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BT Policyholder Protection Blog
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12 Jun 2017 Timing is Everything: E&O Policy Exclusions

  Imagine this: Your company runs a call center that takes incoming calls from customers of a nationwide corporation. Two years ago, a customer wrote a letter to your legal department stating that his call had been recorded without his knowledge or consent in violation of state law and demanding the payment of damages to resolve the matter. Your company made a small nuisance payment to the customer, but did not report this claim under the errors and omissions (E&O) policy in effect at the time.   This year, your legal department was served with a class action lawsuit alleging the company violated the laws of a number of states by not advising customers that their calls were being recorded. Your company’s E&O carrier denied…

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06 Jun 2017 What Do You Expect Your Insurance Broker to Be: Intermediary or Fiduciary?

  As many companies are reaching their insurance policy renewal date, your company might have questions about the role of your insurance broker. Your company should expect its insurance broker to be a valued intermediary between your company and its insurer, who helps get claims paid. The broker’s role is to build and maintain relationships with carriers so your company gets the best available policies, and to persuade them to pay covered claims even when (and perhaps especially when) there is a reasonable dispute over coverage.   The right broker leverages these relationships for your company’s benefit and is able to elevate a coverage dispute to the insurer’s management. The right broker is able and willing to ask a carrier to accommodate the policyholder in…

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02 Jun 2017 Why Indemnification Provisions are Important

  In entering into contracts almost every day, businesses of all sizes and in all industries frequently flip right past the indemnification, insurance and limitation of liability provisions as mere boilerplate. These risk allocation provisions can be as important as price and other deal terms, yet many lawyers and contract managers don’t understand the pitfalls and opportunities they present.   If your job includes reviewing, drafting or negotiating contracts, you’ve probably seen these provisions. Are they boilerplate that you spend little time on? Do you fully understand exactly what they do? Do you negotiate or revise them? Read more here.   If you would like more information on indemnity clauses, Ken is presenting the following webinars:   Indemnification Provisions: When and How to Use Them…

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30 May 2017 Check Your Policy When an Insurer Says a Self-Insured Retention Applies to Its Duty to Defend

  Has your insurer informed you that, notwithstanding its duty to defend you under a third-party liability policy, it won’t start defending until and unless you satisfy a self-insured retention of a specified amount?   Don’t necessarily believe it. In fact, California law is clear that absent an expressly written policy provision stating that no duty to defend arises until and unless an insured meets a self-insured retention, satisfaction of such retention is not a condition precedent to an insurer’s duty to defend.  Indeed, as California courts have said, “in the absence of clear policy language so providing, to require the exhaustion of a self-insured retention before an insurer will have a duty to defend would be contrary to the reasonable expectations of the insured…

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05 May 2017 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues (Part 2)

  By Scott Godes, Kara Cleary and Heidi Fessler   In part two of this series, we continuing exploring the benefits, risks and insurance coverage issues associated with the cloud. Read part one here.   Insurance Coverage Issues for the Cloud   In addition to the insurance best practices mentioned in part one, 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 for data, applications, or other purposes and their business…

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03 May 2017 The Cloud: Selected Benefits, Risks, and Insurance Coverage Issues (Part 1)

  By Scott Godes, Kara Cleary and Heidi Fessler   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. In this two-part series, we will explore the benefits, risks and insurance coverage issues associated with the cloud.   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 are…

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24 Apr 2017 Keep Your Friends Close and Your Enemies Closer: Assigning Your Bad Faith Claim in Bet the Company Litigation

  Commercial general liability (CGL) insurance policies are popular in the marketplace, as they protect policyholders of every stripe from the ever-present risk of liability for bodily injury and property damage. Of at least equal importance is the insurance company’s duty to defend the policyholder, a clause for which is found in nearly every CGL policy. That is, the insurance company is obligated to supply and pay for the policyholder’s defense against lawsuits alleging such liability – at the insurance company’s sole expense outside of policy limits. In essence, the insurer’s duty to defend amounts to litigation insurance, in addition to liability insurance.   Without the resources of an insurance company to control the litigation and pay the defense bills, many policyholders would be unable…

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27 Mar 2017 Bad Faith Isn’t the Only Remedy Court Sanctions Insurance Company for Factually Incorrect Declaratory Judgment Complaint

  State laws vary considerably in the standards and remedies for bad faith by an insurance company and also on whether a policyholder can recover attorneys’ fees for an insurance coverage dispute in the absence of bad faith. A recent Illinois case is a reminder that court sanctions can be another remedy for an insurer’s misconduct in coverage litigation.   In American Access Cas. Co. v. Alcauter, 2017 IL App (1st) 160775, the insurance company filed a declaratory judgment complaint against its policyholder, Alcauter, seeking to avoid coverage for a $10,000 judgment in an auto accident case because Alcauter breached his duty of cooperation by failing to attend the hearing in the accident case against him. In Illinois, the underlying plaintiff is often considered a…

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22 Mar 2017 Beyond the Basics: 10 Common Hurdles to Securing Coverage for Long-Tail Liabilities, Part 2

  This is the second part of a two-part article that explores 10 common issues that arise in pursuing coverage for long-tail liabilities. The first part, covering issues 1 through 5, can be found here. Today, we tackle issues 6 through 10.   6. The “Known Loss” Doctrine. The basic premise of insurance is that it protects against the risk that a policyholder may suffer an unknown loss in the future; it does not protect against losses the policyholder already knows about before purchasing the policy. The classic illustration is that you cannot purchase fire insurance for a building the day after it burns to the ground. (Of course, there are exceptions to every rule, with the most famous being the fact that owners of…

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21 Mar 2017 Beyond the Basics: 10 Common Hurdles to Securing Coverage for Long-Tail Liabilities, Part 1

  For companies pursuing insurance coverage for latent, slow-developing injuries such as toxic exposures or environmental contamination, the fundamental, big-picture questions are the same from case to case: Does a long-tail injury trigger historical general liability coverage? Do any exclusions preclude coverage? What conditions must the policyholder fulfill to secure coverage? These questions are likely to be top-of-mind for a company faced with toxic tort or environmental liabilities. However, long-tail insurance claims can raise a host of other issues that may trip up an unwary policyholder.   This two-part blog post explores 10 common hurdles to clear in securing coverage for long-tail liabilities. Today, we cover issues 1 through 5. Check in again tomorrow, when we will cover issues 6 through 10.   1. Choice…

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