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BT Policyholder Protection Blog
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15 Nov 2017 Tenth Circuit Holds that Governmental Investigation of Potential Criminal Violations is Not a ‘Claim’ Under a D&O Policy

  D&O insurance policies are key components of a corporation’s risk transfer portfolio, purchased to protect it against lawsuits presenting significant liability exposure to itself and its key officers and directors.   In recent years, as an alternative to targeted formal litigation and discovery in uncovering corporate wrongdoing, federal and state governments have increasingly utilized informal investigations. This trend has created an expensive new financial exposure in the business world, particularly for large corporations, which are often the targets of such inquiries, and corresponding questions about how D&O insurance policies cover such costs. Although many D&O policies have evolved to explicitly protect policyholders from the costs of responding to government investigations, many have not been amended, forcing courts to determine whether the existing language is…

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08 Sep 2017 Anti-Concurrent Causation Clauses: Why the Value of Your Property Coverage May Depend on Your State

A powerful storm pummels your city with high winds and heavy rains. After more than two days of intense wind and rain, the saturated hill behind your factory finally gives way and crashes into it. The building is severely damaged and your business operations are put on hold pending repairs. You need insurance money fast and file a claim with your property carrier.   Even though the policy doesn’t exclude property damage caused by wind or rain, it does contain an exclusion for earth movement “regardless of any other cause or event that contributes concurrently or in any sequence to the loss.” The carrier denies coverage because of the earth movement exclusion.  Is the carrier right? As it turns out, the answer may depend on…

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30 Aug 2017 Fast-Moving Texas Insurance Law Changes: Starting Sept. 1, New Insurance Law Limits What a Policyholder May Recover

  House Bill 1774, passed by the Texas legislature in May, becomes law on Sept. 1 – just as Texans begin to assess the damages wrought by Hurricane Harvey. This law amends the Texas Insurance Code in a number of important ways, especially regarding what a policyholder can recover when an insurer doesn’t promptly pay a claim.   The new law applies to claims (not lawsuits) made on or after Sept. 1. A Texas company that owns property damaged in this storm should consider submitting a claim by Aug. 31.   The new law makes these important changes:   Waiting period. Starting with claims made as of Sept. 1, a policyholder generally will have to wait 61 days after giving notice to the insurance company…

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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 Mar 2017 Overcoming That Sinking Feeling Beating Earth Movement Exclusions in CGL Policies

  Co-authored by John Corbett and Andy Detherage.   The recent rainstorms in California rightly have been hailed as the end of a lengthy drought.  The inches of rain which fell in the span of a week have filled reservoirs and raised the water table in the parched ground.  Such a large volume of water, however, increases the danger of landslides in California’s notoriously unconsolidated hillsides and bluffs, and with it, the possibility of disputes over whether particular ground movement claims are covered by their liability policies.   Let’s look at a hypothetical example.  XYZ Construction is laying pipes under an existing street at the top of a bluff.  In the course of digging trenches to hold the pipes, one of XYZ’s diggers accidentally breaks…

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