1. Consult with outside counsel regarding return to work and vaccination policies, given the complications between EEOC guidance and state laws/executive orders.
2. After a brief COVID respite, social inflation has resumed, with the underlying root causes of litigation funding, heightened economic disparity and a sophisticated plaintiffs’ bar continuing to be of concern. While the impact has not yet reached that of the mid-1980s, social inflation’s threat will continue to grow. To blunt the effects, insurers must remain vigilant in early case evaluation, be prepared to invest in the defense of problematic cases, and communicate to policyholders the economic burden that social inflation represents to society.
3. Science continues to “connect the dots” between climate change and catastrophic/extreme weather events. This will provide insurers greater precision in catastrophic modeling and rating, but could also lead to reluctance in writing business in areas disproportionately impacted by climate change. Regulatory resistance in those areas should be anticipated. Additionally, insurers will be challenged by an ongoing population shift to the drought-prone West and hurricane-susceptible coastal Southeast.
4. The various subtopics that comprise ESG (Environmental Social and Corporate Governance Factors) (such as climate change, Diversity Equity and Inclusion, etc.) should be a permanent board agenda item. Good loss control measures would be to document via the board minutes, undergo assessments, create metrics for improvement and systems for monitoring, as well as consulting with outside counsel.
5. Communication is critical – with your employees, your customers, your vendors, all of your stakeholders.

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1. In resolving ambiguity over the meaning of “direct physical loss to property” or “direct physical damage to property,” it is best to pair supportive dictionary definitions with analysis that show those definitions are consistent with a holistic reading of the policy.
2. Though courts will generally apply ISO-drafted virus exclusions, in light of policyholders’ attempts to reframe the cause of loss as something other than a virus (e.g., civil authority orders) or to distinguish between losses caused by a pandemic and losses caused by a virus, it is important to emphasize that the predominate cause of the insured’s loss is a virus.
3. Despite early appellate success for insurance carriers, appellate review is still in the early stages without any state appellate court weighing in on coverage. In the end, these coverage issues do not raise federal questions and therefore the final word rests with those state courts.

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1. Restrictive covenants that prohibit solicitation of employees and clients are generally enforceable, with a few exceptions.
2. Restrictive covenants that prohibit competition are generally not enforceable, with a few exceptions.
3. A court will typically only grant equitable relief, such as a temporary restraining order and/or a preliminary injunction, if the court finds that money damages alone are inadequate to address the harm to the party seeking to enforce the restrictive covenant.
4. Litigation arising out of restrictive covenant disputes is not generally covered by insurance (e.g., breach of contract, intentional torts).

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1. When reserving rights, be mindful of insured’s potential right to independent counsel – and assess whether the potential benefit of asserting a particular reservation outweighs the potential increased cost of defending using independent counsel. Many states — like Washington and Mississippi — find that the right to independent counsel follows the law of the state that the lawsuit is venued in, rather than the state where the policy was issued.
2. Choice of law for purposes of the (potential) right to independent counsel may not be the same as the law governing the insurance policy.
3. When presented with a claim for which there are insufficient policy limits (because of multiple claimants, multiple defendants, multiple suits), document what you do/offer so you can later demonstrate your reasonableness and good faith if called into question. While some states follow a “first in time, first in right” approach, other states may require an insurer to first attempt to settle all claims, as to all insureds.
4. Intervention in an underlying lawsuit against your insured not only can help allocate a verdict between covered and uncovered damages, but also may assist in further settlement/mediation by forcing the insured and claimant to consider the potential lack of or limitation to coverage more seriously.

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1. A person who is covered under a UM/UIM coverage grant is a first-party insured to whom the insurer owes a duty of care, and should be treated accordingly.
2. Determine and pay damages that are not in dispute, without conditions.
3. Remain extra-vigilant when a claim is being handled by a TPA.
4. If a mistake is made, acknowledge it and correct it ASAP.
5. Know the law of the state that governs the insurer’s conduct, and be careful when denying UM claims in Oklahoma.

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1. While the e-cigarette industry faced relatively few lawsuits in its first decade of existence, in recent years hundreds of vaping-related suits have been filed throughout the country with the vast majority likely yet to come.
2. Underlying vaping claims can implicate a variety of policyholders in the chain of manufacturing and distribution.
3. Vaping-related claims often raise important questions regarding whether addiction constitutes bodily injury, the number of occurrences, which policies may be triggered, and the potential application of exclusions such as pollution and cannabis exclusions.
4. Indemnity agreements can have a significant impact on coverage, including defense obligations.

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1. Under the new administration, the EPA is intensely focused on PFAS and has a blueprint for aggressive regulatory action over the next several years.
2. We can expect to see a steady increase in enforcement actions by federal and state authorities against corporations, municipalities and other entities to address PFAS contamination.
3. All insurers should be focusing on understanding their books of business and exposures to PFAS so that they are adequately prepared to address the claims that are sure to come.
4. Litigation against PFAS producers/suppliers and manufacturers who used PFAS in their products represents billions of dollars of liability and is increasing at an exponential pace.

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1. The Zeig Rule – which allows insureds to access excess coverage even after settling with primary carriers below those carriers’ limits — has been crumbling over the last fifteen years.
2. Most courts now seem to follow some version of the approach set forth in Qualcomm v. Certain Underwriters, 73 Cal. Rptr.3d 770 (Cal. App. 2008) and Comerica v. Zurich Ins. Co., 498 F.Supp.2d 1019 (E.D. Mich. 2007). These courts closely review the language of the excess policy to determine an excess carrier’s obligations. They find a below-limits settlement waives excess coverage when the excess policy defines “exhaustion” as payment of “full underlying limits,” or something similar.
3. Recently, a Connecticut Appeals Court took this even further: finding an insured lost rights to excess coverage through a below-limits primary settlement, even though the excess policy only referred in generic terms to “exhaustion,” i.e., it did not contain specific language requiring the underlying carrier to pay “full underlying limits.”
4. On the other hand, a few courts — specifically, in Delaware — are still bucking this trend. The Delaware courts have doubled down on the Zeig Rule, and “recognize no business reason for an excess insurer to care whether the payment … was for the policy’s full dollar value,” so long as the insured “fills the gap” and the excess insurer’s liability only begins at its own attachment point. On this issue (and others) Delaware has become increasingly dangerous for insurers, requiring careful strategic thinking in dealing with Delaware insureds.

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1. The duty to defend is the most important liability coverage issue. It is the only issue that applies to just about every claim, no matter the type of primary policy or facts.
2. The extreme breadth of the duty to defend standard — generally, any potential for coverage; an undefined standard — leads to courts concluding that an insurer owes a defense, despite the insurer believing otherwise.
3. Insurers that are found to have breached the duty to defend will likely face challenges when objecting to the consequences imposed on account of the breach.

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