” lawsuits because the lawsuits at issue did not allege injuries arising from an “accident” as defined by Texas law and were thus not “occurrences” under the policies.    

Background

In Granite State Insurance Company v. Primary Arms, LLC, the insurance dispute arose from lawsuits by the State of New York and the cities of Buffalo and Rochester against Primary Arms, LLC (“Primary Arms”), a ...

This week at the Coverage Corner, we discuss Flextronics Int’l, Ltd. v. Allianz, 25-CV-1511(PAE)—a recent decision out of the Southern District of New York that examines an often disputed, but less-frequently litigated, issue in the realm of D&O coverage:  the allocation of a settlement payment between covered and non-covered loss.  Settlements often resolve a mix of claims against the insureds, some of which (such as securities fraud) may be subject to coverage and others of which (such as breach of contract claims) may not be.  Alternatively, the same settlement might be made on ...