McGuireWoods\' Insurance Practice Description
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McGuireWoods\' Insurance Practice Description

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McGuireWoods\' Insurance Practice Description McGuireWoods\' Insurance Practice Description Document Transcript

  • Insurance Coverage Counseling & Litigation Insurance is a universal fact of business life. Everyone has to have it; common sense requires it. McGuireWoods knows getting the most from it requires strategic decisions about coverage and claims. We assist our clients with every aspect of insurance, from advice on the appropriate coverage, and risk management strategies, to assistance with claims processing and negotiation, through litigation, if necessary. Our track record speaks for itself. Corporate clients and other policyholders have recovered substantial amounts from insurance companies thanks to the efforts of McGuireWoods’ Insurance practice lawyers. McGuireWoods’ insurance practice also knows the best ways to keep clients out of the courtroom. More than two dozen lawyers in multiple offices handle everything from coverage advice to trial. McGuireWoods’ Insurance Coverage Counseling & Litigation Group provides advice and handles disputes over the following types of policies and issues: Advertising Injury Builder’s Risk Business interruption Business Owners Policy (BOP) Commercial general liability Directors and Officers Employee dishonesty Errors and Omissions First party property and boiler Inland Marine Products liability Professional liability Property and Casualty Toxic torts and environmental Asbestos coverage London market policies-including Lloyd’s Underwriters
  • Broker/agent liability Captives Reinsurance This practice also provides advice to corporations, banks and other business entities on insurance issues as they relate to these and other matters: •Mergers and acquisitions •Regulatory and corporate issues •Receivership •Going public •Federal and state securities Insurance disputes and litigation often erupt due to a lack of understanding the coverage, policy requirements and claim filing process. That is why McGuireWoods works with companies from beginning to end reviewing and creating policies; filing claims; reacting to insurers’ coverage decisions; and when necessary, making the decision to arbitrate or litigate. McGuireWoods’ Insurance practice offers relevant experience, strategic counsel and the latest technological support. Perhaps more importantly, we value, and are driven by, relationships. Representative Work The following matters are a sampling that reflects the group's capabilities across a range of industries and insurance issues: Negotiation of various facets of coverage for a Fortune 200 company for its defense costs and potential liability associated with multiple-party asbestos premises lawsuits in Louisiana, Texas, California and Washington. The representation required negotiation of agreements with a spin-off company regarding indemnity duties and rights to insurance coverage, identification and retrieval of applicable insurance policies from the 1950s through the 1980s, placing on notice all relevant carriers including primary and excess carriers, and drafting cost sharing agreements among the client and all of the primary carriers over the relevant thirty-year period. Recovery under a commercial property policy on a million dollar inventory loss due to employee theft. McGuireWoods represented the appliance distributor in the accounting negotiations with its insurer under an employee theft policy. Analysis for acquisition purposes of the asbestos exposure of a division of a company. McGuireWoods evaluated the likelihood of exposure to suits based on asbestos-related injury, evaluated the probable cost of the exposure, and determined whether the division had sufficient insurance to maintain profitability. The representation involved 2
  • analysis of over 150 policies and a number of settlement agreements dating as far back as the Wellington Agreement in 1985. Representation of a Fortune 500 company in persuading its carrier to provide defense and indemnity in connection with, and ultimately to settle, a gunshot case in Western Kentucky. Representation of an entertainment/hospitality corporation in persuading its primary and excess carriers to contribute $1.4 million to settlement of a Missouri class action brought under the Telephone Consumer Protection Act. Representation of a municipality against various underwriters at Lloyds of London on an insurance backed warranty given for a bridge surface coating. After McGuireWoods obtained a verdict for the municipality at trial, the underwriters unsuccessfully appealed to the Virginia Supreme Court. Representation of a national design/build firm in litigation with a subcontractor’s liability insurance carrier. After McGuireWoods won on a major issue on summary judgment, the case settled for more than the policy limits. Representation of a Fortune 200 company on coverage issues related to multiple individual and class action cases alleging personal injury from adulterated food. Prosecution and mediation of a nine figure Bermuda Form claim for a Fortune 50 company against an offshore high excess insurance carrier for catastrophic losses incurred in pattern product liability claims and lawsuits. Represented a local quasi-governmental entity seeking coverage for defense costs pursuant to its CGL policy after successfully winning an underlying lawsuit for a constitutional inverse condemnation claim. McGuireWoods has represented insurers in coverage disputes involving health, life, accidental death, short- and long-term disability, including ERISA and non-ERISA matters. The Insurance Coverage Group represented an individual in a health coverage case against Allstate in U.S. District Court for the Eastern District of Virginia and obtained summary judgment on the issue of coverage and an award for punitive damages for bad faith denial of the claim. The Insurance Coverage Group’s lawyers have advised companies on a variety of D&O and casualty coverage matters, including assessments of differences in policy language offered by competing carriers on renewal. Represented an international P&C company in coverage litigation over the applicability of personal injury coverage to claims for trespass arising from a national project to install certain utilities in railroad rights of way. Represented a coal producer in its efforts to have combined insurers with over $100 million is policy limits settle with nearly 50 plaintiffs that have sued it and its affiliates over a devastating mine collapse. Represented a public coal producer in an action in state court in Oklahoma against a pool that included Lloyds of London and three other major insurers. The claim involved the 3
  • equivalent of a business interruption policy covering the flood of a coal mine in Garret County Maryland. By virtue of a carefully prepared bad faith claim and vigorous discovery, we settled for $3.7 million which was over 200% of the actual out of pocket loss the client suffered less than six month after the case was filed. Represented a crane and rigging client in a claim against its commercial liability carrier and an action against its care custody and control insurer arising out of an industrial accident during the course of expanding a polypropylene manufacturing facility in Marcus Hook, Pennsylvania. After extensive negotiations, we secured the agreement of the commercial liability insurer to pay to settle all liability of the client to the owners of and various claimants working on the project. Thereafter, we, together with the commercial liability insurer, sued the care custody and control insurer for contribution. We reached a settlement with both the insurers that resulted in cash payments to the client which covered all of its costs and expenses on the project and most of its anticipated profit. Represented a national bank in actions against its D&O and Fidelity Bond carriers for losses occasioned by a multimillion dollar letter of credit fraud perpetrated by a group of customers with the complicity of one of the bank's employees. After lengthy litigation in federal court in Pittsburgh, we reached a settlement with the insurers, under which the insurers paid over $4 million which represented substantially all the amounts paid by the bank to beneficiaries of the letters of credit which could not be recovered from the perpetrators of the fraud. Represented a large millwright in a dispute with its workers compensation insurer which was seeking approximately $200,000 in retrospective premiums. After we refused payment, the insurer sued in federal court in the Eastern District of Virginia. We secured summary judgment for our client on three separate bases, and the insurer's claim was dismissed in its entirety. We represented Medical Savings, an Indiana-based insurer, in a lawsuit filed as a nationwide class action alleging breach of contract, bad faith and unjust enrichment, among other claims. The named plaintiff sued Medical Savings in federal court in South Carolina on behalf of all U.S. citizens covered by the company's insurance plans who have had any claim improperly delayed or denied at any time since 2000 (excluding insureds who are members of a state-wide class previously certified in Florida). McGuireWoods represented Siemens Westinghouse Power Corporation in a lawsuit filed in North state court by a group of Lloyds of London syndicates. The Lloyds syndicates sought a declaratory judgment that insurance policies issued to Siemens provided no coverage for tens of millions of dollars in losses caused by damage to two turbine engines installed at a power plant. We had the case transferred to the Business Court and engaged in extensive discovery. The case settled after two days of depositions in London with the Lloyds syndicates agreeing to pay a substantial sum to Siemens. The firm represented several food production companies in a declaratory judgment action filed in the Eastern District of North Carolina by an insurance company seeking a judgment that it owed no coverage to its insureds for a nuisance lawsuit filed against 4
  • the Smithfield companies in Missouri state court. The judge granted our motion to dismiss the case, holding that the insurance company must pursue its claims in Missouri state court where the underlying lawsuits were pending. Represented a grading contractor in a coverage lawsuit filed in the Western District of North Carolina federal court by a general liability insurer. The insurer was seeking a judgment that it had no obligation to defend or indemnify the contractor against a lawsuit filed against the contractor by a golf course owner alleging that the contractor’s defective work caused water and sedimentation damage to the golf course. The federal court granted the motion to dismiss we filed, holding that the insurer could not pursue its claims against the insured in federal court. Defended a client in combined state and federal court proceedings in Alabama in a rescission and coverage action arising out of the HealthSouth corporate scandal, in which numerous HealthSouth directors and officers have pled guilty to participating in a securities fraud that is estimated to have involved billions of dollars in fraudulent entries in HealthSouth’s financial statements. Defended a client in a breach of contract and bad faith action involving a claim by an officer of the insured company seeking reimbursement for defense costs incurred to defend a lawsuit related to the sale of technology licenses. We prevailed on partial motions for summary judgment. McGuireWoods represented an interstate trucking company against an insurer and obtained what was then said to be the largest North Carolina bad faith recovery over $4 million. The Insurance Coverage Group analyzed a technology errors and omissions coverage for chip manufacturer to whom technology company outsourced the manufacture of chips that after being incorporated into hard drives turned out to be defective. McGuireWoods has extensive experience analyzing coverage for nursing home liability claims, including choice of law considerations for nursing homes that operate in multiple states, multiple insurance policies with competing and inconsistent coverage grants, anti-stacking clauses, duty to defend, indemnify and post appellate bonds. Represented a policyholder in connection with directors and officers coverage in complex securities class action arising out of anti-trust lawsuits filed nationwide against insured. McGuireWoods has extensive experience litigating the definition of third-party property damage and intentional acts exclusions in environmental liability claims alleging policyholders’ improper waste disposal operations. The Insurance Group has experience in asbestos liability coverage in complex case involving dozens of primary, excess and upper layer excess insurers for a policyholder that morphed through as series of corporate changes, mergers and acquisitions into a single company with multiple lines of coverage for multiple insureds. Issues involved allocation of defense and indemnity obligations for each line of coverage and where multiple policies issued in different states for each insured. Represented policyholder, a gaming vessel, destroyed by ice on the Missouri River. The coverage issues involved analysis of the Inchmaree and sue-and-labor clauses. 5
  • Analyzed of coverage afforded policyholder manufacturer, designer and installer of tensile membrane roofs under professional liability and general liability policies where roofs sustain damage during hurricane and gale force winds. Analyzed coverage for policyholder businesses that sustain business and property losses as a result of catastrophic events such as hurricanes, floods and fire. McGuireWoods has advised companies (as well as their brokers) when obtaining Directors & Officers Liability insurance, respecting coverages and other aspects of the insurance contract. Served as lead counsel in bench trial in U.S. District Court in Alexandria, Virginia in a breach of contract action in connection with primary residence language in policy. Case settled favorably for client. Served as lead counsel in U.S. District Court in Alexandria, Virginia representing client in a breach of contract/surety/indemnification. We won judgment of approximately $300,000 for client in bench trial. Acted as lead counsel in U.S. District Court in Richmond defending a client in claim involving an employee dishonesty policy. We won the case on a motion for summary judgment. Handled case in U.S. District Court Richmond in a declaratory judgment action in a case involving property damage and a dispute over what is covered property based on application presented by broker. Case settled favorably for client prior to trial at a settlement conference. Defended client in U.S. District Court in Alexandria in a breach of contract claim. The insurer denied coverage based on pollution exclusion and no oral modification of contract. Court awarded directed verdict judgment in client’s favor. Served as lead counsel U.S. District Court representing a client in a declaratory judgment action involving insurance coverage issue related to oil spillage and pollution exclusion. Represented a Fortune 100 company in a lawsuit filed by multiple Lloyd’s of London syndicates in the North Carolina Business Court to recover insurance for damage to turbine engines caused by debris within the engines at start up. During the second day of depositions of Lloyd’s witnesses in London, we negotiated a multi-million dollar settlement with the Lloyd’s syndicates. Represented a national power production and transmission company in connection with a multi-million first-party property loss arising from an explosion at one of its power- generation plants. Represented a Fortune 200 company in the negotiation of various facets of coverage for its defense costs and potential liability associated with multiple-party asbestos lawsuits in Louisiana, Texas, California and Washington. The representation required negotiation of agreements with a spin-off company regarding indemnity duties and rights to insurance coverage, identification and retrieval of applicable insurance policies from the 1950s through the 1980s, placing on notice all relevant carriers including 6
  • primary and excess carriers, and drafting cost sharing agreements among the client and all of the primary carriers over the relevant thirty-year period. Represented a firm client under a commercial property policy on a $1 million dollar inventory loss due to employee theft. We worked with the insured to assist throughout the claims adjustment and negotiated the settlement of almost 100% recovery. Represented an employee benefits outsourcing company in connection with claims against its professional liability insurer. The claims related to the insurer’s denial of coverage for an arbitration proceeding arising from our client’s alleged negligence in the administration of an employee benefits plan. Represented a national bank in a class action filed in state court in Kentucky against the bank and an insurer that provided life, loss of income and credit insurance to bank customers. Represented a North Carolina property owner in coverage litigation arising from a liability carrier’s refusal to defend the client. The insurer contended that damages arising from soil subsidence were barred by the pollution exclusion in the policy. Represented a national bank in connection with claims against an issuer of weather-risk derivative insurance products and weather-risk reinsurance. The claims related to letters of credit issued by the bank that secured the weather-risk products. Analysis, for acquisition purposes, of the asbestos exposure of the target company in a potential acquisition. McGuireWoods evaluated the likelihood of exposure to suits based on asbestos-related injury, the probable cost of the exposure, and determined whether the company had sufficient insurance to maintain profitability. The representation involved analysis of over 150 policies and a number of settlement agreements dating as far back as the Wellington Agreement in 1985. Prosecution of breach of contract and bad faith claims in coverage litigation against a long-term disability insurer arising from a denial of benefits to a Baptist minister who had significant cardiac disease. Representation of a municipality against various underwriters at Lloyd’s of London on an insurance-backed warranty given for a bridge surface coating. The Virginia Supreme Court ultimately affirmed the verdict for the municipality obtained by McGuireWoods at trial. Representation of a national design/build firm in litigation with a subcontractor’s liability insurance carrier. After McGuireWoods resolved a major issue on summary judgment, the case settled for more than the policy limits. Representation of a Fortune 200 company on coverage issues related to multiple individual and class action cases alleging personal injury from adulterated food. Prosecution and mediation of a nine figure “Bermuda form” claim for a Fortune 50 company against an offshore high-level excess insurer for catastrophic losses incurred in pattern product liability claims and lawsuits. Handled a claim in federal court in Los Angeles against involving a leading semiconductor corporation. The insured sought insurance coverage for a $12 million 7
  • settlement entered into with its customer arising from defective hysteretic controller chips. We were involved in coverage litigation in the Eastern District of Pennsylvania arising from the death of four security contractors who were murdered in Iraq. Handled coverage litigation in federal court in Atlanta, Georgia arising from over 100 suits and claims concerning medical negligence. We were involved with a D&O insurer in state and federal court proceedings in Alabama in a rescission and coverage action arising out of the HealthSouth corporate scandal, in which numerous HealthSouth directors and officers have pled guilty to participating in a securities fraud that is estimated to have involved billions of dollars in fraudulent entries in HealthSouth’s financial statements. Litigated a class action lawsuit filed in the District of South Carolina. The plaintiff sought certification of a class of all insureds in South Carolina for the period from January 1, 1997 to the present whose medical bills the insurer did not pay because those bills exceeded the insurer’s computation of “reasonable and customary” charges. Our attorneys handled a breach of contract and bad faith action filed by an officer of the insured company seeking reimbursement for defense costs incurred to defend a lawsuit related to the sale of technology licenses. Defense of national personal-lines insurer in connection with an investigation by the North Carolina Department of Insurance and a related putative class action pending in Guilford County, North Carolina against the insurer, an insurance agency and related motor club. The class action complaint alleges that employees of the insurance agency fraudulently enrolled and charged insureds for memberships in the motor club. Our representation has included responding to Department of Insurance requests for information and meeting with Department officials as well as the defense of the class action. Involved in litigation with a Fortune 100 computer services company in Delaware seeking to recover hundreds of millions of dollars in expenses the company incurred to upgrade electronic data processing systems for the turn of the century. After two years of hard-fought litigation in one of the earliest “sue and labor” cases, the opposing party dismissed its claims with prejudice. Handled in coverage litigation in Pennsylvania and Kentucky arising from claims against medical clinics relating to methadone treatments for opiate addiction. Representation of a national workers compensation insurer as North Carolina counsel in a declaratory judgment and breach of contract lawsuit against a national pool of workers compensation insurers. The pool agreed to share risks assumed by virtue of their participation in assigned-risk workers’ compensation insurance plan, and the risks were shared through reinsurance. We sought a ruling that the pool’s attempts to require additional financial security from our client as part of the reinsurance program were invalid and against public policy. 8
  • Defense of a property-casualty insurer in a reinsurance arbitration arising from a commercial airplane crash regarding whether several million dollars in interest was covered under the applicable treaty. Defense of a general liability insurer in bankruptcy court in San Antonio, Texas arising from a dispute regarding the applicability of self-insured retentions to multiple personal injury cases pending against the bankrupt insured. Involved with a bad faith lawsuit against a reinsurer in federal court in North Carolina in connection with its handing of multi-site, multi-decade environmental coverage litigation. Involved in coverage litigation arising from multiple state and federal class actions lawsuits against a multinational business alleging that construction of certain utilities was in violation of class members’ property rights. Defense of a national property-casualty insurer in coverage litigation in Albuquerque, New Mexico in connection with over 200 claims of sexual misconduct against the Archdiocese of Santa Fe. Defense of a professional liability insurer in coverage litigation arising from alleged sexual misconduct by a North Carolina psychologist in connection with the treatment of one of his patients. Defense of a general liability insurer in federal court in Miami, Florida in a coverage lawsuit against a religious order arising from the alleged sexual misconduct of a priest. Defense of an employment practices liability insurer sued in state court in Florida for breach of contract arising out of the insurer’s denial of coverage for a sexual harassment lawsuit. The case settled at mediation with a nominal payment from our client. Litigated coverage involving a life insurer regarding material misrepresentations by the insured in the policy application process. Defense of medical benefits insurer in a lawsuit filed in North Carolina federal court involving applicability of an alcohol consumption exclusion to claim for medical benefits arising out of motor vehicle accident. Handled a declaratory judgment lawsuit in Texas state court against a national college fraternity arising from claims against the insured for injuries that took place following a fraternity initiation party. Litigated a declaratory judgment lawsuit in federal court in Florida involving claims arising from alleged toxic mold in a home. Handled in litigation in federal court in the Eastern District of North Carolina and in a subsequent arbitration regarding insurance coverage for alleged water and mold damage at several grocery store buildings in eastern North Carolina caused by Hurricane Floyd. Represented clients in actions involving the major accounting firms in litigation (lawsuits and arbitrations) for malpractice, securities fraud, RICO, breach of contract and other claims. 9
  • Represented the London office of PricewaterhouseCoopers in a case against one of its malpractice insurers which recovered approximately $3 million (90% of the amount claimed) for failing to fund a settlement of fraud claims brought in England. Litigated actions involving major law firms in cases involving E&O claims. Represented law firms in a variety of matters adverse to their insurers including challenges to the sufficiency of self-funded reserves and successful challenges to denials of duties to defend or fund a defense. Represented directors and officers in obtaining a defense and/or coverage in a variety of matters ranging from antitrust claims against shipping companies to fraud claims against bank D&Os and securities claims for D&Os of publicly traded companies. McGuireWoods has represented engineers, an architect, various financial professionals and medical management companies in securing coverage for them in claims against them even though reservation of rights have been issued. McGuireWoods represented Murray Energy in collecting over $20 million in property damage claims related to a mine collapse and another $13 million in business interruption coverage. Our attorneys also counseled Murray with reference to liability, ELIC, Workers Compensation and property/business interruption coverage regarding the collapse of a mine in the Southwest which resulted in several deaths. McGuireWoods’ coverage attorneys have arbitrated and litigated reinsurance claims (mostly on behalf of reinsureds/cedants) with reference to a variety of coverages. We have experience helping a number of companies (accounting firms, other insurers, etc.) prosecute claims against the estates of insurers being liquidated. During 2007 - 2009, one of our attorneys assisted a client in allocating payments for defense and settlements of multiple silica and chemical exposure lawsuits filed across the country to large self-insured periods. Handled insurance coverage litigation over coverage for environmental and toxic tort liabilities in throughout the United States, including jury trials and appeals. Represented a party in a lawsuit against architect and PL insurers over number of occurrences under a Architect & Engineers Professional Liability Policy, resolved by settlement Assisted client in preparing settlement for a claim against an Architecture firm that exhausted coverage under a single PL policy Represented a client in federal court litigation concerning whether construction defects and claims against window installation company constituted "property damage" and an "occurrence". Handled coverage litigation in Delaware state court for alleged property damage caused by the installation of polybutalene pipes. Handled coverage litigation in New York, Minnesota (including bench trial) and Texas for alleged bodily injury caused by the implantation of silicone breast implants. 10
  • Provided coverage counseling for litigation filed in California arising from alleged defects in computer chips, issues presented included whether there the allegedly defective chips constituted property damage under a general liability policy and whether claim was timely presented under the claims made technology liability policy. Assisted client in presenting EEOC claim for coverage under an EPL policy. Handled coverage litigation in North Carolina federal court concerning damage to several grocery stores caused by Hurricane Floyd and whether an appraisal could be mandated absent agreement of both the insured and the insurer. Resolved by arbitration. Represented a client in coverage litigation in North Carolina federal court concerning damage to furniture store showroom caused by heavy rains. Provided coverage counseling advice concerning mold claims presented by homeowners and business owners in North Carolina, New York, Connecticut, Tennessee and Ohio. Assisted client, Dealers Financial Services, LLC, in recovering $3,200,000 in reserve funds from claims administrator following the decision of the claims administrator to seek bankruptcy protection in Illinois. Assisted client, Dealers Financial Services, LLC, in the formation of a captive reinsurer domiciled in the Turks & Caicos. Evaluated insurance programs and exposures of target companies as part of due diligence teams established for syndicated finance agreements and mergers and acquisitions. Provided risk management consultation indemnification and insurance provisions in transactional documents. Assisted Davidson College and Central Piedmont Community College to update insurance programs, protocols and participant releases for foreign study programs sponsored by the colleges. Provided a policy audit to a newly merged company providing nuclear medicine services in the United States and Europe to ensure their professional liability insurance provided the appropriate coverage. Reviewed a specimen policy for a financial investment firm about to purchase coverage to provide an opinion that the proposed E&O and D&O policy provided the correct aspects of coverage. For additional information on how McGuireWoods’ Insurance Coverage Counseling & Litigation Group can assist you, please contact the Group Leader, Collin J. Hite. Direct Dial: 804-775-7791 / E-mail: chite@mcguirewoods.com 11