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BT Policyholder Protection Blog
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16 Mar 2018 It’s Not Over Until It’s Over: An Insurer’s Continuing Duty To Defend After The Dismissal Of Covered Claims

Claims, Insurance, Insurance Coverage | Matthew O'Hanlon

Imagine this scenario: you are a California policyholder and have been sued in a lawsuit alleging one covered claim and multiple non-covered claims. Your insurer, applying California insurance law, thereafter recognizes both (1) its duty to defend subject to a reservation of rights and (2) your right to independent counsel based on the nature of the reservation of rights.  In the middle of the lawsuit, your defense attorney files a motion for summary adjudication that, when granted, leads to the dismissal of the one covered claim. Your insurer then threatens to stop funding the defense of the case, claiming that the dismissal of the covered claim has terminated its duty to defend. Is your insurer right under California law?   Not in our view. Both…

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15 Mar 2018 Before You Break Ground: Risk, Reward and What You Need to Know About A&E, Legal and Insurance

Risk Management | Charles Edwards

Barnes & Thornburg and the Associated Builders and Contractors, Inc. hosted “Before You Break Ground: Risk, Reward and What You Need to Know About A&E, Legal and Insurance” on March 7.   Discussion included: Understanding the risks covered and not covered in a commercial general liability policy, such as professional liability, liability assumed in a contract, and additional insured endorsements Controlled insurance programs The surety bond and the role it plays in getting a job started and getting a job finished, from the perspective of the job owner, the general contractor/construction manager, and the subcontractor/supplier Builder’s risk, soft cost, and expense to reduce the amount of loss distinctions Practical tips for submitting claims and maximizing recovery   If you would like access to the materials,…

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27 Feb 2018 The Tenth Circuit Hands Another Win to Policyholders Seeking to Insure Defective Workmanship By Their Subcontractors

Occurrence, Policy | John Corbett

  Your company, an engineering firm, is hired by an agent for coal-fired plants to serve as contractor on projects to build jet bubbling reactors, which eliminate contaminants from the plants’ exhaust.  Your company, in turn, subcontracts the engineering and construction of the reactors’ internal components to another firm.  After the contractor’s work is done, the plants discover that the components are defective, causing the reactors to deform, crack or even collapse.   The agent notifies your company of the problem and asserts that it is liable for the costs of repairing and replacing the defective components, an amount which will run well into the hundreds of millions of dollars.   Your company tenders the claim under its commercial general liability (“CGL”) policy, which says that…

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30 Jan 2018 Four More Things to Know About Certificates of Insurance

Insurance | Kenneth Gorenberg

  Having previously posted “Four Things to Know About Certificates of Insurance,” I’d like to offer four more best practices to consider.   Follow up for renewal certificates   A best practice is to have a Certificate of Insurance state the policy period for each policy it describes. If you need that coverage to continue beyond the stated policy period, another best practice is to follow up for a renewal certificate. Consider whether this could be added as a term in the contractual requirement for a Certificate of Insurance. For example, let’s say your company embarks on a major expansion of its facility, and the work is expected to take 18 months. Your company hires a general contractor, and your agreement with the contractor requires…

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25 Jan 2018 Avoid Insurance Related Risks to Help Your Bottom Line

Cyberinsurance, Insurance, Risk Management | Kara Cleary

  With the new year in full gear, your company likely has set revenue and growth goals for 2018. Unfortunately, just one uninsured or underinsured loss can often derail these efforts. Therefore, this is a great time for companies to review their insurance program and keep some of these best practices in mind:   First, check out Ken Gorenberg’s recent post that provides some great “New Year’s Resolutions for Policyholders.”   Consider reviewing your claims history over the last few years. Are there trends? Are there steps that might be available to your company to mitigate those particular risks? Moreover, how does your insurance program’s coverage limits align with those risks?   Does your company have procedures in place to determine when and how to…

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24 Jan 2018 Tell All: Making a Case for More Dialogue in the Insurance Application Process

Insurance | Christopher Lynch

  Do nothing secretly; for Time sees and hears all things, and discloses all. – Sophocles   Keeping secrets during the insurance application process is a bad idea. A policyholder who responds to application questions with incomplete or evasive answers to try to save a few dollars in premiums risks losing coverage altogether when those secrets are revealed. Conversely, by providing the underwriter with the information she needs to properly assess the risk, a policyholder is more likely to receive an insurance policy that meets its coverage needs. It behooves the parties to try to make the application process a cooperative exchange of information.   But even among well-intentioned parties, a potential for disconnect exists. Each side looks at the information exchange from a different…

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09 Jan 2018 New Year’s Resolutions for Policyholders

Insurance, Policy | Kenneth Gorenberg

  The champagne bottles are empty, the football games are over, and the kids are back in school. That can only mean one thing – it’s time for New Year’s resolutions! If you are having a hard time coming up with the perfect resolution for 2018, here are some ideas for policyholders.   “I resolve to review at least the declarations pages of all my policies.” Confirm that the insured’s name is legally accurate and spelled correctly and that its address is up to date. Make sure the policy isn’t about to expire without renewal or replacement, unless you’ve already decided you don’t need the coverage anymore. Check that the coverages you selected during the application or renewal process are included and that the limits…

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02 Jan 2018 Sold! Close Your M&A Deal Confidently by Funding Post-Closing Liabilities Through Insurance

D&O, Insurance | Carrie Raver

  When a company merges with another entity and becomes a single entity, or where a company is acquired by another organization, it is critical that both parties understand their insurance programs to ensure that transactional risks are properly covered. Companies sometimes do not give adequate consideration to the possibility of future claims following a merger or sale, and do not place into the deal a funding mechanism for post-closing claims.   This article offers some ideas to consider when planning an insurance solution to such claims as part of due diligence.   Tail policies cover actions taken before the closing   If you sit on the board of a company, the completion of an M&A deal does not insulate you from being sued for…

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26 Dec 2017 Payback: Can Settlements of False Claims Act Claims Be Covered Under D&O Policies?

D&O, Insurance | John Corbett

In recent years, corporations have seen a dramatic upswing in claims alleging violation of the federal False Claims Act (FCA). Dating from the Civil War, the FCA at one time was a sporadically used civil law that made government contractors liable for fraudulent claims on the government. After the law was reformed in the 1980s to make it easier for individuals to sue on behalf of the government, employees and shareholders of corporations transacting with the federal government began viewing it as a powerful whistleblower statute.   With the increase in lawsuits alleging violations of the FCA, insurance companies have become more aggressive in denying outright any obligation to pay settlements of FCA claims on the grounds that they seek uninsured restitution or disgorgement. Contrary…

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19 Dec 2017 Who Gets Coverage? Cyber Insurance and Credit Card Risks: Will Coverage Apply After the P.F. Chang’s Denial?

Cyberinsurance, Data Breach, Data Security, Insurance, Insurance Coverage | Scott Godes

Authored by Scott Godes & Devin Stone   When a retailer or merchant purchases a broad cyber insurance policy to cover hacks or breaches of its point of sale systems, it could be forgiven for thinking that its insurance policy would cover the costs of fraudulent charges and card replacement costs – which can represent the majority of damages generally incurred in a payment card incident – demanded by the payment processor or the card brands. But one recent decision in the Federal District Court of Arizona has held that certain cyber insurance policies do not provide coverage for those damages. P.F. Chang’s China Bistro, Inc. v. Federal Ins. Co., 2016 WL 3055111 (D. Ariz. May 31, 2016), appeal dismissed pursuant to settlement, No. 16-16141, Dkt….

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