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BT Policyholder Protection Blog
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25 May 2018 Minnesota Court of Appeals Confirms Agent Comments Can Bind Insurer

  In January 2017, a jury awarded Prospect Foundry $53,300 on a counterclaim for breach of the implied covenant of good faith and fair dealing. At the heart of the case was a representation by an insurance agent that certain workers’ compensation claims would be closed, or reserves reduced, allowing Prospect to receive a dividend on their workers’ compensation insurance premiums.   The insurer appealed, claiming in part that Prospect’s description of the representations of the agent should not have been permitted into evidence. In an April 16 decision, the Minnesota Court of Appeals affirmed in Western Nat’l Mut. Ins. Co. v. Prospect Foundry, A17-0992, 2018 WL 1787687 (Minn. Ct. App. April 16, 2018).  In relevant part, the court held:   In the past, Minnesota…

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24 May 2018 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues – Part 2

This article is the second part in the series, The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues. It was prepared in connection with PLI’s Cloud Computing conference. It was authored by Barnes & Thornburg attorneys, Scott Godes, Kara Cleary, Heidi Fessler and Michael Baumert.   Insurance Coverage Issues for the Cloud   In addition to the insurance best practices mentioned above, the cloud can raise multiple insurance issues that should be considered carefully.  For example, how would insurance provide coverage to the cloud provider or the user if there were a data breach or denial of service attack?  But, there are other events in the cyberspace that both cloud providers and users should consider, such as the situation where users cannot access the cloud…

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24 May 2018 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues – Part 1

This article was prepared in connection with PLI’s Cloud Computing conference. It was authored by Barnes & Thornburg attorneys, Scott Godes, Kara Cleary, Heidi Fessler and Michael Baumert.   The reality that business data of all kinds is now stored, managed, accessed and maintained in the cloud is inescapable.  The reasons for this migration of data from within an organization’s network computing system to a vended cloud provider are infinitely varied.   Whatever the reason fueling the migration of data, one thing is certain – coupled with the movement of data and the use of cloud services is the introduction of additional risk.  It’s true that many companies will actually improve the security of their data by shifting to the cloud.  In many cases, companies…

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17 May 2018 Upcoming Webinar: Insurance Coverage for Opioid Litigation and Lessons for Other Types of Claims

  The number of lawsuits involving opioid pharmaceuticals continues to skyrocket. Hundreds of cases have been filed nationwide, many of which have been consolidated into multidistrict litigation, and the trend shows no signs of stopping soon. Related litigation over the scope of insurance coverage available for these lawsuits also continues to increase, and courts have begun to issue decisions addressing insurers’ coverage obligations. Other coverage disputes are just beginning to wind their way through the courts. This webinar will focus on insurance coverage for opioid litigation, including:   What types of policies might provide coverage for opioid claims The most commonly disputed or litigated coverage issues The current landscape of judicial decisions regarding coverage for opioid litigation What the future may hold for opioid coverage…

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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

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

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

  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

  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

  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

  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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