Posts by Scott P. DeVries
Special Counsel
+1 415 975 3720
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Scott advises and represents business clients with high value insurance claims, and has recovered more than $500 million from insurers. He has a nationwide practice, has tried insurance cases across the country, and has secured...
4 Minute Read
By Scott P. DeVries, Yosef Itkin and Michael S. Levine
Courts nationwide have issued a wide range of decisions on insurance coverage for lawsuits arising out of the opioid epidemic under commercial general liability policies. On August 17, 2023, a North Carolina federal court illustrated why coverage is also available under Directors and Officers (D&O) liability insurance policies. In The North Carolina Mutual Whole Company v. Federal Insurance Company, No. 1:22-CV-553, 2023 WL 5312234 (M.D.N.C.), the court determined a drug wholesaler’s D&O policy provides coverage for more than one hundred underlying lawsuits, rejecting the insurer’s argument that two exclusions, the contract and professional services exclusions, barred coverage.
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5 Minute Read
The Heated Debate Over the California Department of Insurance’s Heat Community Policy and Parametric Underwriting
By Scott P. DeVries and Jae Lynn Huckaba
Extreme weather events—such as heat waves, wildfires, hurricanes, and tornadoes—may create major protection gaps for insureds. In California, rising temperatures and massive heat waves have led the California Department of Insurance (the “Department”) to rethink risk solutions and insurance programs that protect the state’s communities from the risks associated with extreme heat. While the Department’s proposed solution applies only to coverage for local governments, Tribes, and public health agencies, it is a “hot” topic among many Californians, as insurance professionals and policyholders debate the Department’s proposed approval of parametric insurance.
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3 Minute Read
NFT Service Brings Litigation Into the Metaverse!
By Scott P. DeVries, Michael S. Levine and Joseph T. Niczky
Blockchain technology has been touted as inherently reliable for years. More recently, collectors of Non-Fungible Tokens (NFTs) have explored expanded uses for that novel technology. Some courts have bought in and, in doing so, recently authorized a use that perhaps no one had imagined when NFTs first entered the mainstream: service of process.
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5 Minute Read
Coverage for Rotten Eggs: Livestock Coverage in the Event of a Crisis
By Jorge R. Aviles and Scott P. DeVries
The surge in prices for eggs—the fourth most-purchased US grocery item—over the past months has surprised many American shoppers. Last December, a dozen eggs cost $4.25 on average; 120% higher than at the same time in 2021. The price hike stems from many factors, including supply chain issues and inflation. But the primary culprit is the outbreak of the deadliest bird flu in US history, which has killed millions of chickens. Grocery shoppers, however, are not the only ones feeling the economic impact of the ravage to poultry flocks. Livestock owners and businesses are also feeling the economic pinch, particularly in areas hit hardest by the bird flu. Insurance is a key component of risk management for livestock businesses and owners. Here, we explore how insurance can mitigate the risks to livestock owners and businesses of accidental or unexpected events that result in the death of animals or economic losses.
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8 Minute Read
PFAS Regulation and Insurance Coverage Implications
By Syed S. Ahmad, Scott P. DeVries, Yosef Itkin, Javaneh S. Tarter and Malcolm C. Weiss
PFAS Regulation
Per- and polyfluoroalkyl Substances (“PFAS”) are a class of substances that have increasingly become the target of federal and state regulation in everything from drinking water, groundwater, site contamination, waste, air emissions, firefighting foam, personal care products, food and food packaging, and now consumer and commercial products. PFAS are widely-used chemicals that have the unique ability to repel both oil and water, which led to their application in many products including items such as stain and water-repellent fabric, chemical-and oil-resistant coatings, food packaging materials, plastics, firefighting foam, solar panels and many others. The carbon-fluorine bond is the strongest in nature, making these compounds highly persistent in the environment.
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5 Minute Read
Unanimous California Supreme Court Affirms Breadth of Policy-Interpretation Rules in Confirming That CGL Policies Cover TCPA Liabilities
By Scott P. DeVries, Lorelie S. Masters, Kevin V. Small and Alexandrea Haskell Young
In Yahoo, Inc. v. National Union Fire Insurance Co. of Pittsburgh, PA., the California Supreme Court confirmed that contra proferentem and other rules of policy interpretation apply even to language insurers argue is “manuscript” as long as the provisions in question use standard-form policy terms. There, the United States Court of Appeals for the Ninth Circuit asked the California Supreme Court to answer a certified question regarding whether a commercial general liability policy (CGL) covers defense costs related to claims under the Telephone Consumer Protection Act of 1991 (TCPA) (47 U.S.C. § 227). Following a thorough and thoughtful assessment of California law involving fundamental rules of policy interpretation, the California Supreme Court ruled in favor of the policyholder, Yahoo, Inc. (“Yahoo!”). The authors of this article represented amicus curiae, United Policyholders, in support of Yahoo! before the California Supreme Court.
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9 Minute Read
Digital Asset Insurance Coverage Series, Part 7: Insurance for NFTs
By Scott P. DeVries and Adriana A. Perez
As we have discussed in prior parts of this series, the insurance industry has developed an array of policies specifically tailored to cover cryptocurrency claims, and some of these policies may also cover certain NFT claims. Separate and apart from these tailored policies, policyholders with NFT claims also may look to traditional forms of insurance.
NFTs are collectible and one of a kind, yet digital. The most common NFT is a type of visual art image like a digital painting, a photograph or generative designs (created by artificial intelligence). However, this high-level definition doesn’t do justice to just how pervasive these have become. In addition to traditional artwork, there are:
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2 Minute Read
Digital Asset Insurance Coverage Series, Part 6: Brokers And Cryptocurrency Insurance
By Scott P. DeVries and Adriana A. Perez
Several of the largest brokers have developed a considerable bench. For example, Marsh has a Digital Asset Risk Team (DART);[1] Lockton has its Lockton Emerging Asset Protection Team (LEAP)[2] and Aon and others have their own teams.[3]
There are multiple advantages to procuring cryptocurrency insurance through brokers that have deep experience in this particular area of insurance. These may include:
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7 Minute Read
Digital Asset Insurance Coverage Series, Part 5: How Companies And Consumers With Cryptocurrency Risk Approach Insurance
By Scott P. DeVries and Adriana A. Perez
Last week’s discussion focused on the evolution of the insurance marketplace for digital assets. This section focuses on the marketplace as it now exists, providing examples of products being bought by companies and consumers facing cryptocurrency risks.
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4 Minute Read
Digital Asset Insurance Coverage Series, Part 4: History Of Insurance Coverage Specifically Designed For Cryptocurrency
By Scott P. DeVries and Adriana A. Perez
In the 18th Century, underwriting desks at what came to be known as Lloyd’s of London were developed to share or transfer risks associated with shipping.[1] Availability of risk sharing, or insurance, provided protection for maritime investors and facilitated increased levels of investment and thus increased levels of maritime activity. Risk transfer has become an essential part of the development of a marketplace for many products.
In the early years of cryptocurrency, there were no insurance products specifically designed to cover cryptocurrency-related losses. Much like the presence of insurance fosters development of a marketplace, the absence of insurance hinders it.
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5 Minute Read
Digital Asset Insurance Coverage Series, Part 3: How Traditional Insurance Products Can Help Protect Policyholders From Loss And Liability Related To Digital Assets
By Scott P. DeVries and Adriana A. Perez
In the early years of cryptocurrency, there were no crypto-specific insurance coverages. Instead, policyholders sustaining losses were left to try to access coverage under traditional insurance policies such as:
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4 Minute Read
Digital Asset Insurance Coverage Series, Part 2: Who Can Incur Losses Associated With Digital Assets And What Are The Potential Risks Of Loss And Liability Related To Digital Assets?
By Scott P. DeVries and Adriana A. Perez
Who can incur losses associated with cryptocurrency or digital assets? The real question is who uses them.
Among the most obvious users would be exchanges in which cryptocurrency is traded. It has been reported that the largest insurance market in the cryptocurrency industry consists of exchanges that insure against thefts from cryptocurrency hackers. Among the more prominent exchanges are Coinbase, Crypto.com and Gemini. Similarly obvious are the third-party custodians that store cryptocurrency and other forms of digital assets on consumers behalf such as BNY Mellon Crypto Currency or Fidelity Digital Assets. They provide safekeeping of digital assets including keys and ensure accessibility.
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7 Minute Read
Hunton Insurance Group Advises Policyholders on Issues That Arise With Insurance Coverage for Digital Assets, Specifically Cryptocurrency and NFTs — A Seven-Part Series
By Scott P. DeVries and Adriana A. Perez
Crypto markets are experiencing the greatest crash in their history to date. The value of a Bitcoin (BTC) has plummeted 70% from its peak and Ethereum (ETH) has fallen 77%.Since last November, the value of cryptocurrency tokens has lost $2 billion in value.[1] As noted financial publication Barron’s put it: “Crypto is having a ‘Lehman moment,’ a shattering of confidence triggered by plunging asset prices, liquidity freezing up, and billions of dollars wiped out in a few scary weeks.”[2]Cryptocurrency companies are halting withdrawals and transfers, platforms are seizing up, and regulators are circling.[3]
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4 Minute Read
NY Federal Court Rules Insurer Must Cover Policyholder’s Landlords Under Lease Agreement’s Indemnity Provision
By Scott P. DeVries
Last week, a New York federal court ruled that an insurer’s “exceedingly broad duty to defend the insured” extended to the policyholder’s indemnification of its landlords in an underlying tort claim. ConMed Corporation (“ConMed”), a medical technology company, filed suit against Federal Insurance Company (“Federal”), a division of Chubb, alleging that Federal breached the terms of its insurance contract when it refused to defend ConMed’s landlords in a Georgia lawsuit.
The coverage dispute stemmed from ConMed employees’ claims that they were exposed to unsafe levels of ethylene oxide, a chemical used to sterilize ConMed’s equipment. Initially, the employees sued ConMed and its contractor that conducted the sterilization, but in April of 2021 the employees initiated a separate suit against ConMed’s landlords (“Landlord Action”). In the Landlord Action, plaintiff employees alleged negligence, aiding and abetting tortious conduct, fraud, wrongful death, and vicarious liability/respondeat superior claims, all stemming from their exposure to ethylene oxide. Pursuant to the lease agreement with ConMed, the landlords tendered the defense and indemnity of the Landlord Action to ConMed, which subsequently tendered the defense to Federal. Federal failed to accept defense of the Landlord Action, and ConMed filed suit.
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7 Minute Read
Wildfire Insurance Coverage Series, Part 7: How to Successfully Prepare, Submit and Negotiate the Claim
By Scott P. DeVries and Yosef Itkin
Prior posts in this series have discussed insurance coverage issues that pertain directly to wildfire claims, but we have not yet addressed how one proceeds following a loss. In this post in the Blog’s Wildfire Insurance Coverage Series, we discuss the preparation, submission and negotiation of the insurance claim.
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3 Minute Read
Wildfire Insurance Coverage Series, Part 6: Ensuring Availability of Insurance and State Regulations
By Scott P. DeVries and Yosef Itkin
Because of the potential exposure associated with wildfires, many insurers have attempted to withdraw from the property coverage market in various states. In this post in the Blog’s Wildfire Insurance Coverage Series, we discuss the challenges businesses and individuals face in obtaining wildfire insurance coverage, and the regulatory scheme that is intended to help them secure adequate coverage.
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5 Minute Read
Wildfire Insurance Coverage Series, Part 5: Valuation of Loss, Sublimits, and Amount of Potential Recovery
By Scott P. DeVries and Yosef Itkin
Insurance policies provide different levels of insurance coverage and even if the amount purchased was adequate at one time, developments over time (e.g., inflation, upgrades, regulatory changes and surge pricing) may leave the policyholder underinsured. In this post in the Blog’s Wildfire Insurance Coverage Series, we emphasize the need for policyholders to take a close look at the policy’s terms to select the right type and amount of coverage for a potential loss.
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3 Minute Read
Wildfire Insurance Coverage Series, Part 4: Coverage for Supply Chain Related Losses
By Scott P. DeVries and Yosef Itkin
Business loss is not limited to fire or smoke damage to its own property – it often arises from damage to the supply chain. In this post in the Blog’s Wildfire Insurance Coverage Series, we look at what coverage may exist when wildfire damages an entity’s supply chain.
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4 Minute Read
Wildfire Insurance Coverage Series, Part 3: Standard Form Policy Exclusions
By Scott P. DeVries and Yosef Itkin
Even when claims are within the scope of coverage, insurers often rely on exclusions in an attempt to avoid coverage for wildfire claims. In this post in the Blog’s Wildfire Insurance Coverage Series, we discuss the interplay between coverage grants and exclusions, and the “anti-concurrent cause” provision.
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3 Minute Read
Wildfire Insurance Coverage Series, Part 2: Coverage for Smoke-Related Damages
By Scott P. DeVries and Yosef Itkin
For many policyholders, smoke emanating from wildfire causes as much if not more damage than the fire itself. In this post in the Blog’s Wildfire Insurance Coverage Series, we discuss damages caused by smoke emanating from wildfires.
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4 Minute Read
Hunton Insurance Group Advises Policyholders on Issues That Arise With Wildfire Claims and Coverage – A Seven-Part Wildfire Insurance Coverage Series
By Scott P. DeVries and Yosef Itkin
Wildfires destroy millions of acres a year in the United States, spewing smoke across much of the nation. The cost of damage alone over the past several years soars into the hundreds of billions. As wildfires continue to spread, particularly as we enter wildfire season, policyholders’ claims will rise and with that, so too will wildfire insurance coverage issues. Many believe that when a fire damages their property and/or interrupts their business operations, a claim gets submitted and is automatically paid; sadly, this is often not the case.
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4 Minute Read
A Win for Policyholders Who Are Victims of Fraudulent Bank Transfer Schemes
By Scott P. DeVries and Yosef Itkin
Recently, the Ninth Circuit dealt with a case involving a scenario that is becoming all too common. In Ernst & Haas Mgmt. Co., Inc. v. Hiscox, Inc., 23 F.4th 1195 (9th Cir. 2022), a property management company’s accounts payable clerk received several e-mails from her supervisor instructing her to pay some invoices. Unbeknownst to the clerk, these e-mails did not originate with her supervisor, but were actually part of a fraudulent scheme to elicit fraudulent bank transfers. The clerk paid off hundreds of thousands of dollars in “invoices” before becoming suspicious but, by then, it was too late and the damage was done.
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4 Minute Read
Ninth Circuit Decisions Reject Coverage for COVID Orders, Leaving Door Open for Cases Presenting Damage Claims
By Scott P. DeVries and Yosef Itkin
Court dockets, both in the state and federal court systems, have seen a massive influx of COVID-19 business interruption insurance cases since the pandemic began in March of 2020. More recently, cases have been moving more expeditiously through the federal courts, and the circuit courts are starting to issue decisions. Most recently, the Ninth Circuit has spoken and its decisions provide important guidance for policyholders with pending COVID-19 coverage cases in California federal courts.
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2 Minute Read
MDL Panel Denies Consolidation for COVID-19 Insurance Cases for All Insurers (with One Exception)
By Scott P. DeVries and Rachel E. Hudgins
As we reported in a prior blog, on August 14, the Judicial Panel on Multidistrict Litigation rejected plaintiffs’ request for a consolidation of all COVID-19 insurance coverage federal litigation, agreeing to consider mini-MDLs as respects five specific insurers, which accounted for roughly one-third of the federal cases. On October 2, the Panel rejected the concept of mini-MDLs as respects four of these five insurers and accepted an MDL for the fifth insurer.
At the outset, the Panel agreed with plaintiffs that each of the proposed mini-MDLs presented common legal and factual...
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9 Minute Read
English High Court Finds That Business-Interruption Insurance Can Cover COVID-19 Losses
By Jorge R. Aviles, Scott P. DeVries, Lorelie S. Masters and Patrick M. McDermott
In a decision that will influence how policyholders and insurers around the world address business-interruption coverage for COVID-19 losses, the English High Court recently handed down its much-anticipated judgment in the “Test Case,” The Financial Conduct Authority (FCA) v. Arch et al. The High Court’s comprehensive analysis will likely serve as an additional tool in policyholders’ arsenal in the ongoing battles over COVID-19 coverage.
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3 Minute Read
MDL Panel Considers Mini-MDLs For COVID-19 Insurance Cases
By Scott P. DeVries, Michael S. Levine and Patrick M. McDermott
Earlier this year, lawyers for plaintiffs applied to the MDL Panel for consolidation of all COVID-19 business interruption cases in federal courts throughout the country. On August 12, the Panel rejected plaintiffs’ requests for a single consolidation but requested briefing on the possibility of mini-MDLS as respects five of the insurers that accounted for approximately one third of these cases: Lloyds (26 actions), Cincinnati (70 actions), Hartford (130 actions), Society Insurance (24 actions) and Travelers (45 actions). On Thursday, September 24, the Panel held a nearly three-hour hearing.
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4 Minute Read
Policyholders and Insurers Await Highly Anticipated English High Court Ruling Regarding Coverage for COVID-19 Business-Interruption Losses
By Jorge R. Aviles, Scott P. DeVries, Lorelie S. Masters and Patrick M. McDermott
On Tuesday, the English High Court will issue its much-anticipated ruling in “test cases” for coverage of business-interruption losses during the COVID-19 pandemic under sample policy wordings. Irrespective of the outcome, the London court’s ruling promises to be a significant development for the insurance markets in the UK, as billions of pounds in potential insurance claims are at stake and––beyond this––policyholders and/or insurance companies can be expected to argue that one or another of the findings supports their position(s) for interpreting similar policy language in future COVID-19 business-interruption coverage cases.
The FCA Test Case
In the first action of its kind since the agency was established in 2013, the British markets regulator, the Financial Conduct Authority (FCA), engineered the test case process earlier this year to seek legal clarity over insurance companies’ obligations to cover business-interruption claims in the context of the ongoing COVID-19 pandemic. Brought before the English High Court (a trial level court in the UK), the FCA test case involves around 370,000 policyholders and eight insurance companies. The case was heard by Judge Christopher Butcher, who sits in the Commercial Court, and Judge Julian Flaux from the Court of Appeal. Experienced English counsel prepared and presented arguments to the tribunal for expedited consideration and resolution. The FCA hired a solicitor firm, which instructed well-regarded barristers from Devereux Chambers and Fountain Court Chambers; the insurers engaged their own solicitors and barristers.
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8 Minute Read
Despite Misapplying California Law, Federal Court Acknowledges Virus May Cause Physical Alteration to Property
By Scott P. DeVries and Michael S. Levine
On August 28, Judge Stephen V. Wilson of the Central District of California, entered the latest ruling in the ongoing saga of the COVID-19 business interruption coverage dispute between celebrity plaintiff’s attorney Mark Geragos and Insurer Travelers.
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5 Minute Read
Ninth Circuit Narrowly Construes IP Exclusion, Reaffirming Rules of Insurance Policy Construction
By Scott P. DeVries
The My Choice Decision
On August 19, 2020, the Ninth Circuit issued its decision in My Choice Software, LLC v. Travelers Casualty Insurance Co. of America, No. 19-56030, 2020 WL 4814235, holding that longstanding rules of insurance policy construction required reversal of a district court holding denying a duty to defend. Specifically, the Court determined that the Intellectual Property Exclusion in a Travelers policy did not unambiguously preclude the possibility of coverage for a claim against the Insured, My Choice, and that Travelers accordingly had a duty to defend.
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2 Minute Read
MDL Panel Denies Nationwide Consolidation of COVID-19 Business Interruption Coverage Cases
By Scott P. DeVries and Matthew J. Revis
We previously reported on the July 30 argument before the MDL Panel regarding plaintiffs’ motion to consolidate more than 275 COVID-19 Business Interruption cases.
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3 Minute Read
MDL Panel Considers Consolidation of COVID-19 Business Interruption Claims
By Scott P. DeVries and Matthew J. Revis
On July 30, the Judicial Panel on Multidistrict Litigation held a Zoom hearing on a motion filed by plaintiffs’ lawyers to consolidate hundreds of business interruption claims filed across the country. The Panel permitted a number of plaintiffs’ counsel and two insurers’ counsel to each argue for 3 uninterrupted minutes and then respond to questions.
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4 Minute Read
It’s a COVID-19 Pandemic; It’s Everywhere – New Cal. Bill to Make Insurers Prove Otherwise
By Andrea DeField and Scott P. DeVries
On June 29, in a development that may fundamentally change the landscape for California businesses which have sustained COVID-19 related business interruption loss, two California legislators amended pending legislation to address several of the most hotly contested issues regarding insurance recovery for these devastating losses.
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3 Minute Read
California Appellate Court Holds “Minimal Causal Connection” Satisfies Causation Requirement in All Risk Policies
By Scott P. DeVries and Michael S. Levine
On May 26, 2020, a California Court of Appeals (4th District) issued its decision in Mosley et al. v. Pacific Specialty Ins. Co. The case arose in the context of a marijuana-growing tenant who rerouted a home’s electrical system and caused an electrical fire. The issue was whether the homeowner’s policy covered the loss. The trial court granted the insurer’s motion for summary judgment and, in a divided decision, the Court of Appeals reversed in part.
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