Photo of Mary McCutcheon

Mary represents policyholders in insurance coverage disputes arising out of: securities investigations, class actions and derivative actions, venture capital and private equity litigation, intellectual property and technology errors and omissions lawsuits, highly sensitive employment claims, mass casualty personal injury actions and construction defect claims. She also represents companies in business interruption and property damage claims arising out of natural disasters such as earthquakes and fires. Mary is known for the placement of directors' and officers' liability, management liability and financial services liability insurance and related indemnification issues and handling claims under those policies. She is a founding member of the American College of Coverage Counsel.

In Verizon Communications Inc. v. National Union Fire Insurance Co. of Pittsburgh, Pa.[1] the Delaware Superior Court ruled that Verizon was entitled to a defense under its D&O policy for fraudulent transfer claims. Although the decision relies on unique facts and specific policy language, it provides guidance on how to exploit minor but critical differences in policy language to expand the company’s coverage beyond claims involving securities fraud.

The opinion also rejected the insurers’ efforts to limit coverage under a separate policy, based on their contention that the subsidiary out of which the liabilities arose was not a subsidiary when the policy was purchased. And finally, it handed policyholders a practical and valuable gift of universal application, holding that an insurer who wrongfully refuses to defend a claim cannot contest the reasonableness of the fees incurred by the policyholder to defend the case.

Whether or not it is successfully challenged on appeal, the Verizon decision is an important reminder not to make assumptions as to what is or isn’t covered under any type of insurance policy. Coverage depends on the particular language of the policy under review and the particular facts for which claims are sought.
Continue Reading In Verizon Decision Careful Review of Insurance Policies Expands Coverage

Two phrases combined in a single exclusion—“alleging, arising out of, based upon or attributable to any violation of any law…” and “as respects… unfair trade practices” could inspire carriers to make trouble for policyholders seeking coverage for consumer protection claims. Fortunately, a recent federal decision recognizes that California rules of policy construction limit the scope of this exclusion, in line with a policyholder’s reasonable expectations of coverage.
Continue Reading “Unfair Trade Practices” Exclusion Does Not Extend to Consumer Protection Claims

Over the last few weeks we have seen a number of informative articles discussing the crucial issue of coverage for business interruption claims arising out of government shutdowns of businesses to inhibit the spread of COVID-19, here. As the economic disruption from these efforts continues, however, we are likely to see impacts in the Directors & Officers Liability market – not only from claims that trigger D&O policies, but also additional challenges in placements and renewals of D&O programs.
Continue Reading Directors & Officers Liability Issues and the Coronavirus: Is That a “Thing”?

Tyler Gerking was inducted as a Fellow of the American College of Coverage Counsel’s 7th Annual Meeting in Chicago, Illinois on May 9, 2019. Mary McCutcheon presided over the meeting as she completed her term as President of the College.

The American College of Coverage Counsel (ACCC), established in 2012, is the preeminent association of

On January 15, 2019, the Ninth Circuit certified the following question to the California Supreme Court:

Does a commercial liability policy that covers “personal injury,” defined as “injury… arising out of… [o]ral or written publication… of material that violates a person’s rights of privacy,” trigger the insurer’s duty to defend the insured against a claim that the insured violated the Telephone Consumer Protection Act by sending unsolicited text message advertisement that did not reveal any private information?
Yahoo! Inc. v. National Union Fire Insurance Company of Pittsburgh, Pa., No. 17-16452, D.C. No. 5:17-cv-0447-NC.

Yahoo! sought coverage under its general liability policies issued by National Union for a number of putative class actions alleging that it violated the TCPA by transmitting unsolicited text message advertisements to putative class members. National Union denied coverage and Yahoo! sued for breach of contract. The Northern District granted National Union’s motion to dismiss and Yahoo! appealed that order to the Ninth Circuit.Continue Reading Ninth Circuit Asks the California Supreme Court to Interpret the Scope of Personal Injury Coverage

I recently participated in a panel at the Association of Business Trial Lawyers Annual Meeting – “Bad News Delivered: The Board Meeting and Crisis Management.”  Among other topics, the panel discussed the role of insurance counsel in crisis management, and addressed the following questions:

Who Is The Client? 

When meeting with a board in a time of crisis, it is critical to identify whether your client is the company or the board.  And if it is the company, the board must understand that while they are the decision-makers for your client, they themselves are not your clients.

Depending on whom you represent, your advice and strategy may differ.  Although acting on behalf of the company and bound by fiduciary duties and the duty of loyalty, in a time of crisis board members may be concerned about how the company’s insurance can be used to protect their interests, as opposed to the company’s.  If counsel is representing the company, the strategy may focus on preserving the coverage to settle a nasty case, fund burdensome defense or investigation costs, or protect individuals who are critical to the company’s on-going business strategies.  And if the company is in bankruptcy, the debtor in possession or trustee may want to preserve the assets for claims against the estate, as opposed to lower priority indemnity claims or non-indemnifiable claims against individual insureds such as board members.

If counsel is representing an individual, he or she may have the luxury of an indemnification from the company – assuming the company is able to fulfill it.  If not, counsel may need to invoke Side A or other provisions in the policy to preserve the policy limits for the individual directors or officers, and access to much-needed defense costs.
Continue Reading Insurance in a Time of Crisis: Role of Insurance Counsel in Crisis Management

I recently participated in a negotiation with an insurer who had denied coverage for an underlying errors and omissions claim in the mid-seven figures. The insurer’s counsel and I exchanged stern letters, each explaining why our respective client’s position was absolutely correct, and the other’s absolutely wrong. The client’s broker arranged a meeting with principals and counsel on both sides. At the meeting, the insurer’s counsel and I debated our respective positions once more. Neither of us conceded any possibility that the other could be right. After 25 minutes, my client put a stop to the debate competition and, aided by the broker, moved into negotiations with the insurer’s principal.

The opening offer and demand were miles apart. But within an hour, the case settled, to the clear satisfaction of both sides. With no mediator. No wrangling about which mediator to select. No waiting three months to get a date on the mediator’s calendar. No mediation briefs or reply briefs. No waste of non-refundable mediator’s fees. No shuttle diplomacy, bracketing or mediator’s proposals. No mediator reserving jurisdiction to hammer out disputed settlement terms. It felt almost too easy.

Are lawyers too dependent on mediators to settle their cases? Whether you answer that question yes or no, there are many situations where a neutral can resolve a case where party negotiations would fail. This is particularly true in a “three-way” mediation, where the defendant’s insurer is participating but is reserving rights, denying coverage, or rejecting defense counsel’s settlement recommendations. These mediations present unique challenges that require a skilled mediator and savvy defense and coverage counsel.
Continue Reading A Policyholder Perspective on the Unique Challenges of a Three-Way Mediation

Farella’s Insurance Recovery Group lawyers regularly collaborate with and learn from different players and functions within the insurance industry. To provide more value to our readers, we have reached out to a series of insurance brokers to create the Insurance Broker Series Q&A.

Our latest installment is with Michael Ferraro, Partner & Senior Vice President with Woodruff-Sawyer & Co. 
Continue Reading Insurance Broker Series: Michael Ferraro, Woodruff-Sawyer & Co.

Farella’s Insurance Recovery Group lawyers regularly collaborate with and learn from different players and functions within the insurance industry. To provide more value to our readers, we have reached out to a series of insurance brokers to create the Insurance Broker Series Q&A.

Our latest installment is with Clark Morton, Partner & Senior Vice President with Woodruff-Sawyer & Co. 
Continue Reading Insurance Broker Series: Clark Morton, Woodruff-Sawyer & Co.

Farella’s Insurance Recovery Group lawyers regularly collaborate with and learn from different players and functions within the insurance industry. To provide more value to our readers, we have reached out to a series of insurance brokers to create the Insurance Broker Series Q&A.

Our latest installment is with Manpreet Gill, Managing Director, Communications, Media & Technology Practice Leader, Western Region with Marsh
Continue Reading Insurance Broker Series: Manpreet Gill, Marsh