Hunton Insurance Recovery Blog

Hunton receives many inquiries about litigation risk insurance. Hunton partner Latosha M. Ellis and associate Charlotte Leszinske provide insight on this topic in an article recently published in the Real Estate Finance Journal. The article explains how litigation risk insurance often works in tandem with traditional insurance, providing extra protection against uncertain legal outcomes. It describes the ins and outs of several types of litigation risk insurance products—judgment preservation insurance, adverse judgment insurance, and punitive wrap insurance—and how each of these products can target specific risks related to ongoing litigation. The authors also explain how these insurance products can be used to further other strategic goals, such as freeing up cash flow, obtaining settlement in pending cases, and reaching agreement on terms in a prospective merger or acquisition.

The article is available for review at the following link: Reducing Legal Exposure in Real Estate: Leveraging Litigation Risk Insurance

A recent decision by the Eastern District of Virginia illustrates the tricky problem of relatedness in claims-made liability insurance policies. When a claim is made that relates to an earlier claim, the second claim is covered under the same insurance policy as the original claim, even if that policy has expired. However, determining when two claims are related is not always straightforward and involves a highly fact-specific analysis. As shown in Navigators Specialty Insurance Company v. Avertest, LLC, sometimes even identical allegations, describing the same allegedly negligent business practice, may not be enough to make claims related. Instead, under typical policy language, what matters is whether the claims arise from the same or related occurrences.