Hunton Insurance Recovery Blog

The North Carolina business court recently handed a win to policyholders in a COVID-19 business interruption lawsuit arising from the pandemic-related closure of Tanger outlet centers across the country. Tanger Props. Ltd. P’ship v. ACE Am. Ins. Co., 2025 NCBC 66 (Oct. 27, 2025). Tanger’s insurers moved to dismiss the lawsuit on the basis that the insurance policies are governed by Georgia law, not North Carolina law, where the Supreme Court has held that all-risk policies must cover loss resulting from COVID-19 interruptions. Unpersuaded by the insurers, the court denied the motion finding that Tanger established a sufficiently close connection to North Carolina law.

On November 4, 2025, the Supreme Court of Nevada denied a petition for a writ of mandamus filed by insurers seeking to challenge denial of their partial summary judgment motion on the issue of whether Covid-19 may cause “direct physical loss, damage or destruction” of property under an all-risk insurance policy that includes affirmative coverage for loss caused by infectious disease.

Third-party funding of high-stakes litigation can often make the difference between litigating the case or walking away.  The financial arrangement often makes good sense, with investors helping to facilitate the pursuit of bona fide claims that might otherwise be forgone in exchange for a piece of the recovery.  Insurance coverage disputes fit this model well, since those claims typically involve an insured who has already suffered some financial or other hardship and an insurance company with deep resources that refuses to pay the claim.  It should come as little surprise, therefore, that the Insurance Services Office (ISO), an advisory and rating organization for the property/casualty insurance industry, recently approved a new endorsement that requires disclosure of third-party litigation funding agreements. The approval comes as courts and state legislatures step up demands for transparency in funding to curtail influence that funders may have over litigation strategy.

Captive insurers are formed with careful attention to domicile to select for favorable tax, regulatory, and operational climate. But as a recent decision reminds us, jurisdictional exposure doesn’t end with the state or country of incorporation. Captive insurers, like any other entity, can find themselves subject to litigation in jurisdictions where their conduct has an effect. Understanding this reach is essential to managing risk from an insurance and corporate governance perspective.