Insurers and corporate policyholders are increasingly turning to litigation to resolve disputes over coverage for alleged misrepresentations in M&A deals. Haynes Boone Partner Carrie DiCanio shared insights with Bloomberg Law on the limited number of cases addressing the merits of reps and warranties coverage disputes and the significance of a New York court decision involving ambiguous policy language.
Read an excerpt below.
In another case, a New York state court in 2020 denied a Chubb Ltd. unit’s efforts to partially shed a suit brought by Novolex Holdings LLC under a second-tier excess policy that included a “materiality scrape” provision expanding the scope of its reps and warranties coverage. The parties settled last year.
The New York court’s decision relied on the principles of insurance policy language that was at minimum ambiguous, said Carrie DiCanio, a Haynes Boone partner in the Insurance Recovery Practice Group. That was the only case she’s seen that has looked at policy language in that way, DiCanio said.
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The policies tend to have three-to-four-year periods, unlike the standard one year found in traditional coverage lines, meaning policyholders can file claims for alleged breaches over a longer time frame, DiCanio said.
Read the full article from Bloomberg Law here.
