All posts by DuaneMorris3

Lengthy Oral Argument on Potential Consolidation of Business Interruption Coverage Cases Related to COVID-19

By Damon Vocke

On July 30, the Judicial Panel on Multi-District Litigation (the Panel) heard oral argument of extraordinary length on the potential consolidation of all the federal cases involving business interruption coverage relating to COVID-19 and/or the COVID-19 shut-down orders.  There are some 449 such federal cases, approximately 200 of which are putative class actions.

Normally, the arguments for consolidation are short.  This one was not.  This was likely due to the importance of the pandemic-related litigation, as well as the multiplicity of positions.

Several policyholder plaintiffs argued for national consolidation.  Insurer-specific consolidation was the most common fall-back position among the policyholder plaintiffs.  Several policyholder plaintiffs argued against any consolidation – most notably, David Boies.  Counsel for some of the insurer defendants argued on behalf of the industry against any consolidation. Continue reading Lengthy Oral Argument on Potential Consolidation of Business Interruption Coverage Cases Related to COVID-19

Bid to Invalidate Virus Exclusion in Pennsylvania Federal Court

Berkshire Hathaway and one of its units on Monday urged a Pennsylvania federal court to toss a restaurant’s suit seeking insurance coverage for losses caused by the COVID-19 pandemic, arguing that a virus exclusion “plainly applies” to the restaurant’s claims.

Berkshire Hathaway and National Fire are represented by Robert L. ByerJulie S. Greenberg and Damon N. Vocke of Duane Morris LLP.

To read the full text of this article, please visit the Law360 website.

Duane Morris Helps Insurance Industry to a Major Win on COVID Losses for Business Interruption Before the Pennsylvania Supreme Court

By Damon N. Vocke

In the bellwether case of Joseph Tambellini, Inc. v. Erie Insurance Exchange, the Pennsylvania Supreme Court was petitioned under its King’s Bench powers to assume plenary jurisdiction of an insurance coverage dispute that had been filed in the Court of Common Pleas, Allegheny County, Pennsylvania.  The high court was asked to decide critical legal issues that would have impacted thousands of other insurance claims that might arise in the future from the COVID-19 pandemic. Duane Morris was retained by insurer trade associations, including APCIA, NAMIC, PAMIC, and the Insurance Federation of Pennsylvania (the “Insurance Industry Amici”), to oppose this extraordinary petition. Continue reading Duane Morris Helps Insurance Industry to a Major Win on COVID Losses for Business Interruption Before the Pennsylvania Supreme Court

An Update on Congressional Efforts to Compel Coronavirus Business Interruption Insurance

By Dominica C. AndersonPhilip R. Matthews and Daniel B. Heidtke

We previously wrote about the growing number of lawsuits by insureds seeking business interruption insurance coverage for business losses in response to the novel coronavirus (here and here), and the constraints that state and federal governments should face were they to compel such coverage. We also previously detailed nationwide efforts aimed at enacting legislation compelling business interruption and contingent business interruption insurance for COVID-19 losses.

As of the date of this update, eight states have proposed a number of bills relating to business interruption insurance. Continue reading An Update on Congressional Efforts to Compel Coronavirus Business Interruption Insurance

Pennsylvania Superior Court Rules That Insurer Waived Coverage Defense by Not Including It in the Reservation of Rights Letter

By Lawrence E. Currier

In a split 2-1 decision in Selective Way Insurance Company v. MAK Services., Inc., et al. al., 2020 PA Super 103 (Case Number 1289 EDA 2019), issued April 24, 2020, the Pennsylvania Superior Court (the “court”) held that a reservation of rights letter from an insurer reserving its right to deny coverage after it begins to defend a claim on behalf of a policyholder must include at least some detail about potential exclusions that could apply. The court reversed an order of the trial court granting summary judgment to Selective Way, the insurer (“Selective”). Continue reading Pennsylvania Superior Court Rules That Insurer Waived Coverage Defense by Not Including It in the Reservation of Rights Letter

Coronavirus Business Interruption Litigation Ramping up to Include Several Class Action Suits Against Single Insurers

By Dominica C. Anderson, Philip R. Matthews and Daniel B. Heidtke

As the coronavirus cases start peaking in at least some parts of the United States, the American courts are beginning to experience mounting cases relating to claims against businesses for coronavirus infections and against insurers for alleged business interruption coverage. A few weeks ago, some well-known restaurants in the United States commenced litigation against their insurers over claims for insurance coverage stemming from business interruption. These individual cases will raise a number of issues whether there is direct physical loss to covered property and whether the virus exclusions in the policies bar coverage. As a host of other types of businesses have followed by filing a number of individual suits in several states against their insurers. Last week, however, a new form of litigation has been filed with multiple class action insurance coverage lawsuits being brought by alleged representatives against single insures who are claimed to have written business interruption policies to a number of businesses in given areas or nationwide. Continue reading Coronavirus Business Interruption Litigation Ramping up to Include Several Class Action Suits Against Single Insurers

Lawmakers Continue Efforts to Compel Coronavirus Business Interruption Insurance

By Dominica Anderson, Philip Matthews and Daniel Heidtke

We previously wrote about the growing number of lawsuits by insureds seeking business interruption insurance coverage for business losses in response to the novel coronavirus and ways that state and federal governments were beginning to consider ways that they might compel such coverage.

The potential cost of business continuity losses is enormous. The Congressional Research Service issued a report to Congress on the financial impact to insurers for the cost of covering business interruption claims. The report explains that some industry sources estimate that the cost of covering business interruption claims ranges from $110 billion to $290 billion per month.  In a more recent letter, insurance industry leaders explained, “recent estimates show that business continuity losses just for small businesses of 100 or fewer employees could amount to between $220 billion to $383 billion per month.  Meanwhile, the total surplus for all of the U.S. home, auto, and business insurers combined to pay all future losses is only $800 billion.” Continue reading Lawmakers Continue Efforts to Compel Coronavirus Business Interruption Insurance

California Court of Appeal: Third Party, Additional Insured Bound by Policy’s Arbitration Clause

By Daniel B. Heidtke

In an opinion filed on the last day of 2019, the California Court of Appeal, Third District, reversed a trial court’s holding that an additional insured was not bound by an arbitration agreement in an insurance policy.  In Philadelphia Indemnity Insurance Company v. SMG Holdings, Inc., Case No. C082841 (certified for publication on January 28, 2020), the court held that an arbitration agreement in a commercial general liability policy (“CGL”) issued by Philadelphia Indemnity Insurance Company (“Philadelphia”) bound SMG Holdings, Inc. (“SMG”), a “third party beneficiary” under the policy that was also “equitably estopped” from avoiding the arbitration clause.  The court reversed the trial court, vacated its order denying Philadelphia’s petition to compel arbitration, and directed the trial court to order arbitration of the coverage dispute. Continue reading California Court of Appeal: Third Party, Additional Insured Bound by Policy’s Arbitration Clause

Florida Federal Court recognizes Federal Admiralty Rule of Strict Enforcement of Warranties in Marine Insurance Preempts State Law

We are pleased to present a decision in which we prevailed from the United States District Court for the Southern District of Florida.

The ruling is significant for its holding that the 11th Circuit Court of Appeals [encompassing the US Southeast including Florida] recognizes an established Federal Admiralty rule of law that warranties in marine insurance are to be strictly enforced. The ruling clarifies a number of inconsistent decisions in Florida holding that only navigational limits warranties were entitled to strict enforcement, and that the Florida Anti-Technical statute otherwise applied. The primary distinction is that the strict enforcement of a warranty excuses the policy from responding in the event of a violation independent of a causal relationship between the violation and the claimed loss, whereas  many states’ laws, such as Florida’s Anti-Technical Statute, require the insurer to prove a causal relationship between the violation and the claimed loss to deny a claim.