Banking Agencies Begin Publishing Updated Crypto Guidance
On March 28, the Federal Deposit Insurance Corporation (FDIC) rescinded Biden administration guidance1 related to state-chartered banks’ participation in “crypto-related activities” and published a new interpretation of the scope of permissible crypto activity for the insured depository institutions for which it is the primary regulator (the Crypto Letter).2 As discussed below, while similar to guidance issued by the Office of the Comptroller of the Currency (OCC) on March 7 with respect to national banks and federal savings banks,3 the Crypto Letter reflects a seismic shift in the scope of enumerated crypto-related activities permitted to state-chartered banks across the United States, assuming that such activities are performed in a manner that is otherwise consistent with bank regulation.
The Crypto Letter
Notably, the Crypto Letter defines “crypto-related activities” to include “acting as crypto-asset custodians; maintaining stablecoin reserves; issuing crypto and other digital assets; acting as market makers or exchange or redemption agents; participating in blockchain- and distributed ledger-based settlement or payment systems, including performing node functions; as well as related activities such as finder activities and lending.” Some of these powers are consistent with what the banking industry believed likely to be newly permitted by the Trump administration, such as acting as a cryptoasset custodian.
Custodial powers have long been permitted to insured depository institutions that satisfy certain statutory and procedural requirements. Other powers enumerated in the definition, however, such as issuing crypto and other digital assets, represent a breadth of authority that had not been widely anticipated in the banking industry given that such activities provide the potential for FDIC-supervised institutions to publicly offer payment mechanisms that could, potentially, compete with the US dollar. For example, if Bank of X issues a hypothetical “X coin” that can be used at merchants much like a credit or debit card (whether in an open-loop or closed-loop environment), such coin will function as a medium of exchange that could either be fully backed by US dollars (i.e., a payment stablecoin), or potentially backed by other assets, introducing a new form of privately issued currency into the payment ecosystem.
It is worth noting that Congress is currently considering several bills on payment stablecoins. These bills would create regulatory pathways for banks to issue payment stablecoins under appropriate regulatory oversight.
However, the Crypto Letter further provides that traditional concepts underpinning bank supervision continue to apply to a bank that pursues participation in a crypto-related activity: namely, such activities must be performed in a manner that is consistent with safety and soundness principles as well as applicable laws and regulations. While the Crypto Letter is clear that prior approval from the FDIC is not required to engage in a crypto-related activity, before undertaking such activities, the insured depository institution must consider the existing risk rubric that governs all bank activities, including, but not limited to, “market and liquidity risk; operational and cybersecurity risks; consumer protection requirements; and anti-money laundering requirements.”
Finally, the Crypto Letter notes that new interagency guidance related to crypto activities by insured depository institutions will be forthcoming from the federal banking regulators with respect to prior guidance issued by the Biden administration. This is consistent with action taken by the OCC in its publication of the OCC Crypto Letter that rescinded prior OCC guidance with respect to crypto activity and affirmed that national banks and federal savings banks may engage in cryptoasset custody, distributed ledger and stablecoin activities.
What This Means
While the Crypto Letter reflects a policy to permit broad participation in the crypto market by FDIC-supervised banks, there is no expectation that such banks will immediately enter the market with crypto-related products and services. Rather, policies, procedures and testing methodologies must be created to reflect safe and sound banking principles. Clearly, certain activities that “mirror” products currently offered by insured depository institutions, such as the custodying of crypto assets, will be the first activities retail and commercial customers are likely to see, given that the pivot to offering this type of additional fiduciary activity will not present significant operational and procedural hurdles assuming an institution currently offers such services. Lending against the value of a customer’s crypto likely falls within the same analytical framework: banks have long loaned against the value of assets, including assets whose values fluctuate in the market.
Other enumerated activities, however, will require a longer “lead time” before they are brought to the market. In particular, building a blockchain-based payment system will require significant investment and effort given the multiple layers between consumer/customer, merchant, and payment system. For example, in order for a consumer to use crypto held at Bank X to buy coffee in the morning from the merchant in the office lobby, Bank X must build the technical infrastructure to connect its banking systems with blockchain networks. This infrastructure will need to allow the consumer to initiate payments, enable the bank to verify balances and process transfers and ensure that such crypto can be moved from the customer’s account held at Bank X to the merchant’s account held at Bank Y.
1 The Biden administration guidance requiring prior FDIC notification before engaging in crypto-related activities was set forth at FDIC FIL-16-2022.
2 FDIC Clarifies Process for Banks to Engage in Crypto-Related Activities, March 28, 2025, available at https://www.fdic.gov/news/financial-institution-letters/2025/fdic-clarifies-process-banks-engage-crypto-related?source=govdelivery&utm_medium=email&utm_source=govdelivery
3 OCC Letter Addressing Certain Crypto-Asset Activities, March 7, 2025, available at https://www.occ.treas.gov/topics/charters-and-licensing/interpretations-and-actions/2025/int1183.pdf (the “OCC Crypto Letter”).
Thompson v. United States (No. 23-1095)
William Blake once observed that “a truth that’s told with bad intent, beats all the lies you can invent.” It turns out the Supreme Court agrees, at least for escaping liability under 18 U.S.C. § 1014. In Thompson v. United States (No. 23-1095), a unanimous court held that this statute criminalizes only false statements and not statements that are misleading but literally true.
Patrick Thompson took out three loans from the Washington Federal Bank for Savings at various times. He first borrowed $110,000 in 2011. Then in 2013, he borrowed an additional $20,000. The year after that, he borrowed $89,000 more. These three loans resulted in a total loan balance of $219,000. In 2017, however, the Washington Federal Bank for Savings failed, and the FDIC assumed responsibility for collecting the bank’s outstanding loans. As part of the FDIC’s collection attempts, Planet Home Lending, the FDIC’s loan servicer, sent Thompson an invoice for $269,120.58, reflecting his principal amount plus unpaid interest.
After receiving the invoice, Thompson called Planet Home Lending and professed confusion as to where the $269,120.58 figure came from. On the call (which, unfortunately for our supposedly befuddled borrower, was recorded) Thompson said “I borrowed the money, I owe the money—but I borrowed…I think it was $110,000.” Thompson later received a call from two FDIC contractors, whose notes of the call reflect that Thompson mentioned borrowing $110,000 for home improvement. He later settled his debt with the FDIC for $219,000—an amount that coincidentally reflected the exact principal amount of the loans he had taken out but apparently could not recall.
Any elation he felt over his $50,000 in interest savings was likely cut short, however, when he was indicted on two counts of violating 18 U.S.C. § 1014. That statute prohibits “knowingly mak[ing] any false statement or report . . . for the purpose of influencing in any way the action of . . . the Federal Deposit Insurance Corporation . . . upon any . . . loan.” One count related to his call to Planet Home Lending, and the second to his call with the FDIC contractors. Apparently secure in his belief in his own veracity, Thompson proceeded to trial. But the jury reached a different conclusion regarding his trustworthiness and convicted him of both counts.
He moved for acquittal or a new trial, arguing that a “conviction for false statements cannot be sustained where, as here, the alleged statements are literally true, even if misleading.” Thompson argued that his statements about borrowing $110,000 were literally true because he had in fact borrowed that amount of money from the Bank, even though he later borrowed more. Cf. Mitch Hedberg (“I used to do drugs. I still do, but I used to too.”). The district court denied the motion, finding that “literal falsity” was not required to violate section 1014 under Seventh Circuit precedent. The Seventh Circuit affirmed, holding that “misleading representations” were criminalized by that statute.
In a unanimous opinion by Chief Justice Roberts, the Supreme Court reversed and remanded. In their view, this was a simple case. The plain text of the statute criminalizes “knowingly mak[ing] any false statement or report.” But “false and misleading are two different things” because a “misleading statement can be true.” And because “a true statement is obviously not false,” misleading-but-true statements are outside the scope of the statute.
Much in the case ultimately turned on whether the natural reading of “false” includes a true but misleading statement. As one of many colorful examples of how even true statements can be misleading, Roberts discussed a hypothetical, which the Government conceded at oral argument, that “[i]f a doctor tells a patient, ‘I’ve done a hundred of these surgeries,’ when 99 of those patients died, the statement—even if true—would be misleading because it might lead people to think those surgeries were successful.” (The statement would be equally true—and equally misleading—if all 100 patients had died, but perhaps the Court thought that even its hapless hypothetical surgeon was unlikely to have botched all his operations). With that recognition in mind, Roberts quickly rejected the Government’s argument made with “dictionary in [one] hand” and “thesaurus in the other hand” that false can also simply mean “deceitful” and that “false and misleading have long been considered synonyms.” Unimpressed with the stack of books the Government brought to bear, the Court observed that this argument merely “point[ed] out the substantial overlap between the two terms.”
Finally, the Chief turned to context and precedent. Starting with the former, Roberts noted that many other criminal statutes do criminalize both false and misleading statements, including “[m]any other statutes enacted in the same period” as section 1014 (like such stalwarts of the federal code as the Perishable Agricultural Commodities Act). This gave rise to the presumption that Congress’s omission of the term “misleading” from section 1014 was deliberate. And as to precedent, Roberts found support in Williams v. United States (1982), where the Court stated that “a conviction under §1014 requires at least two things: (1) the defendant made a statement, and (2) that statement can be characterized as ‘false’ and not ‘true.’”
Justices Alito and Jackson each filed a brief concurrence. Justice Alito emphasized that “context” is key when assessing whether a misleading statement crosses the line into being false. Justice Jackson wrote separately to note that the jury instructions in Thompson’s case had actually been correct, referencing only false statements while making no mention of misleading statements. In her view, then, there was “little for the Seventh Circuit to do on remand but affirm the District Court’s judgment upholding the jury’s guilty verdict.”
Reproductive Health Under Trump: What’s New and What’s Next
Overview
Over the past two months, the second Trump administration has shifted federal policies and priorities regarding abortion, in vitro fertilization (IVF), contraception, and other reproductive-health-related matters – and it is expected to continue to do so. In addition to the federal policy agenda, many developments related to reproductive health likely will continue to occur at the state level. The Dobbs decision shifted policymaking in these areas toward the states, and lawmakers and advocates have expressed their intentions to either adhere to or protect against the new administration’s policies and agenda items. This article discusses some of the major recent trends in women’s health and reproductive health, and what is likely to come next under the new administration.
In Depth
THE TRUMP ADMINISTRATION WILL CONTINUE TO WEAKEN BIDEN-ERA POLICIES THAT PROTECT REPRODUCTIVE HEALTH
The Hyde Amendment
During its first month, the second Trump administration signed several executive orders (EOs) and otherwise signaled its approach to certain reproductive health measures that were previously in place. For instance, in the first week of his presidency, US President Donald Trump signed an EO entitled “Enforcing the Hyde Amendment,” which called for an end to federal funding for elective abortions and revoked two previous EOs that permitted such funding. The EO charged the Office of Management and Budget with providing guidance around implementing the mandate. While the EO was not a surprise, it referred to the Hyde Amendment and “similar laws,” leaving some ambiguity in its scope and the way in which it will be implemented in practice (e.g., it could be used to target federal funds for abortion and perhaps related services by other federal agencies, such as the US Departments of Defense, Justice, and State). In response to this EO, federal agencies could revoke Biden-era policies and reinstate or expand upon Trump administrative policies. Such efforts may include recission of Biden-era regulations that authorized travel for reproductive-health-related needs for servicemembers and their families and permitted abortion services through the US Department of Veterans Affairs.
The Comstock Act
Although we have not seen activity in this respect to date, the new administration will likely rescind the Comstock Act Memo, which was published by the US Department of Justice (DOJ) Office of Legal Counsel. This memo was issued in December 2022 by the Biden administration following the Dobbs decision. The Comstock Act is a federal criminal statute enacted in 1873 that prohibits interstate mailing of obscene writings and any “article or thing designed, adapted, or intended for producing abortion.” Violations of the Comstock Act are subject to fines or imprisonment. The Comstock Act Memo sets forth the opinion of the DOJ Office of Legal Counsel that the Comstock Act does not prohibit mailing abortion-inducing medication unless the sender explicitly intends for it to be used unlawfully. If the new administration revokes this memo or attempts to apply the Comstock Act to the mailing of abortion-inducing medication (and, perhaps, any abortion-inducing implements, which could have even wider-reaching implications) regardless of intent, it could become very difficult for patients to obtain abortion-inducing medication. Such actions also could lead to complications related to the provision of such medications via the mail (and potentially in person, depending on the attempted interpretation). At the time of publication, the DOJ website still included the Comstock Act Memo, noting that 18 U.S.C. § 1461 does not prohibit the mailing of abortion-inducing medication when the sender does not intend for the recipient to use the drugs unlawfully.
The 2024 HIPAA Final Rule on Access to Reproductive Health Records and Related State Activity
In 2024, the US Department of Health and Human Services Office for Civil Rights (OCR) published a Health Insurance Portability and Accountability Act (HIPAA) final rule to support reproductive healthcare privacy (2024 final rule). The 2024 final rule prohibits a covered entity or business associate from disclosing protected health information (PHI) for conducting an investigation into or imposing liability on any person for seeking, obtaining, providing, or facilitating reproductive healthcare where the reproductive healthcare is lawful. The 2024 final rule also prohibits disclosure of PHI to identify any person for the purpose of conducting an investigation or imposing liability. The enforcement mechanism of the 2024 final rule includes an attestation component under which a requesting party must certify that the use of the PHI is not prohibited when requested for health oversight activities, judicial or administrative proceedings, law enforcement purposes, or disclosures to coroners and medical examiners under 42 C.F.R. § 164.512. The Trump administration likely will not enforce (and may reverse) protections around reproductive health data under the 2024 final rule, which would leave a bigger gap for the states to potentially fill, as evidenced by the EO regarding enforcement of the Hyde Amendment and rollback of other Biden-era reproductive health protections.
In response to increased scrutiny of reproductive healthcare, several states have enacted laws protecting healthcare providers, patients, and others involved in providing or receiving reproductive healthcare. Although these laws vary from state to state, they generally prohibit disclosure of data and other information related to reproductive healthcare that was lawfully obtained by a patient and provided by a healthcare provider. These laws can provide a certain level of comfort to providers that provide care to patients who travel across state lines to receive care that may be unavailable to them in their home state but is accessible and lawfully provided in another state. States that do not have such laws may seek to enact similar protections under the new administration as federal protections become less certain, particularly if the layer of protection afforded by the 2024 final rule is revoked or otherwise diminished.
ABORTION POLICY WILL CONTINUE TO BE LARGELY DICTATED BY STATES AND MAY EXPAND INTO NEW AREAS OF FOCUS
Following the Dobbs decision, many states quickly took action to enshrine abortion protections in their laws and constitutions. Some states, such as Michigan, moved to overturn old, unenforced abortion bans on their books. Michigan further implemented laws, executive actions, and eventually a ballot measure to amend its state constitution. This trend has continued; in the November 2024 presidential election, seven states passed ballot measures to protect abortion access. However, the 2024 election also marked the first three abortion protection ballot referendums that failed to pass. Voters in South Dakota and Nebraska rejected proposed constitutional amendments, and a measure in Florida received only 57% of the vote where a 60% majority was required.
In the years since Dobbs, new laws and court cases have largely sorted the states into two categories: states that are more protective and states that are more restrictive regarding abortion. However, the law remains unsettled in a few states, such as Georgia and Wisconsin, where pending court cases, legislative action, and gubernatorial executive action may result in different outcomes. In the 2024 election, Missouri voters passed a ballot initiative to overturn the state’s strict ban on abortion and enshrine reproductive rights in the state constitution, effectively switching the state from more restrictive to more protective. More constitutional ballot measures could come in states such as Pennsylvania, New Mexico, Virginia, and New Hampshire, where abortion rights are currently supported under state law but not enshrined in state constitutions. Abortion advocates may also focus on Iowa, South Carolina, and Florida, where recent court decisions have largely settled the law, but further litigation is possible. Restrictive states also continue to legislate additional restrictions on access to abortion.
The majority of states can be expected to continue on their current trajectory: more protective states may continue to enact abortion protections, and more restrictive states may continue to enforce existing bans and expand prohibitions. In 2025, the focus of both protective and restrictive laws likely will continue to expand. The initial wave of post-Dobbs policymaking primarily focused on a healthcare provider’s ability to perform an abortion and a patient’s right to receive an abortion. New laws and proposals now focus on topics such as assisting others in obtaining an abortion, telehealth prescribing of abortion medications, abortion funding, abortion rights of minors, and patient data privacy.
Trump administration policies and initiatives may impact more protective states’ abilities to provide abortion services. For instance, if the Comstock Act Memo is revoked, abortion-inducing medication may become scarce or difficult to obtain through the mail, even from a provider in a protective state to a patient in another protective state. If interpreted even more broadly by the administration, the Comstock Act could serve as a catalyst for a national abortion ban, which would almost certainly face legal challenges. While the Trump administration has not yet asked Congress for a national abortion ban, the EO that Trump signed recognizing two sexes includes personhood language regarding life beginning “at conception,” signaling that additional changes may be proposed at both the federal and state policy levels regarding fetal personhood and attendant rights. Such changes would likely result in legal challenges in federal and state courts.
IVF SERVICES WILL CONTINUE TO EXPAND BUT MAY FACE FRICTION WITH ABORTION PROHIBITIONS AND CERTAIN TRUMP ADMINISTRATION PRIORITIES
State abortion laws have somewhat solidified following Dobbs, but many laws remain unclear as to their impact on IVF providers. Many states have abortion prohibitions that predate IVF, some of which define “unborn child” from the moment of fertilization or conception. Other laws are ambiguous but contain language that arguably protects a fetus at any stage of development. Since Dobbs, state attorneys general in Arkansas, Oklahoma, Wisconsin, and other states have indicated that they will not pursue IVF providers using state abortion bans, and the Trump administration has issued an EO calling for expanded access to IVF. However, the state-level laws remain ambiguous, and there is a risk that courts may interpret such laws to apply to embryos or otherwise impact IVF access. Moreover, the EO raising the issue of fetal personhood may create friction for efforts to expand access to IVF.
In February 2024, the Alabama Supreme Court became the first state supreme court to definitively rule that “unborn children” includes cryogenically frozen IVF embryos. The court held an IVF clinic liable under the state’s wrongful death statute after an incident in which frozen IVF embryos were destroyed. The decision initially caused several IVF providers in the state to pause services until two weeks later, when the legislature passed a specific exception to the statute for IVF providers. Even though the status quo was quickly restored, both providers and patients were significantly impacted by the period of uncertainty. In 2025 and beyond, other states could face similar test cases. In response to public support for reproductive technology, some restrictive states have proposed legislation to address, for example, the use of assistive reproductive technology and selective reduction.
At the same time, insurance coverage for IVF and other fertility treatments has expanded and will likely continue to do so in 2025. Approximately 22 states now mandate that insurance plans provide some combination of fertility benefits, fertility preservation, and coverage for a number of IVF cycles. After July 1, 2025, all large employers in California must provide insurance coverage for fertility treatments, including coverage for unlimited embryo transfers and up to three retrievals. 2025 will also bring expanded IVF coverage options for federal employee insurance plans.
THE RIGHT TO CONTRACEPTION WILL REMAIN VULNERABLE TO STATE LAWMAKING AND COURT CHALLENGES
Although the Dobbs majority opinion states that the “decision concerns the constitutional right to abortion and no other right,” and that “nothing in [the Dobbs] opinion should be understood to cast doubt on precedents that do not concern abortion,” doubt remains as to other women’s health rights. In his concurrence in Dobbs, Justice Clarence Thomas expressed interest in revisiting prior Supreme Court of the United States decisions upholding rights other than the right to abortion, such as the right to contraception upheld in Griswold v. Connecticut.
In response to the Thomas concurrence, the federal Right to Contraception Act was introduced. The act would have enshrined a person’s statutory right to contraception and a healthcare provider’s right to provide contraception. The act passed the US House of Representatives, but the US Senate version was unable to overcome a filibuster in June 2024. Federal efforts to protect the right to contraception are unlikely to pass in the new Congress.
Although federal action is unlikely, certain states have already protected the right to contraception under state law. Approximately 15 states and the District of Columbia currently have some form of protection for the right to contraception either by statute or under the respective state’s constitution. Under the new administration, state legislative action likely will increase with respect to the right to access contraception. Certain states with restrictive abortion policies, such as South Carolina, have proposed modifications to their abortion restrictions to explicitly protect the use of contraceptives.
WHAT STEPS SHOULD STAKEHOLDER CONSIDER TAKING?
Any company whose services touch on reproductive health or women’s health should engage in a risk assessment of their business and the ways in which the Trump administration may affect their ability to operate without complications. Although the first two months of EOs and other actions from the administration have not drastically altered the landscape for reproductive health across the country, access to reproductive and women’s health is likely to evolve over the next four years. We are closely monitoring these developments and will continue to forecast the ways in which this could impact stakeholders in the industry.
United States Court of Appeals Enforces Arbitration Agreement Against Third-Party Non-Signatories
Arbitration agreements often seem straightforward—until they unexpectedly bind parties who never signed them. The United States Court of Appeals for the Eleventh Circuit’s recent decision in Various Insurers v. General Electric International, Inc., ___ F.4th ___ (11th Cir. 2025), underscores the reach of arbitration clauses and the courts’ willingness to enforce them against third parties. This case highlights how third-party beneficiaries—and their insurers—can be required to arbitrate disputes, even though they were not signatories to the contract. The ruling is a good reminder for businesses, insurers, and legal practitioners to carefully consider the third-party implications of arbitration clauses when drafting, reviewing, and enforcing international commercial agreements.
Background: Arbitration Battle Following a Catastrophic Failure
The dispute arose from a catastrophic turbine failure at an Algerian power plant owned by Shariket Kahraba Hadjret En Nouss (SKH). SNC-Lavalin Constructeurs International Inc. (SNC) operated the plant on SKH’s behalf pursuant to an Operations and Management Agreement. In turn, SNC had entered a Services Contract with General Electric International (GE) to supply parts and services for the power plant. The Services Contract between SNC and GE International contained an arbitration clause.
Following the turbine failure, various insurers and reinsurers, acting as subrogees of SKH, sued GE International and other General Electric companies in the U.S. State of Georgia’s state-wide business court. GE International and the other General Electric companies removed the case to federal court and then sought to compel arbitration, arguing that SKH was a third-party beneficiary of the Services Contract and, as such, its insurers and reinsurers were also bound by the arbitration clause.
The Eleventh Circuit’s Analysis: Why the Insurers Were Bound to Arbitrate
The central issue was whether SKH, as the power plant’s owner, was a third-party beneficiary of the Services Contract between SNC and GE International. If so, SKH’s subrogated insurers and reinsurers would also be required to arbitrate.
The court applied federal common law to determine SKH’s third-party beneficiary status, to hold that SNC and GE International intended “to grant SKH the benefit of the performance promised” under the Services Contract, and therefore that SKH was indeed a third-party beneficiary.
The key facts about the Services Contract that led the court to that conclusion included the following:
The Services Contract explicitly referenced SKH’s ownership of the power plant and the Operations and Maintenance Agreement between SNC and SKH, including SNC’s obligations to operate and maintain the power plant for SKH’s benefit.
SKH had decision-making authority over certain changes to the power plant’s operations that would trigger GE International’s contractual obligations.
The Services Contract allowed SKH to act unilaterally in order to limit damages and losses during emergencies.
SKH had rights to access certain reports that the Services Contract required GE International to prepare, further evidencing SKH’s direct interest in the contract’s performance.
Because SKH was deemed a third-party beneficiary, the court ruled that its insurers—via subrogation—were also bound by the arbitration clause in the Services Contract. The court distinguished two other federal decisions declining to compel arbitration against third-party beneficiaries where the arbitration clause covered only disputes between the contracting parties.
Delegation of Arbitrability: The Role of ICC Rules
The court then addressed who should decide whether the insurers’ and reinsurers’ specific claims were subject to arbitration, the courts or the arbitrator. The Services Contract incorporated the International Chamber of Commerce (ICC) arbitration rules, which expressly delegate arbitrability decisions to the arbitrator. Citing its own precedent (Terminix Int’l Co., LP v. Palmer Ranch Ltd. P’ship, 432 F.3d 1327 (11th Cir. 2005)), the court found that incorporating the ICC rules was clear evidence that the parties intended to delegate arbitrability decisions to the arbitrator.
This means that the arbitrator, not the court, has to decide which, if any, of the insurers’ and reinsurers’ claims were subject to arbitration.
Key Implications of the Ruling
Contracts should clearly define whether third parties—such as affiliates, subcontractors, and beneficiaries—are bound by arbitration clauses. Manufacturers, suppliers, and distributors should consider whether they are bound by arbitration clauses in vendor contracts they have not signed but for which they could be deemed third-party beneficiaries—or conversely, whether they wish to enforce an arbitration clause against a third party that has not signed it. The same holds true for parties to large-scale construction and engineering contracts involving agreements between multiple stakeholders. Insurers stepping into the shoes of an insured party will normally be bound by the insured’s arbitration obligations, potentially limiting litigation options. And because these issues may depend on which law applies to the arbitration clause, contracts should state that clearly as well.
You can read the court’s full opinion here.
Federal Regulators Continue Crypto Rationalization
Following President Trump’s Executive Order on Digital Assets, which instructed agencies to streamline and rationalize regulation of the digital asset space in a way that is technology-neutral, federal agencies have been responding. Below we summarize recent activities by the Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC) and Commodity Futures Trading Commission (CFTC).
On March 7, 2025, the OCC, which supervises national banks, issued Interpretive Letter 1183 regarding Certain Crypto-Asset Activities for national banks. IL 1183 withdraws several previous interpretive letters that limited national banks’ ability to engage in various crypto-asset activities. Instead, the OCC sought to “ensure that bank activities will be treated consistently, regardless of the underlying technology.”
On March 28, the FDIC took similar action and issued Financial Institution Letter 7-2025 to establish a process for banks engaging in crypto-related assets. FIL 7-2025 replaces prior guidance, FIL 16-2022, and affirms that FDIC-supervised institutions may engage in permissible activities, including activities involving new and emerging technologies such as crypto-assets and digital assets, provided that they adequately manage the associated risks. In contrast to FIL-16-2022, which established a prior notification requirement specific to crypto-related activities, FIL 7-2025 clarifies that FDIC-supervised institutions may engage in certain permissible crypto-related activities without receiving prior FDIC approval.
Also on March 28, the CFTC staff announced the withdrawal of its prior staff advisory entitled Review of Risks Associated With Expansion of DCO Clearing of Digital Assets. In withdrawing the prior guidance, the CFTC staff noted that its regulatory treatment of digital asset derivatives does not vary from its treatment of other products. Instead, the staff conducts its supervision of clearing activities and oversight of compliance with the Commodity Exchange Act and Commission regulations regardless of the specific commodity underlying relevant contracts.
Effective Risk Management for Nursing Facilities: Insurance Insights on Retaliation Claims
This is the first in a series of articles addressing critical issues in risk management and insurance for skilled nursing facilities.
Owners and operators of skilled nursing facilities know that a claim or lawsuit against their facility is not a matter of if, but when. Procuring the proper insurance is critical to effectively managing and mitigating these risks. A professional liability insurance policy should provide coverage for the facility and its directors, administrators, and employees from claims of negligent care.
Unfortunately, merely purchasing a professional liability policy without further scrutiny can leave a facility uninsured for certain claims. These policies incorporate exclusions and conditions that insurers could cite to attempt to limit coverage, particularly for claims that allege intentional injury to a patient resident. For example, an injured patient could allege that her injury was not the result of mere negligence, but instead resulted from retaliation by the facility or the facility’s employee in response to a prior complaint. These retaliation claims pose an increased risk to a facility and its insurance coverage, regardless of whether they are alleged as an intentional tort under a state’s common law or as a violation of a state’s anti-retaliation statute.
In states where retaliation is specifically barred by statute, state laws can create additional liability and damages exposure for claims brought by residents who file formal complaints or bring regulatory actions against nursing facilities alleging retaliation. Earlier this year, for example, the Illinois Legislature passed a new anti-retaliation statute for nursing facilities, House Bill 2474, that broadens the scope of anti-retaliation protections. The Illinois bill, which has passed both houses and been sent to the governor’s office for signature, does not require a formal complaint, but can be triggered by a resident taking more informal action, such as making a request to the facility related to the resident’s care. In addition to potential liability for consequential damages, Illinois HB 2474 also makes nursing facilities liable to the plaintiff for attorneys’ fees and additional damages “in an amount equal to the average monthly billing rate for Medicaid recipients in the facility.” The damage provisions of Illinois HB 2474 differentiate it from other broad anti-retaliation statutes. For example, Minnesota expanded its Patients’ Bill of Rights in 2020 to protect nursing facility residents from retaliation for a host of actions, including advocating “for necessary or improved care or services” (M.S.A. § 144.6512). However, Minnesota’s statute does not provide for a private cause of action for residents to sue the facility.
Even if a state’s anti-retaliation statute does not specify additional damages or provide a private cause of action, retaliation claims brought as common law torts can nevertheless pose the risk of enhanced damages based on the facility’s perceived culpability – a risk not found in ordinary negligence actions.
Retaliation claims are a significant and thorny example of circumstances where allegations of negligent and intentional conduct can intertwine. Unless a statute identifies certain acts that constitute retaliation per se, the patient must necessarily prove an intent to retaliate – retaliation cannot be the result of mere negligence. But ordinary negligence and intentional retaliation could manifest in factually identical ways – with intent being the only distinguishing factor. For example, a resident allegedly injured in a fall while being helped out of bed by a facility employee could assert negligence. But if that same resident had complained to management about the quality of their care prior to the fall, the resident could also allege retaliation, asserting that they were allowed to fall in retaliation for the complaint.
Insurers could seize on retaliation allegations to deny coverage under several exclusions, including exclusions for expected and intended conduct and for willful violations of laws or regulations. Depending on the scope of the policy exclusions, insurers could assert that otherwise insured negligence claims are excluded retaliation claims.
To maximize the potential coverage for claims of retaliation or other intentional conduct bolted on to ordinary negligence claims, insureds should understand that the expected and intended exclusion does not exclude claims that an insured acted intentionally; the insurer must also prove that the insured intended to cause the alleged harm. Unfortunately, a retaliation claim arguably alleges that intent to cause harm if the actions can be attributed to the insured entity or individual.
Insureds can take four steps to mitigate anticipated insurer defenses to coverage for retaliation claims:
First, insureds should seek language limiting the intentional conduct exclusion. The best limiting language would require a final adjudication of intentional conduct at trial (and after exhaustion of all appeals). Insurers could not invoke this exclusion in cases settled before trial.
Second, insureds should confirm that any exclusions based on alleged willful statutory violations do not inadvertently encompass statutory retaliation claims.
Third, because insurers may attempt to allocate liability among the negligence and retaliation claims to reduce their obligations for a settlement prior to trial, insureds should insist on favorable allocation provisions that do not leave the allocation to insurers’ discretion but instead require reasonable allocation based on an objective assessment of the claim.
Finally, insureds should insist on policy provisions requiring the insurer to defend (or preferably pay the defense of) all asserted claims – including arguably excluded claims – as long as at least one claim potentially falls within coverage.
These four steps will provide insureds with additional insurance protection against statutory retaliation claims by limiting the defenses that insurers could otherwise assert in response to these claims. And as always, policyholders should scrutinize their professional liability insurance policies during renewal to maximize the coverage available to them. Many coverage enhancements do not impact premium – but they do require insureds’ diligence and awareness of coverage quagmires before binding insurance, as this discussion of retaliation claims shows.
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FDIC Aims to Eliminate Reputational Risk from Supervision
On March 24, acting FDIC Chairman Travis Hill informed Congress that the agency is preparing to eliminate the use of “reputation risk” as a basis for supervisory criticism. In a letter to Rep. Dan Meuser (R-Pa.), Hill explained that the FDIC has completed a review of its regulations, guidance, and examination procedures to identify and remove references to reputational concerns in its supervisory framework.
Hill stated that the FDIC will propose a rule that ensures bank examiners do not issue supervisory findings based solely on reputational factors, which have faced criticism from lawmakers who argue the concept has been used to discourage banking relationships with lawful but politically sensitive industries.
The FDIC is also reevaluating its oversight of digital asset activities. According to Hill, the agency intends to replace a 2022 policy requiring FDIC-supervised institutions to notify the agency and obtain supervisory feedback before engaging in crypto-related activities. The new approach will aim to provide a clearer framework for banks to engage in blockchain and digital asset operations, so long as they maintain sound risk management practices. Hill noted that the FDIC is coordinating with the Treasury Department and other federal bodies to develop this updated framework.
Putting It Into Practice: This initiative closely mirrors the OCC’s recent decision to eliminate reputational risk as a factor in bank supervision (previously discussed here). Both agencies appear to be responding to criticism that reputational concerns have been used to discourage banking relationships with lawful but disfavored industries. Banks should prepare for changes in examination procedures and evaluate how these developments may impact their compliance strategies.
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Commercial Insurance Offerings to Mitigate Fire-Related Risks
Businesses and people around the world are reeling from the aftermath of shutting down Heathrow Airport in London—one of the world’s busiest travel hubs—due to a fire at a nearby electrical sub-station. Early projections of the economic fallout and related travel disruptions are staggering. The fire at the sub-station not only disrupted travel plans for passengers, but also interrupted countless businesses that rely on the airport, such as airlines, logistics and freight companies, and retailers. Fortunately, these businesses may be able to mitigate their losses through their commercial property policies and policies covering supply chain disruptions. We discuss some of the insurance offerings that may respond to fire-related losses (as well as other losses from other perils) and ways to maximize coverage.
Property Coverage—Covering Physical and Economic Losses From Fire Damage to Your Property
Physical damage to a business’s property imposes costs to repair or replace the damaged property and can disrupt the business resulting in economic losses. Fortunately, many commercial property policies provide “all risks” coverage, meaning any cause of physical loss or damage—fire, wind, hail, etc.—is covered unless it is otherwise excluded. In addition, many commercial property policies also cover the loss of profits resulting from disruption to the business caused by the covered peril. In the case of the electrical fire at the sub-station, the policyholder may be covered for the cost of repairing the damaged property and the profit that would have been earned if the fire did not occur.
Contingent Business Interruption (CBI) Coverage—Covering Economic Losses Resulting From Fire Damage to Someone Else’s Property
Even if a business’s property is not physically damaged, it may be able to recover economic losses resulting from disruptions to another business on which it depended. This type of coverage is commonly known as contingent business interruption coverage, and it is triggered when physical loss or damage to another business causes a disruption to the policyholder’s business resulting in economic loss. Issues may arise, however, concerning which third-party businesses qualify as suppliers or customers on which the policyholder is dependent; this issue often turns on whether the impacted business had a “direct” relationship with the insured business and the specific policy language. Businesses reliant on Heathrow Airport to fulfill their business obligations may have a claim if they experienced a loss due to, for example, delivery delays, order cancellations or the need to arrange for other ways to transport cargo.
Extra Expense Coverage—Covering the Added Costs Incurred as a Result of the Fire Damage to Your or Someone Else’s Property
Many commercial property policies also cover the “extra expenses” a policyholder incurs after it sustains a direct physical loss or damage, or when it sustains a covered contingent business interruption loss. “Extra expenses” are those added expenses that the policyholder incurred as a result of the covered event. For example, extra expenses can include the added costs to receive goods for sale or replacement goods, as well as increased transportation, labor and logistical costs. In the case of the fire at the electrical sub-station that shutdown Heathrow Airport, extra expense coverage could pay for temporary relocation, and costs associated with alternative logistical arrangements like the rerouting of goods.
Supply Chain Coverage
When a business that serves as an element in a supply chain experiences a disruption, the result is usually delays and the need to reassess logistics and operations that rely on the impacted business for deliveries, transactions and just-in-time inventory. While there is no “standard” form for “supply chain insurance,” this insurance is available as an “all risks”-type coverage. Besides covering disruptions caused by property damage to a supplier or a dependent property, supply chain insurance can be customized to cover losses caused by a wide range of events, including production issues (e.g., supplier assembly line malfunctions). For example, supply chain insurance may respond to events like natural disasters and regulatory changes that disrupt a business’s operations.
Tips to Maximize Insurance if Loss Occurs
Ensure You Have Proper Limits: Policyholders should review their commercial insurance policies to make sure, for instance, that all structures (including new ones) are covered, the amount of coverage provided has kept pace with the increasing costs to rebuild property in the area, and the available policy limits can cover the value of the inventory currently at hand. Policyholders should also consider identifying the third-party businesses on which their businesses depend so they can avoid an after-the-fact dispute over whether a business qualifies. Policyholders should also leverage brokers and other business partners to ensure that their coverage aligns with industry standards.
Consult Outside Coverage Counsel: Policyholders should engage coverage counsel that can help analyze insurance terminology, and provide specialized guidance and assistance on improving policies’ terms and conditions to maximize coverage if a loss occurs. Increased limits are helpful only if the underlying coverage terms are strong and there are no problematic exclusions to allow the policyholder to access the full limits.
Document All Aspects of the Loss: Policyholders should keep records on the losses suffered, including documenting all physical damage, the amounts paid to prevent further damage or to remedy existing damage, and the amounts lost because of the disruption of business activities, including lost income.
Document All Claim-Related Communications: Policyholders should also keep a record on all claim-related conversations and communications with insurers and other parties involved in handling the insurance claim. This can be helpful, for example, if litigation is necessary.
Mitigate the Losses: Policyholders should consider taking all reasonable efforts to mitigate the property and business losses following a loss as such efforts can be a condition to coverage. Policyholders should also keep track of and document all those mitigation efforts.
Be on Time: Insurance policies generally place a time limit on filing claims. Indeed, insurers commonly cite late notice of a claim as the basis for denying a claim. Policyholders should thus submit insurance claims within the time periods identified by their policies and pay particular attention to other policy deadlines, such as the time to submit proof of loss and suit limitations provisions.
Takeaway
Events like fires at major hubs of global travel and trade can cause significant physical loss or damage, lost profits, extra expenses and supply-chain disruptions. Commercial policyholders operating such businesses must ensure they are able to protect against these events and resultant losses. Policyholders should carefully review their existing insurance policies to determine which coverages exist, and whether additional or modified terms are warranted if a loss occurs. Each line of coverage should be carefully analyzed and, if needed, modified before a fire-related claim arises.
Oregon Court of Appeals Issues Three Different Defense Opinions
Oregon’s Court of Appeals was busy issuing three different defense opinions on March 19, 2025. Circuit court errs by awarding attorneys’ fees based on a contingency fee.The first was Griffith v. Property and Casualty Ins. Co. of Hartford, where a homeowner submitted a fire loss and alleged the insurer did not pay the benefits owed quickly enough. The insureds filed a complaint, the insurer answered, and then a global settlement occurred. The insureds then filed a motion for summary judgment seeking prejudgment interest per ORS 82.010 as well as attorneys’ fees per ORS 742.061(1). They also sought costs as a prevailing party. The circuit court denied interest because no judgment had been entered and costs because there was no prevailing party, but granted $221,179.27 in attorneys’ fees. Both sides appealed. The insureds’ appeal about prejudgment interest was rejected for procedural reasons. The circuit court order on costs was affirmed because there was no prevailing party. Griffith is noteworthy only for its ruling about attorneys’ fees. The insurer did not dispute that ORS 742.061(1) applied or that the insureds were entitled to attorneys’ fees. It disputed only how the circuit court calculated the amount of the award. The circuit court determined that amount was a percentage of the insureds’ recovery. The Court of Appeals held that this was error.
When an award of attorneys’ fees is permitted, ORS 20.075 provides factors to determine the amount to award. Its factors generally align with the lodestar method. Although a percentage of the recovery might be appropriate in some circumstances, Griffith concluded the “lodestar method is the prevailing method for determining the reasonableness of a fee award in cases, such as this, involving a statutory fee-shifting award, even when, as here, the insured has retained counsel on a contingency-fee basis.” Further, the award “must be reasonable; a windfall award of attorney fees is to be avoided.” The Court of Appeals concluded using a percentage of the recovery was inappropriate in this instance. This is because coverage was never disputed, and the claim was immediately accepted. By the time the complaint was filed, the insurer had made several payments and was still adjusting the loss. There was minimal litigation and the delay paying the full claim “was caused by circumstances outside of the parties’ control.” The Court of Appeals ultimately concluded that the insureds had not met their burden to demonstrate the fees they sought were reasonable. The case was remanded to redetermine the fees owed.
No really, the recreational use statute applies to a city park.In Laxer v. City of Portland, the plaintiff entered Mount Tabor Park to “walk its trails” but tripped and fell due to a hole in the pavement. The plaintiff sued the City, but the circuit court granted the City’s motion to dismiss based on Oregon’s recreational use statute, ORS 105.682. The plaintiff appealed. Among other arguments, the plaintiff argued the paved road in the park was like a public sidewalk and thus exempt from ORS 105.682. The Court of Appeals concluded that while there are limits to ORS 105.682, “generally available land connected with recreation” is still typically protected. Since Mount Tabor Park is clearly connected with recreation, the dismissal was affirmed.
Defense verdict affirmed in slip-and-fall case.In Fisk v. Fred Meyer Stores, Inc., where a customer slipped “on a three-foot by five-foot laminated plastic sign, which had fallen from its stand onto the public walkway.” The sign belonged to the store and was placed there by store employees. The case was tried and produced a defense verdict.
On appeal, the customer conceded there was no evidence to prove the store (1) placed the sign on the ground, (2) knew the sign was on the ground and did not use reasonable diligence to remove it, or (3) the sign had been on the ground for enough time that the store should have discovered it. The customer instead argued the circuit court erred by not giving a res ipsa loquitur instruction. Although Oregon case law has concluded res ipsa loquitur does not apply to slip and falls, the customer argued this was not a slip and fall because an object caused the fall.
Fisk affirmed the circuit court’s refusal to give the res ipsa loquitur instruction. The customer’s attempted legal distinction was meaningless. “We agree with defendant that because plaintiff slipped on an object on the ground, plaintiff’s claim is correctly characterized as a slip-and-fall claim.”
IMC ORDERED TO REPLY TO NATIONAL CONSUMER’S LEAGUE: Eleventh Circuit Appears to Be Proceeding with Caution in Challenge to FCC One-to-One Ruling
Day by day it seems the odds of the one-to-one rule being brought back from the dead steadily increase– even if the ruling is still VERY much dead for the time being.
With the additional scrutiny afforded by 28 AGs suddenly joining with the NCLC to “close the lead generation loophole” the pressure on the court is ramping up.
In the latest development, just minutes ago the court directed IMC to respond to an effort by several additional parties– including the NCL–to join the case.
IMC already responded to an effort by NCLC–that extra C matters!–but now they have to respond regarding the new parties as well.
The order reads:
Respondents are hereby DIRECTED to respond to the motion to intervene filed by the National Consumers League, Mark Schwanbeck, Micah Mobley, Christopher K. McNally, and Chuck Osborne. The response is due on Friday, April 4, 2025.
The order was entered by the clerk of the court “by direction”–meaning the judges wanted to hear more.
Very interesting.
We’ll keep an eye on it.
The Trump Administration Proposes Changes to Regulations Governing Insurance Subject to the Affordable Care Act
In its first major attempt to reform the Affordability Care Act (“ACA”), the Trump Administration issued a proposed rule on March 10, 2025 (“Proposed Rule”) amending regulations governing insurance coverages subject to the ACA.[1] Public comments on the Proposed Rule will be accepted for consideration until April 11, 2025.
In conjunction with the Proposed Rule, the Centers for Medicare & Medicaid Services (“CMS”) issued a statement explaining that the proposed regulations include “critical and necessary steps to protect people from being enrolled in Marketplace coverage without their knowledge or consent, promote stable and affordable health insurance markets, and ensure taxpayer dollars fund financial assistance only for the people the ACA set out to support.” To support its position, CMS cited a report from the Paragon Health Institute suggesting “4 to 5 million people were improperly enrolled in subsidized ACA coverage in 2024, costing federal taxpayers up to $20 billion.” The impact analysis that accompanies the Proposed Rule shows that the Proposed Rule will reduce enrollment in the ACA plans, reduce the number of people who access premium tax credits and cost-sharing reductions that make coverage more affordable, and limit benefits available to individuals including, specifically, coverage for services related to a sex-trait modification as an essential health benefit.
As summarized below, the Proposed Rule contains a variety of key changes to the regulations governing health insurance subject to the ACA that will impact those seeking to obtain health coverage through state and federal insurance marketplaces (the “Marketplace”). In this regard, the Proposed Rule does the following
Allows insurers to deny coverage to individuals who have past-due premium from prior coverage, allowing insurers to consider past due premium amounts as owed as the initial premium for new coverage.
Excludes persons who are Deferred Action for Childhood Arrivals (“DACA”) from eligibility to enroll in a health insurance plans offered on the Marketplace or access premium tax credits and cost-sharing reductions.
Requires CMS to apply a “preponderance of the evidence” standard before terminating an agent for cause as to their agreement with CMS to solicit and sell Marketplace coverage.
Eliminates the ability of an individual to certify to their income when applying for premium tax credits and cost-sharing reductions, instead requiring income determinations be reconciled with tax filing or other information potentially creating coverage delays and administrative barriers. In addition, if an individual does not file a Federal income tax return for two years, the individual will not be eligible for premium tax credits and cost-sharing reductions.
Institutes income eligibility verifications for premium tax credits and cost-sharing reductions and charges people auto-reenrolled into zero-premium plans a small monthly payment until they confirm their eligibility information.
Adjusts the automatic enrollment hierarchy for individuals.
Shortens the annual open enrollment period from the current period, November 15 to January 15, reducing it by one month, to November 15 to December 15.
Removes the monthly special enrollment period (“SEP”) for qualified individuals who become eligible for premium tax credits and cost-sharing reductions because their projected household income falls to or below 150% of the federal poverty level, which means that these individuals will have to wait before they can access premium tax credits and cost sharing reductions.
Changes de minimis thresholds for the actuarial value for plans subject to essential health benefits (“EHB”) requirements and for income-based cost-sharing reduction plan variations.
Updates the annual premium adjustment percentage methodology to establish a premium growth measure that according to the Proposed Rule reflects premium growth in all affected markets, increasing the cost of coverage.
Prohibiting insurance companies subject to ACA requirements from providing coverage for services related to a sex-trait modification as an essential health benefit.
These changes will not take effect immediately, as the Proposed Rule now faces a public comment period that stays open until April 11, 2025. After receipt of public comments, CMS may revise the Proposed Rule before issuing it in final form. If instituted, these changes could have significant impacts on the approximately 24 million Americans who enrolled in coverage in the ACA Marketplace for 2025 and who plan to enroll in coming years. Most importantly, consumers will have less time to enroll and need to present additional documentation to demonstrate eligibility for premium tax credits and cost-sharing reductions creating administrative barriers to enrolling in coverage. In addition, automatically re-enrolled consumers will be charged a small monthly fee until they confirm their eligibility information. Significantly, individuals who are brought to the country from abroad as children and are DACA status will be prohibited in enrolling in Marketplace coverage. And finally, the Proposed Rule prohibit insurers from covering gender-affirming care as essential health benefits.
[1] Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability, CMS-9884-P, 90 Fed. Reg. 12942 et seq. (the “Proposed Rule”).
Litigation Minute: Emerging Contaminants: Minimizing and Insuring Litigation Risk
WHAT YOU NEED TO KNOW IN A MINUTE OR LESS
As the scientific and regulatory landscape surrounding various emerging contaminants shifts, so too do the options that companies can consider taking to minimize and insure against the risk of emerging-contaminant litigation.
The second edition in this three-part series explores considerations for companies to minimize that risk and provides consideration for potential insurance coverage for claims arising from alleged exposure to emerging contaminants.
In a minute or less, here is what you need to know about minimizing and insuring emerging-contaminant litigation risk.
Minimizing Litigation Risk
As we discussed in our first edition of this series, regulation of emerging contaminants often drives emerging-contaminant litigation. For example, in emerging-contaminant litigation that alleges an airborne exposure pathway, plaintiffs’ complaints often prominently feature information from the US Environmental Protection Agency’s (EPA’s) National Air Toxics Assessment (NATA) screening tool and its predecessor, the Air Toxics Screening Assessment (AirToxScreen). AirToxScreen, and NATA before it, is a public mapping tool that can be queried by location, specific air emissions, and specific facilities to identify census tracts with potentially elevated cancer risks associated with various air emissions. Despite these tools’ many limitations, their simplicity and the information they provide have served as a foundation for many civil tort claims.
The takeaway: Since NATA and AirToxScreen use the EPA’s National Emission Inventory (NEI) as a starting point, companies with facilities that have emissions tied into NEI should carefully consider the implications of their reported emissions. For example, in some situations for some companies, it could be appropriate to consider whether to examine reported emissions and control technologies to determine whether adjustments can be made to reduce reported emissions to better reflect reality on a going-forward basis. In addition, requests for emerging contaminants sampling and reporting by regulatory agencies may be made publicly available.
Regulatory compliance is not always an absolute defense in tort litigation, but in most situations, compliance with existing regulations will be relevant to whether a company facing emerging-contaminant litigation met the applicable standard of care. Companies should examine applicable regulations against established compliance efforts and, as appropriate and applicable to any given company, consider whether it may be appropriate to closer examine compliance programs for continued improvements or audit established protocols to substantiate safety.
Insurance Coverage Considerations
Policyholders facing potential liability for claims arising out of alleged exposure to emerging contaminants should consider whether they have insurance coverage for such claims.
Commercial general liability insurance policies typically provide defense and indemnity coverage for claims alleging “bodily injury” or “property damage” arising out of an accident or occurrence during the policy period. While some insurers are now introducing exclusions for certain emerging contaminants (and most policies today have pollution exclusions), the underlying claim(s) may trigger coverage under occurrence-based policies issued years or decades earlier, depending on the alleged date of first exposure to the contaminant and the alleged injury process.
These older insurance policies are less likely to have exclusions relevant to emerging contaminants, and policies issued before 1986 are more likely to have a pollution exclusion with an important exception for “sudden and accidental” injuries, or no exclusions at all. In addition, some courts have ruled that pollution exclusions do not apply to product-related exposures or permitted releases of certain emerging contaminants.
In deciding whether there is potential insurance coverage for claims alleging exposure to emerging contaminants, policyholders should also consider whether they have potential coverage for such claims under insurance policies issued to predecessor companies. If insurance records are lost or incomplete, counsel can often coordinate an investigation, potentially with the assistance of an insurance archaeologist, and may be able to locate and potentially reconstruct historical insurance policies or programs.
The takeaway: Do not overlook the possibility of insurance coverage for potential liability regarding claims arising out of alleged emerging contaminant exposure. To maximize access to potential coverage, policyholders should act promptly to provide notice under all potentially responsive policies in the event of emerging-contaminant claims. Our experienced Insurance Recovery and Counseling lawyers can help guide policyholders through this process.
Our final edition will touch on considerations for companies defending litigation involving emerging contaminants. For more insight, visit our Emerging Contaminants webpage.