Emerging Issues

Nuclear Verdicts and Social Inflation: A Growing Concern for Insurers

Emerging Issues

In 2023, the U.S. witnessed a surge in so-called “nuclear verdicts™,” with 27 court cases each awarding over $100 million in damages. This trend has propelled social inflation—a term describing the rising costs of insurance claims beyond economic factors—to a 20-year high of 7%. Developments like these are reshaping the landscape of liability insurance, leading to increased …

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Fourth Circuit Holds Cryptocurrency Cannot Suffer Direct Physical Loss

Cryptocurrency, Emerging Issues

The U.S. Court of Appeals for the 4th Circuit held yesterday that a crypto theft is not direct physical loss. In Sedaghatpour v. Lemonade Ins. Co., one of the relatively few recent coverage decisions addressing cryptocurrency, the court considered a theft claim of over $170,000 in cryptocurrency stored in a “hot wallet,” an internet-connected cryptocurrency …

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Property in 60 seconds: Insurers Prevail in PA Supreme Court COVID Litigation

COVID-19, Direct Physical Loss, Emerging Issues, Property in 60 Seconds

On September 26, 2024, via two decisions, Ungarean v. CNA and MacMiles v. Erie Insurance Company, the Pennsylvania Supreme Court confirmed what we, as an industry, have known since March of 2020 – economic loss alone, with an absence of direct physical loss or damage, does not constitute a covered first party property claim. The …

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Connecticut Insurance Department Addresses AI

Artificial Intelligence, Emerging Issues, Fraud

The integration of Artificial Intelligence (“AI”) systems has become a forefront of potential innovation and efficiency, for insurers and insureds alike.  Recognizing that AI systems may permeate all stages of the insurance life cycle, the Connecticut Insurance Department has issued a detailed Bulletin providing a comprehensive overview of the regulatory framework and expectations for insurers’ …

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Texas Supreme Court to Address Contractor Challenge To Public Adjuster Law

Contractors, Emerging Issues, Public Adjusters

The Texas Supreme Court is presently considering the constitutionality of the State’s public adjuster law, which prevents contractors from advertising themselves as able to assist the public with negotiating an insurance claim without first obtaining a public adjuster license.  The case is Texas Department of Insurance v. Stonewater Roofing Ltd. A public adjuster is hired …

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The Role of Artificial Intelligence in the Legal Practice

Artificial Intelligence, Emerging Issues

The legal practice is always playing catch up with the latest technology—the most recent example of this enduring game of cat-and-mouse is ChatGPT, an artificial intelligence tool that launched in November 2022. The use of ChatGPT in the legal industry recently came to a head, when two lawyers in the U.S. District Court for the …

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Ohio Supreme Court Holds Ransomware Attack Does Not Cause Direct Physical Loss

Cryptocurrency, Direct Physical Loss, Emerging Issues

This week, in EMOI Services, LLC v. Owners Insurance Company, the Ohio Supreme Court held that a ransomware attack on a medical billing company did not cause direct physical loss of or damage to software, where the company’s computer equipment remained unharmed.  The Court further explained that the computer software does not have a material …

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Can cryptocurrency suffer direct physical loss?

Cryptocurrency, Emerging Issues

Cryptocurrency, such as Bitcoin, Ethereum and Litecoin, is a digital or virtual currency.  Unlike traditional currency, cryptocurrency does not have any tangible existence, but rather exists purely as digital entries in an online database.  Given the relatively recent development of cryptocurrency, few courts have had occasion to address application of property insurance coverage principles to …

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Cryptocurrency Complications in the Property Insurance Context

Cryptocurrency, Emerging Issues

Cryptocurrency, such as Bitcoin, Ethereum and Litecoin, is a digital or virtual currency that is secured by cryptography. A distinct feature of cryptocurrency is that it is not issued by any central authority, such as a bank. Instead, internet users help maintain and manage the value of cryptocurrencies.  Cryptocurrency does not have any tangible existence, …

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