Proposed New Legislation to Significantly Impact the Dynamics of First-Party Insurance Disputes in Florida
In December 2022, the Florida Legislature held a special session to stabilize Florida’s struggling insurance market. The outcome was Senate Bill 2A, comprehensive legislation that, in part, repealed Florida’s long-standing one-way attorney fee provision in first-party property damage coverage disputes, which had provided policyholders the right to attorney fees if they secured any amount in a lawsuit against their insurers. The elimination of one-way attorney fee awards, and the return to the American rule that parties pay their own legal fees, significantly reduced frivolous suits and predatory litigation in the property insurance context, but also served to deter, and sometimes impede, non-frivolous suits by policyholders, because (i) policyholders were unable to pay attorney fees out-of-pocket, (ii) contingency-fee agreements left policyholders without enough money to complete repairs to property, and (iii) policyholders and attorneys were disincentivized from prosecuting small-value claims. The result was potential inequities in pursuing legitimate claims arising from property damage coverage disputes.
Florida now appears poised to realign the playing field through the enactment of Florida House Bill 1551 (HB 1551) and Florida Senate Bill 426 (SB 426), which were filed in February 2025.
HB 1551 mandates, through the creation of sections 627.4275 and 626.9375 of the Florida Statutes, that courts award attorney fees to prevailing parties in first-party insurance disputes against surplus lines and other property insurers; it provides that an insured is the “prevailing party” upon obtaining a judgment greater than the highest written, good faith settlement offer previously made by the insurer, and that an insurer is the “prevailing party” when the insured does not obtain a judgment greater than the highest written, good faith settlement offer previously made by the insurer. HB 1551 provides that an offer made by an insurer must be left open for at least five (5) business days to qualify as a “good faith” offer. The bill defines “judgment” to include any reasonable attorney fees, taxable costs, and prejudgment interest incurred by an insured when the highest written, good faith settlement offer previously tendered by an insurer was made. The definitions of “prevailing party,” as it relates to an insured, and “judgment” incorporated into HB 1551 generally mirror the definitions of those terms the Florida courts used to apply when interpreting the now-repealed one-way attorney fee statute.
Importantly, HB 1551 provides that Florida’s offer of judgment statute does not apply where prevailing party attorney fees are awardable. In practical terms, this will make the two-way, prevailing party attorney fee statutes (ss. 627.4275, 626.9375) the sole mechanism by which attorney fees may be awarded in first-party insurance coverage disputes (absent the award of attorney fees as a sanction under s. 57.105, F.S., or a controlling contract provision).
SB 426 is the companion to HB 1551. It requires courts to award reasonable attorney fees to prevailing parties in declaratory relief actions to determine insurance coverage after an insurer has “denied coverage or reserved its right to deny coverage in the future.” SB 426 specifies that awardable fees are “limited to those incurred in the claim for declaratory relief to determine coverage of insurance.”
Both HB 1551 and SB 426 specify that changes made by the bills will apply only to policies issued on or after their effective date(s) and may not be construed to impair or limit any right under an insurance policy or contract issued before the bills’ effective date(s).
These legislative proposals aim to promote fairness, reduce unnecessary lawsuits, and address the perspective that the previous 2022 reforms left consumers vulnerable to insurers. HB 1551 and SB 426 would establish a “loser pays” system, where the losing party is responsible for the prevailing party’s attorney fees.
If the legislative proposals pass, courts will need to interpret the intent of the legislation to ensure its application promotes fairness in insurance disputes and establish clear guidelines for the determination of the “prevailing party” and the calculation of reasonable attorney fees.
On March 20, 2025, HB 1551 was heard by the Insurance & Banking Subcommittee of the House and received favorable reporting. SB 426 is currently awaiting action before the Senate Banking and Insurance Committee. Florida’s legal community anticipates their enactment in the coming months.
Some insurers have expressed strong concerns about the proposed legislation, fearing it may reverse recent reforms aimed at stabilizing Florida’s insurance market. The 2022 legislation, which the new legislation seeks to amend, was credited with attracting new insurers to Florida and slowing premium increases. Opponents to the proposed new legislation argue that reinstating a “loser pays” system could lead to increased litigation and higher costs for insurers, again potentially destabilizing Florida’s property insurance market.
Overall, the proposed new legislation should incentivize insurers to expediently and fairly resolve insurance disputes, and incentivize insureds to accept fair settlement offers tendered by their insurers. The proposed new legislation will likely increase Florida’s first-party property damage coverage litigation. However, the volume of new lawsuits is not likely to approach the volume of suits seen prior to Florida’s 2022 repeal of one-way fee-shifting, and the proposed new legislation may result in an increase in insurance premiums.
New Federal Case Addresses Related Claims Under Executive Protection Policy
Introduction 1
As the saying goes, we cannot choose the family to whom we are related. But courts across the country regularly grapple with choosing whether multiple lawsuits and other insurance claims are indeed related, including most recently the federal District Court of Hawaii in the case of Great American Insurance Company v. Discovery Harbour Community Association, 2025 U.S. Dist., LEXIS 26654 (D. Haw. Feb. 3, 2025).
Why are provisions defining related claims or related wrongful acts important to the scope of insurance coverage? Policies that provide executive protection coverage, such as Directors & Officers Liability or other professional liability policies, are generally written on a claims-made basis. The event triggering an insurer’s obligations is the claim first made and reported against an insured during the policy period, not the timing of the act at issue. Claims-made policies effectively provide retroactive coverage for wrongful acts taking place before the policy period. On the other hand, occurrence policies cover an event that takes place during the policy period, triggering the insurer’s obligation. Occurrences do not necessarily produce claims or lawsuits right away. Thus, for a claims-made policy, the “relatedness” provisions can impact the number of claims at issue, when such claims are deemed made, and whether one or more separate policy limits or retentions apply.
Discovery Harbour
The Discovery Harbour case, decided in February 2025, involved an insurance coverage dispute between an insurer, Great American, and its policyholder, Discovery Harbour Community Association. Great American filed a motion for judgment on the pleadings, seeking a declaratory judgment that two underlying state court lawsuits against the Association were related and subject to a single policy limit. The Association opposed the motion, arguing that the two lawsuits were distinct and unrelated.
Great American had issued two separate claims-made Non-Profit Organization Executive Protection Insurance Policies, which provided coverage only for claims initiated during the respective policy periods. The policies defined “related” claims as those involving the same wrongful acts or “Related Wrongful Acts,” i.e., acts “logically or causally connected by any common fact, circumstance, situation, transaction, casualty, event or decision.” Thus, the earlier policy applied to both if the lawsuits were related. If the lawsuits were unrelated, two separate policies could apply for the two separate policy periods.
The two state court lawsuits were filed by South Point Investment Group, LLC (“SPIG”) against the Association in the same court, and challenged the existence of the Association and disputed the legitimacy of its governing documents — one filed in 2016, and one in 2018. Both lawsuits also involved five parcels of land owned by SPIG within the Discovery Harbour subdivision.
The 2016 lawsuit sought declaratory relief regarding the Association and its members, whereas the 2018 lawsuit sought tort damages for misrepresentations made to third parties, allegedly intended to interfere with SPIG’s property rights. In addition, the 2018 lawsuit added insured individuals as defendants for the first time (none were named in the 2016 lawsuit).
In seeking coverage under two separate policy years, the Association argued that the lawsuit had been litigated independently for many years. The Association also argued that the evidence in the lawsuits was not temporally related, because the 2016 lawsuit related to Association formation issues in the ‘70s and ‘80s, whereas the 2018 lawsuit alleged misrepresentations only during the three years before the 2018 lawsuit was filed. The Association further argued that its answer in the coverage litigation generally denied much of Great American’s relatedness allegations and, taken as true, provided factual challenges to the relatedness allegations. The Association also argued that the 2018 lawsuit added insured individuals as defendants, none of whom were named in the 2016 lawsuit.
However, the court viewed established case law evaluating whether two or more claims are related as hinging more on the similarities of the allegations, not their differences. Although the timeframes of the two lawsuits differed, the court viewed them as “temporally and factually connected” because they both arose from the Association’s legal authority and formation, and involved the same plaintiff (SPIG) and the same defendant (Association). The disputes also centered on the same five parcels of land owned by SPIG and related to the Association’s covenants. The fact that the two lawsuits were litigated independently was inconsequential, and the lawsuits were viewed as related despite seeking different remedies. The court rejected the insured’s argument that the lawsuits shared only “superficial similarities,” finding at least a dozen identical allegations of wrongful acts and stating that “the existence of one common wrongful act is sufficient to establish relatedness.”
The court found that Great American’s motion should be granted because the lawsuits were related and therefore constituted a single claim subject only to the earlier policy and its single policy limit, despite the second lawsuit adding new insured persons not named in the prior lawsuit and new causes of action not previously alleged in the prior lawsuit.
Comparison and Comment
Policies contain varying “relatedness” language, whether applicable to related claims or related wrongful acts, and the courts have applied different tests to interpret that language, generally requiring a strictly fact-based analysis. For example, the seminal case of Bay Cities Paving & Grading, Inc. v. Lawyers’ Mut. Ins. Co., 855 P.2d 1263 (Cal. 1993) involved an attorney’s failure to foreclose a mechanics lien and serve a stop notice on a construction project’s lenders. Despite what appeared to be different types of claims against various parties, the court found the claims were related in a number of ways. They arose out of the same transaction, were committed by the same attorney, and resulted in the same injury.
In contrast, in Vito v. RSUI Indem. Co., 435 F. Supp. 3d 660 (E.D. Pa. 2020), a shareholder derivative suit was filed in 2018 against the insured, Unequal Technologies, and its CEO. The insurer denied coverage, contending that the shareholder derivative lawsuit was interrelated with a February 2015 shareholder demand and a June 2016 shareholder derivative lawsuit (which was a prior demand and suit by a different plaintiff, but also alleged that the CEO disregarded corporate formalities and engaged in self-dealing). The policy broadly defined related claims as all claims “based on, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving the same or related facts, circumstances, situations, transactions or events, or the same or related series of facts, circumstances, situations, transactions or events.” However, the Judge denied the insurer’s arguments that the lawsuits were related, noting that the parties were different, the relief sought was different, and the latter suit “goes beyond” the earlier suit and had one but not all related causes of action.
In the case of ADI Worldlink, LLC v. RSUI Indem. Co., 2017 WL 4112112 (E.D. Tex. Sept. 18, 2017), the policy provided a similar “relatedness” standard for all claims, based on, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving the same or related facts, circumstances.” The court considered multiple arbitration claims by employees claiming they were “exempt” and entitled to overtime pay, and thus involved different claimants, but the same wrongful conduct and the same injury. The court found the proceedings were related, and because the insured gave late notice of the first claim, it was not entitled to coverage for the subsequent related claims.
Including the latest decision in Discovery Harbour, it is clear that “relatedness” determinations hinge on the exact policy language and facts, and considerations may include but are not limited to the same or different parties, the same or different acts or omissions, and the same or different injury or damages.
1 James K. Thurston and Thomas M. Spitaletto cochair Wilson Elser’s D&O/E&O Insurance Subcommittee. James successfully briefed and argued the recent case of Great American Insurance Company v. Discovery Harbour Community Association, 2025 U.S. Dist. LEXIS 26654 (D. Haw. Feb. 3, 2025), as discussed herein.
Colorado Supreme Court’s Ruling in Fear v. GEICO – What’s Next in Colorado When Evaluating Undisputed Amounts Owed
The Colorado Supreme Court recently issued its opinion in Fear v. GEICO Casualty Company, 2024 CO 77. The Court certified two questions:
Whether it is reasonable, as a matter of law, for a UM/UIM carrier to refuse to pay non-economic damages because such damages are “inherently subjective.”
Whether an insurer’s pre-suit, internal settlement evaluations are admissible as evidence of undisputed benefits owed under State Farm Mut. Auto Ins. Co. v. Fisher, 2018 CO 39.
In answering the certified questions, the Supreme Court held that (1) it is not reasonable as a matter of law for an insurer to refuse to pay non-economic damages because such damages are inherently subjective and (2) an insurer’s pre-suit internal evaluations are not admissible to establish undisputed amounts owed but can be used for other purposes, such as to prove an insurer’s good or bad faith.
The Fear case follows the Supreme Court’s holding in Fisher in 2018, that a UM/UIM carrier is required to tender the undisputed amounts owed once determined and if it refuses to or delays in doing so, it is liable under C.R.S. § 10-3-1115/1116. Pursuant to C.R.S. § 10-3-1115/1116 (applicable to both first- and third-party claims in Colorado), an insurer is liable for two times the covered benefit owed under a policy if the benefits are unreasonably delayed or denied without a reasonable basis.
The Fisher case set the stage for Fear, as policyholder counsel pushed UM/UIM carriers to tender not only the undisputed medical expenses or wage loss but also non-economic damages based on the carriers’ evaluations. Policyholders’ counsel argued that once the insurer set a potential range for recoverable non-economic damages, that range was undisputed and thus, must be tendered. Prior to Fear, some insurers tendered non-economic damages while others did not, arguing that non-economic, general damages are inherently subjective and always reasonably disputed until determined by a jury.
A great many of the trial courts that weighed in on the issue agreed with the insurers, but the trial judge in Fear did not. Rather, the judge held that the Fisher holding extended to non-economic damages and found that GEICO’s evaluation range in its pre-suit evaluation was an undisputed value.
GEICO appealed the trial court’s ruling, and the Court of Appeals reversed. Thereafter, the Supreme Court accepted certiorari. The crux of the Supreme Court’s ruling in Fear is that a carrier cannot refuse to pay non-economic damages simply because such damages are “inherently subjective.” Further, a policyholder cannot introduce an insurer’s pre-suit claim evaluation to show the amount of undisputed benefits owed, although the evaluation may be admissible to show an insurer’s good faith or bad faith in the handling of a claim.
The Fear decision provides some guidance for carriers in addressing non-economic damages and whether such damages are reasonably disputable – noting that “circumstances may exist in which section 10-3-1115 requires an insurer to pay some or all of an insured’s alleged non-economic damages prior to final resolution of a claim.” The Fear court affirmed the Court of Appeals’ decision, albeit on different grounds, noting that the only evidence offered by the policyholder to prove that the non-economic damages were undisputed was GEICO’s pre-suit evaluation, which was inadmissible and, thus, could not be used to establish the undisputed amounts owed.
Conclusion
The questions unanswered by the Supreme Court are what circumstances would require a carrier to advance non-economic damages and how could that be proven – both of which will likely be the new frontier for UM/UIM bad faith litigation in Colorado.
Nothing in Colorado law requires a carrier to do a written evaluation of an insured’s damages, but that evaluation, if written and documented in the file, can be the touchstone in any bad faith case – proving either the carrier’s unreasonableness and, thus, bad faith conduct or, alternatively, the carrier’s reasonableness in the handling of the claim and its good faith. Carriers should consider the nature and purpose of their evaluations, identifying training and strategies going forward for their claims teams as to how the evaluation could be used in a later bad faith case to establish its reasonableness in the defense of any bad faith claim.
Colorado policyholder attorneys are aggressive and have taken advantage of adjusters inexperienced in handling Colorado claims. Going forward, carriers should look not only for ways their evaluations can be used against them but also how those evaluations could be used to help them in any subsequent bad faith case.
Where There’s Fire, There’s Smoke … and Smoke Damage Disputes
In January 2025, dozens of wildfires ripped through Los Angeles in a way no one could have imagined. We all spent the week in front of televisions waiting to see which direction the winds would take the fires. Those not forced to officially evacuate had bags ready to go in case a new fire flared closer to home. And while the City braced for decades of rebuilding efforts, the insurance coverage attorneys waited for the inevitable coverage disputes to begin.
The initial response to the wildfires was not likely to generate disputes between the insurers and insureds. According to data from the California Department of Insurance (DOI), as of January 30, 2025, out of 31,210 claims related to the fires, 14,417 were immediately partially paid to the tune of $4.2 billion. Within a week, by February 5, 2025, the number of claims increased to 33,717 with 19,854 partially paid in the amount of $6.9 billion.1
During this time, insurers were following their modified obligations under the California Regulations given the DOI’s emergency declaration of January 9, 2025, which imposed certain additional obligations on the insurers for a total loss:
The insurer must offer an immediate payment of at least 30% of the contents policy limit up to $250,000 (Cal. Ins. Code § 10103.7).
An insured does not need to use the insurer’s inventory form and does not need to itemize the contents (Cal. Ins. Code § 2061(a)(2)(3)).
At an insured’s request, the insurer must advance at least four months of additional living expenses (Cal. Ins. Code § 2061(a)(1)), and the insured is entitled to at least 36 months of ALE coverage (Cal. Ins. Code § 2060(b)(1)).
Neither an insured nor an insurer can demand appraisal without the other’s consent (Cal. Ins. Code § 2071).
An insurer cannot cancel or refuse to renew a residential property policy in a zip code adjacent to a fire perimeter based solely on the wildfire location (Cal. Ins. Code § 675.1(b)(1)).
The insurer must provide a 60-day grace period for premium payments (Cal. Ins. Code § 2062).
While the total-loss claims were not going to spark much controversy, it was only a matter of time before the smoke damage claims ignited and the insurance world incurred an onslaught of coverage disputes.
Legal Decisions Regarding Smoke Damage
The question of whether smoke damage constitutes “property damage” is an ongoing issue in California. The matter was litigated heavily during the COVID-19 pandemic where businesses frequently claimed “property damage” from the virus. Courts in California generally found that COVID-19, without more, did not constitute “property damage.” Another Planet Entertainment, LLC v. Vigilant Ins. Co., 15 Cal. 5th 1106, 1117 (2024). In the weeks following the start of the 2025 wildfires, two decisions came down in California addressing coverage for smoke damage arising out of earlier fire events.
On January 10, 2025, the U.S. District Court for the Northern District of California issued a decision in Bottega LLC v. National Surety Corp., 2025 U.S. Dist. LEXIS 5666 (N.D. Cal. Jan. 10, 2025). In that case, the owner of a restaurant and a cafe sought business income loss coverage stemming from the 2017 North Bay wildfires, which had prompted a state of emergency. Id. at *2-3. While the fires did not reach the insured’s businesses, the businesses could not operate because of the related smoke and ash, requiring the employees to clean and make temporary repairs. Id. at *4. The court recognized that to trigger coverage, “there must be some physicality to the loss … of property – e.g., a physical alteration, physical contamination, or physical destruction.” Id. at *10, quoting Inns-by-the-Sea v. California Mut. Ins. Co., 71 Cal. App. 5th 688, 707 (2021) (emphasis in original). The court found there to be “direct physical loss and damage to” the businesses as “[c]ontamination that seriously impairs or destroys its function may qualify as a direct physical loss.” Bottega, 2025 U.S. Dist. LEXIS 5666 at *10-11. The court stated that, “the COVID-19 cases [the insurer] cites are unpersuasive because courts distinguished COVID-19 – a virus that can be disinfected – from noxious substances and fumes that physically alter property.” Id. at *11-12. Accordingly, the court reasoned, “[w]hereas a virus is more like dust and debris that can be removed through cleaning, [citation] smoke is more like asbestos and gases that physically alter property.” Id. at *12.
A competing decision was issued on February 7, 2025, by the California Court of Appeal in Gharibian v. Wawanesa General Ins. Co., 108 Cal. App. 5th 730 (2025). There, the insureds’ residence purportedly suffered smoke damage after the 2019 Saddle Ridge wildfire. Id. at 733. The insurer paid for the insureds to have the home professionally cleaned, but the insureds opted to clean the home themselves and filed a bad faith suit. Id. at 734-735. The Court of Appeal held that, “[u]nder California law, direct physical loss or damage to property requires a distinct, demonstrable, physical alteration to property. The physical alteration need not be visible to the naked eye, nor must it be structural, but it must result in some injury to or impairment of the property as property.” Id. at 738, quoting Another Planet Entertainment, LLC v. Vigilant Ins. Co., 15 Cal. 5th 1106, 1117 (2024). Relying on COVID-19 cases, the Gharibian court reasoned, “[h]ere there is no evidence of any ‘direct physical loss to [plaintiffs’] property.’ The wildfire debris did not ‘alter the property itself in a lasting and persistent manner.’ … Rather, all evidence indicates that the debris was ‘easily cleaned or removed from the property.’ … Such debris does not constitute ‘direct physical loss to property.’” Gharibian, 108 Cal. App. 5th at 738 (citations omitted).
These decisions leave California insurers unclear as to whether smoke damage constitutes “property damage” sufficient to trigger coverage under homeowners and commercial policies. In finding coverage, the Bottega court said the insured made some undefined “partial/temporary repairs” to the property after the nearby wildfire, which may have factored into the ultimate decision that “property damage” existed. Bottega, 2025 U.S. Dist. LEXIS 5666 at *4. In declining coverage, the Gharibian court dealt with a situation where the ash could be wiped from surfaces with no permeating smell of smoke and no referenced repairs. Gharibian, 108 Cal. App. 5th at 733. Given this conflicting precedent in California, what are insurers expected to do?
DOI Guidance
On March 7, 2025, the DOI provided guidance through Bulletin 2025-7,2 which sets forth the DOI’s “expectations with regard to how insurance companies process and pay smoke damage claims as a result of wildfires, including the recent Southern California wildfires.” The DOI’s Bulletin explicitly states that the “recent cases do not support the position that smoke damage is never covered as a matter of law.” (emphasis in original). The Bulletin reiterates the need for a full investigation into each smoke damage claim and states, “[i]t is not reasonable to deny a smoke damage claim without conducting an appropriate investigation, nor is it reasonable for the insurer to require the insured to incur substantial costs to investigate their own claim.” The DOI advised it would monitor insurers’ responses to such claims.
Conclusion
Ultimately, and consistent with the DOI Bulletin, the coverage evaluation will likely turn on a case-by-case basis, looking at the scope of damage to the insured and the physical alteration of the property. Absent the lack of a physical loss, smoke damage is usually not excluded by other provisions in the policy.3
Our best advice? Insurers are encouraged to continue to actively investigate these claims and be diligent throughout the claims handling process. To that end, insurers should hire experts where needed and push for information from the insureds as necessary to complete the claims investigation. Insurers also must be mindful of the growing anti-insurer sentiment in Los Angeles (regardless of the billions already paid on claims). We anticipate the litigation following these latest wildfires will provide new insight on whether smoke damage constitutes “property damage” to trigger coverage.
1 https://www.insurance.ca.gov/01-consumers/180-climate-change/Wildfire-Claims-Tracker.cfm.
2 https://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/Bulletin-2025-7-Insurance-Coverage-for-Smoke-Damage-and-Guidance-for-Proper-Handling-of-Smoke-Damage-Claims-for-Properties-Located-in-or-near-California-Wildfire-Areas.pdf.
3 Other jurisdictions have held that smoke damage is not precluded by pollution exclusions. Kent Farms, Inc. v. Zurich Ins. Co., 140 Wn. 2d 396, 400 (2000); Allstate Ins. Co. v. Barron, 269 Conn. 394 (2004).
Massachusetts Court Denies Permanent Injunction in Chapter 93A Case: Insufficient Evidence of Ongoing or Future Violations
The Superior Court of Massachusetts recently weighed in on the necessity of entering a permanent injunction under Chapter 93A, Section 4, in Commonwealth v. Mega Life & Health Ins. Co. Following the court’s entry of findings of fact, rulings of law, and judgment in favor of the Commonwealth, the Commonwealth sought permanent injunctive relief to prohibit the defendants, along with their successors and related entities, from selling insurance products in Massachusetts. Despite finding in favor of the Commonwealth, the court declined to enter a permanent injunction, concluding that the Commonwealth had not presented sufficient evidence to justify its necessity.
To obtain a permanent injunction, a government litigant must demonstrate that the requested order promotes the public interest or, alternatively, that the relief sought will not adversely affect the public. Such relief is warranted only when there is evidence of ongoing harm from past unlawful conduct or a likelihood of future violations. In this case, the Commonwealth did not present evidence of recent or ongoing violations by the defendants. Instead, the trial evidence focused solely on violations that occurred between 2012 and 2018.
The court noted that it lacked information about the defendants’ current market activities, business plans, or intentions to reenter the Massachusetts market. Without evidence of recent or ongoing misconduct or a clear indication of future violations, the court found no basis for issuing a permanent injunction. Accordingly, the request for injunctive relief was denied, as the court determined that such an order would have no appreciable impact on protecting consumers.
Shopping for Property and Casualty Insurance: What Legal and Financial Professionals Need To Know
Insurance isn’t just a compliance formality — it’s one of the most complex and potentially consequential contracts a business will ever sign. Yet despite its importance, most companies don’t have lawyers review their property and casualty (P&C) policies. Instead, they rely on brokers — who, while often knowledgeable and client-focused, are also salespeople.
The irony isn’t lost on anyone who’s actually tried to parse these policies. Written in archaic, legalistic language, insurance contracts are not easy to understand. Between exclusions, exceptions to exclusions, endorsements, and undefined terms, even seasoned attorneys can struggle to interpret what’s actually covered.
This article unpacks how legal and financial professionals can shop for insurance with more clarity — and fewer surprises — in an increasingly high-stakes market.
What’s the Difference Between Property and Casualty?
Property insurance covers damage to physical assets like buildings and equipment. It often includes business interruption coverage, which replaces lost income when operations are shut down due to a covered event.
Casualty insurance addresses legal liability. It covers obligations if someone is injured on your premises, sues for damages caused by your operations, or is harmed by a defective product. Casualty policies typically include legal defense costs, settlements, and judgments.
Dr. David Pooser, a professor at East Carolina University, emphasizes the need to distinguish these categories. Property losses are often immediate. Liability claims can unfold slowly, sometimes over years.
Commercial vs. Personal Coverage
While personal and commercial insurance may look similar, they function differently. Jeff Gibson from Towne Insurance points out that commercial policies are tailored to specific business risks — from professional liability to auto fleets and directors and officers (D&O) coverage.
Personal insurance policies are standardized for individual needs — like auto or homeowners insurance. If you’re a sole proprietor or consultant, relying on personal insurance for business risks may create gaps that won’t be covered when it matters most.
Agents vs. Brokers: Who Represents You?
Gary Kirshenbaum of Alera Group explains that agents typically work for insurers, while brokers work for clients. This has legal implications: brokers are obligated to find the best terms and coverage for their clients, while agents may be limited to offering products from one carrier.
Independent agents sometimes bridge this gap, representing multiple insurers while advocating for the client. But it’s essential to clarify these roles. Misunderstandings in representation can impact policyholder rights in claims disputes.
Evaluating Insurance Professionals
Designations like CPCU, CIC, or ARM demonstrate technical knowledge and ethics, but experience and communication matter just as much. According to Jeff Gibson, a good insurance advisor explains terms clearly, is proactive about renewals, and advocates for the client.
The best professionals can balance technical skill with responsiveness and trustworthiness.
Start the Process Early
Gibson and Kirshenbaum recommend beginning the shopping or renewal process 90 to 120 days before your policy ends for commercial insurance and around 60 days for personal insurance. Waiting too long can limit your options and create last-minute stress.
Switching brokers? Do it right after your renewal, when there’s time to evaluate your existing coverage and compare alternatives.
Is Your Insurer Financially Strong?
Insurance is a promise to pay in the future. Dr. Pooser underscores the importance of working with carriers that have solid financials. Look to A.M. Best, S&P, or Moody’s for credit ratings. The NAIC Consumer Information Source also provides complaint trends.
Understanding Coinsurance Clauses
Brenda Wells, director of the East Carolina University Risk Management and Insurance Program, cautions that coinsurance clauses are often misunderstood. These clauses require property to be insured for a certain percentage of its value (typically 80% to 90%). Failure to meet that threshold can result in a penalty, even on partial losses.
Claims-Made vs. Occurrence Coverage
Dr. Pooser explains that liability insurance comes in two flavors: claims-made and occurrence-based.
Claims-made policies cover claims filed during the policy term, even if the incident occurred earlier (as long as it’s after the retroactive date).
Occurrence policies cover events that happen during the policy term, even if the claim is filed later.
Professionals in fields like law and accounting often use claims-made policies and should consider tail coverage to extend protection beyond the policy period.
Legal Clauses To Watch
Two important provisions to understand are the resulting-loss exception and the non-cumulation clause:
Resulting-loss exceptions allow coverage for damage that results from an excluded peril. For instance, if faulty plumbing causes water damage, the water damage may be covered even if the plumbing work isn’t.
Non-cumulation clauses cap the insurer’s total payout across policy years, even if a claim spans multiple terms. This can affect long-tail liabilities like environmental claims.
Policy Enhancements Worth Considering
Many policyholders overlook valuable coverage additions. These include:
Cyber liability endorsements for data breaches and ransomware attacks.
Employment Practices Liability Insurance (EPLI) for workplace lawsuits.
Umbrella policies that add liability protection above existing limits.
Business interruption coverage that includes extra expenses like relocation or overtime.
Common Pitfalls To Avoid
Business owners and professionals often make a few avoidable mistakes including:
Shopping based only on premium.
Underinsuring high-value property.
Ignoring exclusions or sublimits.
Failing to consider umbrella or tail coverage.
Kirshenbaum points out that underwriters track quote activity. Constantly shopping without changing carriers may hurt your standing with insurers.
Current Market Challenges
Kirshenbaum and Wells note that today’s insurance market is especially tough. Rates are rising due to inflation, climate risks, and high litigation awards (‘nuclear verdicts’). Insurers are tightening underwriting and exiting certain markets altogether.
A Strategic Asset, Not Just a Requirement
Insurance isn’t just a compliance tool. As Brenda Wells emphasizes, it’s a critical component of a well-run risk management strategy. Legal and financial professionals should treat insurance policies as contracts, read them carefully, and work with experts who explain the implications.
Good insurance is more than coverage — it’s clarity, continuity, and confidence.
To learn more about this topic, view Corporate Risk Management / Shopping for Property and Casualty Insurance Released On-Demand. The quoted remarks referenced in this article were made either during this webinar or shortly thereafter during post-webinar interviews with the panelists. Readers may also be interested to read other articles about property and casualty insurance.
This article was originally published on May 12, 2025.
©2025. DailyDACTM, LLC d/b/a/ Financial PoiseTM. This article is subject to the disclaimers found here.
A Simple Guide: What if My Life Insurance Claim Is Denied?
How does the life insurance claims process work?
Industry surveys contend that life insurance claims are denied less than 5% of the time, while others more skeptical of the life insurance industry believe the denial rate is several times higher than that. An issue that is not up for debate is that life insurance claims all arise from tragic and stressful situations, which necessarily leave claimants vulnerable and essentially at the mercy of large, profit-driven life insurance companies.
There are many types of life insurance products, but all of them boil down to “term” or “permanent” life insurance. Simply stated, a term life insurance policy covers a set amount of time – for example, a 20-year policy should pay a death benefit if the insured passes away during that 20 years. After the 20-year term passes (and there is no renewal), the policy ends. As a rough comparison, a term policy is like leasing a car – after three years, the car is turned in and the owner and dealer go their separate ways.
A permanent life insurance policy can take various forms (such as “whole” or “universal”), but rather than have a set coverage term these policies have a cash value that can build up over time and sustain the policy until the insured eventually passes away. As a rough comparison, a permanent policy is like buying a car – the owner makes payments and builds up equity in the car, which the owner can sell or just keep driving.
To collect on either a term or permanent life insurance policy, a claim must be filed. This will involve providing a death certificate, along with a completed claim form provided by the life insurance company. Claims are usually processed and then paid out, generally within a few months at most. But that is not always the case – sometimes the life insurance company denies the claim.
Why would a life insurance company deny my claim?
Life insurance companies are in the business of making money, so they will choose not to pay out on claims whenever possible. Remember that life insurance policies are written by life insurance companies and can be difficult to interpret – not surprisingly, the devil is always (purposefully) in the details. For example, a life insurance policy is a contract just like a contract to buy or sell a home or business, but unlike most other types of contracts, you may have noticed that you are not allowed to change any of the wording of a life insurance policy.
There are thus several built-in grounds for denying life insurance claims, which typically fall into a few main categories:
Premium Payment
This seems simple – if the policy premiums are not paid, the life insurance policy gets canceled, and any claim for death benefits is denied. But whether a term or permanent policy, there can be different kinds of mix-ups and misunderstandings. That is why an insurance company is required to give sufficient notice before a life insurance policy is canceled (which is not always the case). In addition, many permanent insurance policies have very complex formulas that rely on the calculation of flexible premiums, loans, cash buildup, and sometimes even stock market indexes (leading to life insurance companies making miscalculations on their own policies).
Exclusions
Life Insurance companies put various exclusions in their policies to deny coverage. Some of these exclusions may be out of the insured’s control, like being killed in a war. Other exclusions include voluntarily dangerous or illegal activities, so if the insured passed away base jumping or robbing a bank at gunpoint, you can expect that there will be some issues with any claims. That said, the life insurance company, on its own, will try to make the determination of whether there was something that could fit into its definition of an exclusion – and, again, the insurance company’s policy language deliberately builds in plenty of wiggle room.
Life Insurance Application
Life insurance companies will comb through a policy application to find anything that was not totally accurate or not mentioned at all. For example, if it turns out that, contrary to what was listed on the application, the insured was a heavy smoker, had a severe heart condition, or was a professional daredevil, you can expect that there will be some issues with any claims. Here too, there can be self-serving gray areas of what the insurance company chooses to consider a misrepresentation or omission, and whether either is material.
Contestable Period
There is usually an initial time period where the life insurance company does not have to pay any claim, or where (like a probationary period for a job) the life insurance company is given a very wide latitude to use the above grounds along with whole host of different excuses not to honor a claim. For example, if an insured were determined to have passed away by suicide within 2 years of the start of the policy, most life insurance companies would deny that claim. As always, since the life insurance company believes that it holds all of the cards during the contestable period, any ambiguous circumstances or policy language can, and will, be used to deny a claim.
What do I do if my life insurance claim is denied? Do I Need A Denied Life Insurance Claim Lawyer
Having a life insurance claim denied can be daunting, especially considering the traumatic and likely hectic situation that caused you to file the claim. There is also a large insurance company on the other side whose reasons for denial usually boil down to some form of “because we said so.” Try not to feel overwhelmed, there is help available. The life insurance company has acted in its best interests, now you have to make the choices that are best for you. Do your research and consult an experienced law firm to be on your side and guide you through this process. Most importantly, do not delay, as all claims have applicable limitations periods.
Toy Story: Insurance Lessons from Mattel Defect Case
A Delaware court recently held in Mattel, Inc. and Fisher Price, Inc. v. XL Insurance America, Inc., et al., that a series of product liability claims dating back to 2013 constituted a single “occurrence” under the toy manufacturer’s and distributor’s commercial general liability (CGL) policies.
The case stemmed from Mattel’s request for defense and indemnity coverage in response to claims that certain toys caused bodily injuries to infants. The CGL coverage tower, which included policies issued by multiple primary, excess, and umbrella insurers, spanned from 2011 to 2020.
The primary policies defined “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” They also included a Lot or Batch Clause Endorsement with a “Deemer Clause,” which deemed all injuries arising from a single “lot” of products as occurring whenever the injury in the first filed claim occurred. Under the endorsement, a “lot” was defined as “two or more discrete units of the same or substantially similar good or product” that shared a common harmful condition, defect, error or suspected deficiency.
The umbrella policies used a similar definition of “occurrence” and included an Occurrence Amendatory Endorsement. This endorsement aggregated distinct claims arising from the same alleged defect or hazard in substantially similar products into a single “occurrence.” However, unlike the Lot or Batch Clause Endorsement, the Occurrence Amendatory Endorsement did not include a “Deemer Clause.”
The toy manufacturer, along with one of its primary insurers, contended that the product liability claims should all be treated as a single “occurrence.” In contrast, another insurer in the coverage tower argued that the issue was premature, asserting that the court first needed to determine the proximate causation of the alleged injuries before addressing the number of “occurrences.”
The Delaware court ultimately held that the claims constituted a single “occurrence” under the applicable policies. It permitted allocation of the claims based on the year in which the injuries occurred. The court found that the claims arose from “the same or substantially the same ‘hazard’: the defective design of the [manufacturer’s] products, including the incline angle, posed a hazard to the health of infants.” It emphasized that the products were part of the same product line and shared common hazards, satisfying the policy’s definition of a single “occurrence.”
With respect to allocation, the court held that coverage under the excess and umbrella policies could only be triggered by a bodily injury that actually occurred during a particular policy’s year. Significantly, the Occurrence Amendatory Endorsement in the excess and umbrella policies did not contain a “Deemer Clause”—unlike the Lot or Batch Clause Endorsement in the primary policies—which would have treated all injuries arising from a single “lot” of products as occurring at the time of the first claimed injury. As a result, the court concluded that the claims must be allocated to the policy in effect at the time each individual bodily injury occurred, rather than being grouped under a single policy year.
This decision underscores the critical importance of carefully reviewing the definition of “occurrence” in liability policies, including any endorsements that modify or clarify its application. Given that the number and timing of occurrences often plays a central role in the availability and extent of coverage, policyholders should consult experienced coverage counsel to help interpret policy language and ensure they maximize potential recovery under all applicable layers of insurance.
Have You Done Your Part to Comply with Part 2 Changes?
Important changes are coming to 42 CFR Part 2 (Part 2), which deals with the confidentiality of patients’ substance use disorder (SUD) records. On April 16, 2024, the US Department of Health and Human Services (HHS) published a new final rule to update Part 2 (New Rule) in an effort to align the requirements of Part 2 with those found in the Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health Act (HITECH).
Part 2 will now allow patients to sign a single consent for future uses and disclosures of Part 2 records, as opposed to patients previously having to sign individualized consents prior to each disclosure. Following such consent from the patient, a HIPAA-regulated recipient of the Part 2 records may further use and disclose those records as permitted under HIPAA, except for civil, criminal, administrative or legislative proceedings against the individual who is the subject of the Part 2 records. Additionally, breaches of Part 2 information now must be addressed in the same manner as other breaches involving unsecured protected health information (for instance, by requiring certain notifications be made within no more than 60 calendar days from the discovery of the breach). Finally, civil penalties for violations of Part 2 have been added, thus making the penalties consistent with those available under HIPAA. Any entities or providers who are subject to Part 2 must comply with the New Rule by February 16, 2026, or risk incurring significant penalties under the new Part 2 regime.
One of the most notable changes under the New Rule is that Part 2 violation penalties and HIPAA violation penalties are now aligned. Previously, Part 2 violations were only subject to criminal penalties. The disciplinary framework under the New Rule allows for both civil and criminal penalties for a Part 2 violation. On the civil side, penalty fines can be up to $1.5 million per calendar year, depending on the severity of the violation. On the criminal side, penalty fines can be up to $250,000, with imprisonment from one to 10 years, depending on the severity of the violation.
Given the significant changes to Part 2 and the approaching date for compliance, entities and providers subject to Part 2 should, at a minimum, review and update their materials and procedures related to:
Patient consent;
Disclosure of patient information;
Medical records/documentation;
Patient rights;
Breach notification;
Patient notices (i.e., Notice of Privacy Practices); and
Data storage and segregation.
Some next steps are purely internal but will require collaboration to ensure that the technical and administrative aspects align. Other steps are patient-facing and will require updates to documentation, combined with operationalizing communications to patients. In addition, internal training materials should be updated to account for the various Part 2 changes, and staff should be educated about the updated requirements and the severity of consequences that could result from willful or inadvertent non-compliance.
The New Rule’s updated penalties represent a distinct shift towards stricter and more punitive enforcement regarding the confidentiality of SUD records and compliance with Part 2 generally. Entities and providers subject to Part 2 should begin reviewing and revising their policies and procedures now to ensure compliance with the New Rule by 2026 in light of the expected more punitive enforcement landscape.
Ethylene Oxide Litigation: Your Company Has Been Sued- Now What?
Ethylene Oxide (EtO) is an industrial solvent widely used as a sterilizing agent for medical and other equipment that cannot otherwise be sterilized by heat/steam. EtO may also be used as a component for producing other chemicals, including glycol and polyglycol ethers, emulsifiers, detergents, and solvents. Allegations that exposure to EtO increases the risk of certain cancers has led to governmental regulation as well as private tort actions against companies that operate sterilization facilities that utilize EtO.
History of EtO Verdicts
There have now been a handful of verdicts in EtO trials and the results have been a mixed bag. We have seen some defense verdicts, but also some multimillion-dollar plaintiff verdicts. As we discussed in a posting last week, the most recent example of the latter was a plaintiff verdict for $20 million handed down last earlier this month in Georgia (punitive damages are still being determined).
The first ethylene oxide case to go to trial was the Kamuda matter, in which an Illinois jury awarded $263 million in September of 2022 against Sterigenics for ethylene oxide exposure from that company’s Willowbrook facility. A subsequent trial in the same jurisdiction against the same defendant resulted in a defense verdict. Ultimately, Sterigenics resolved its pending claims involving the Willowbrook plant in the amount of $408 million. In December of 2024, a Philadelphia Court of Common Pleas jury found the defendant B. Braun Manufacturing Inc. not liable on all counts. The plaintiff had alleged that her husband developed leukemia as a result of working at the defendant’s sterilization plant in Allentown, Pennsylvania for seven years. Notably, unlike the Illinois trials, the Philadelphia trial involved an employee at the sterilization facility as opposed to the Illinois plaintiffs who did not work at the Willowbrook plant but resided nearby.
In March of this year, a Colorado jury rendered a verdict in favor of defendant Terumo BCT Inc. (Isaacks et al. v. Terumo BCT Sterilization Services Inc. et al. in the First Judicial District of Colorado (docket number 2022CV031124). The plaintiffs are appealing. This was a bellwether trial lasting six weeks, and involved four female plaintiffs. The jury determined that the defendant was not negligent in its handling of emissions from its Lakewood plant. The plaintiffs had sought $217 million in damages for their alleged physical impairment and also $7.5 million for past and future medical expenses as well as punitive damages. In light of the fact that the six person jury found the defendant Terumo not negligent, it did not need to consider damages or causation. All of the plaintiffs alleged that they had developed cancer as a result of ethylene oxide emissions from the Terumo facility. One plaintiff alleged breast cancer as a result of 23 years of exposure from the plant, while another alleged breast cancer after almost 35 years of exposure (these two plaintiffs were neighbors). Another plaintiff alleged multiple myeloma while the fourth plaintiff alleged Hodgkin’s lymphoma. Notably, there remain hundreds more pending claims against Terumo in Colorado. In fact, plaintiffs’ counsel filed almost 25 more cases while the trial was in progress
Does Your Insurance Cover EtO Claims?
In light of multi million dollar verdicts in Illinois and Georgia, companies with potential EtO liability should determine if they have adequate coverage for defense and indemnity should they be sued. KCIC recently issued a report on insurance coverage for EtO claims: (kcic.com/trending/feed/eto-an-emerging-and-evolving-risk/#msdynttrid=wne5D5mhUe8x_gvUuI0Hn9FqKuJPpR3wOfwvnUj8MyE). As the article points out, companies facing EtO claims may be able to tap their pollution liability policies or pollution coverage as part of their commercial general liability (CGL) policies. As KCIC notes, one option for companies is to cite to their “permitted emissions” exception which stems from the 1997 Illinois Supreme Court decision in American States Insurance Co. v. Koloms in which the court noted that if the pollution exclusion was too literally interpreted, it could have such limitless applications that it could essentially negate all coverage.
Therefore, Koloms concluded that pollution exclusions be limited to traditional environmental contamination — which includes industrial emissions of pollutants into the environment. In 2011, in Erie Ins. Exch. v. Imperial Marble Corp, the Illinois appellate court cited the Koloms case and found that when the industrial emissions were at levels that were within regulatory permissions, the pollution exclusions are arguably ambiguous and should not negate the duty to defend. The theory was that emissions authorized by law may not constitute traditional environmental pollution, and therefore the court found that the insurer had a duty to defend against claims that arose from permitted emissions. In contrast, though, a recent decision in the federal district in Pennsylvania determined that a pollution exclusion in a CGL policy barred coverage for EtO liabilities under Pennsylvania law (for more detail refer to the KCIC report).
So, Will Your Insurer Cover Your EtO Claims?
Well, maybe. This depends on what state’s law controls as well as the language of your policy. If you have existing policies, it is advisable to have them reviewed to determine if there is coverage for EtO claims. Consultation with your broker is advisable. To the extent you will be in the market for new coverage in the near future and you think it possible your company might face EtO claims, discuss this with your broker to make sure that you will be covered. In light of the recent Georgia verdict, coupled with the Illinois verdict from a few years ago, the EtO litigation seems poised to expand to other states. Be prepared.
2nd Circuit Holds Arbitration Treaty Trumps State Insurance Law
On May 8, the Second Circuit held that the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards trumps a Louisiana state law barring arbitration of insurance disputes in a pair of cases, Certain Underwriters at Lloyds, London et al. v. 3131 Veterans Blvd. LLC and Certain Underwriters at Lloyds, London et al. v. Mpire Properties LLC. In doing so the Second Circuit joined the First and Ninth circuits in ruling that the New York Convention’s provision on the enforcement of arbitration agreements is “self-executing” and, thus, preempts state law consistent with the Supreme Court’s decision in Medellín v. Texas.
The underlying dispute involved damage to commercial properties in Louisiana after Hurricane Ida hit the state in 2021. The insurance policies at issue provided for arbitration seated in New York applying New York law. After settlement discussions failed, the insureds filed suit in Louisiana, while the insurers moved to compel arbitration in the Southern District of New York.
Louisiana’s Insurance Code and subsequent jurisprudence bars enforcement of arbitration clauses in insurance policies. The Federal McCarran-Ferguson Act says that state insurance law controls over conflicting “acts of Congress.” Prior to Medellín, the Second Circuit treated federal treaty law, such as the New York Convention, as “acts of Congress” only if it required legislative action to be enforced, i.e., it is not self-executing. Applying these pre-Medellín rules, the district court found that the New York Convention was not self-executing and that Louisiana’s bar on enforcement of arbitration in insurance disputes reverse-preempted the New York Convention and the Federal Arbitration Act, preventing arbitration of the underlying dispute.
However, in Medellín, the Supreme Court established a different test for determining whether a treaty provision should be considered self-executing. “The Supreme Court did not confine its analysis to the narrow question of whether Congress enacted legislation purporting to implement the treaty at issue[.]” Rather the Court implemented a multi-factor test applying to individual provisions of the treaty to determine whether that provision was intended to take immediate effect in domestic courts.
Applying the Medellín factors to the relevant New York Convention provision, the Second Circuit found that Article II, Section 3 of the Convention – the provision related to the enforcement of arbitration agreements – is self-executing and not subject to statutory preemption rules like that in the McCarran-Ferguson Act.
This Court’s holding does not extend to purely domestic arbitrations, but parties to arbitration agreements with a foreign element can no longer escape arbitration of commercial disputes on statutory preemption grounds.
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Affirmative Artificial Intelligence Insurance Coverages Emerge
It was only a matter of time before new insurance coverages targeting the risks posed by artificial intelligence (AI) would hit the market. That time is now.
As the use of AI continues to proliferate, so too does our understanding of the risks presented by this broad and powerful technology. Some risks appear novel in form while others mirror traditional exposures that have long been viewed as insurable causes of loss. AI-related risks are made all the more novel because the meaning of AI itself is not only up for debate, but is constantly evolving as the technology matures. This mixture of old and new has the potential to create coverage gaps in even the most comprehensive insurance programs. Hence the development of specialized, AI-specific insurance solutions. In just the past few weeks, two new affirmative AI coverages have entered the market, signaling an acceleration in this trend.
Armilla’s Affirmative AI Coverage
On April 30, 2025, Armilla Insurance Services launched an AI liability insurance policy underwritten by certain underwriters at Lloyd’s, including Chaucer Group. This product is among the first to offer clear, affirmative coverage for AI-related risks, rather than relying on protections embedded in legacy policies.
While the introduction of this new, affirmative coverage should have no impact on the availability of coverage for AI-related losses that meet the terms of coverage under existing insurance policies such as cyber, directors and officers (D&O), or technology errors and omissions (E&O), this new product should address any unique exposures not contemplated under traditional coverages. Risks specifically contemplated under Armilla’s policy include AI hallucinations, deteriorating AI model performance, and mechanical failures or deviations from expected behavior. Armilla’s affirmative coverage may offer greater certainty for policyholders in an increasingly uncertain risk environment.
Google Cloud’s Entry into AI Risk Management
Earlier in 2025, Google took its own significant step into AI-specific risk mitigation by announcing a partnership with insurers Beazley, Chubb, and Munich Re. This collaboration introduces a tailored cyber insurance solution specifically designed to provide affirmative AI coverage that Google Cloud customers can purchase from the insurers Google has partnered with.
Customers that purchase the Google-specific insurance coverage receive a Google policy Endorsement that provides a suite of protections that can include business interruption coverage for failures in Google Cloud services, liability coverage for certain bodily injury or property damage, and protection for trade secret losses linked to malfunctioning AI tools. By embedding insurance directly into its cloud offerings, Google has taken a proactive role in delivering technological innovation, while also managing the associated risks.
Insuring the AI Future
The emergence of affirmative AI insurance products marks a key shift in the industry’s approach to managing AI-driven risks. With companies like Armilla leading the charge, insurers are beginning to address perceived coverage gaps that traditional policies may overlook. As momentum builds, 2025 is likely to bring a continued rollout of AI-specific coverages tailored to this evolving landscape. Collectively, these developments reflect a growing recognition across the industry of the distinct and complex nature of AI-related risk.