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BT Policyholder Protection Blog
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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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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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08 Aug 2016 Insurance, Indemnification, and Limitation of Liability Provisions in Business Contracts

  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?   Allocation of Risk   Fundamentally, the purpose of insurance, indemnification, and limitation clauses is to allocate risks. In general, insurance transfers risk from the contracting parties to a third party—an insurance company. Indemnification usually transfers risk between the parties to the contract. Limitation of liability prevents or limits the transfer of risk between the parties.   With those basic concepts in mind, think about the risks that arise out or relate to the contract. Take the time to imagine nightmare scenarios as well as other events…

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20 May 2016 New York Lets Policyholder Choose Which Insurers Must Pay “All Sums” for Claims Spanning Many Years

Businesses facing asbestos or environmental claims may be encouraged by a decision from New York’s highest court earlier this month. This new decision allows the policyholder to choose which of many policy periods should initially be responsible for the policyholder’s asbestos litigation, work its way up that particular coverage tower and then select another period and another as may be necessary. See In re Viking Pump, Inc. and Warren Pumps, LLC, Insurance Appeals, No. 59 (NY May 3, 2016). The policyholder does not have to prorate its claims equally among its many years of possible coverage. Id.   The problem is all too familiar   Your company may already be in a similar situation. If not, imagine your company faces numerous lawsuits by individuals alleging…

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03 Mar 2016 Sing The Jingle: Four Tips Inspired By Insurance Ads

  Advertisements for auto and homeowners insurance have become ubiquitous, and their humor often ranges from irritating to clever. You can probably hear one in your head right now. That humor is apparently intended to be the spoonful of sugar to help the medicine go down; valuable messages about insurance are sometimes conveyed subtly but effectively. As an insurance coverage lawyer, also known as a geek, I see how some of that information also can be useful in the business insurance context.   Double Check Your Coverage Before and After You Buy   Fifteen minutes may save you 15 percent (or more). Make sure you’re actually covered for “this” rather than “this.” The point is that your insurance program needs your time and attention. When…

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16 Nov 2015 2.4 Million Reasons to Monitor Claim Costs: Five Lessons From a Barnes & Thornburg Victory

Employers should regularly and carefully monitor the cost of claims even if those claims are handled by a major insurance company or third-party administrator. That is the key takeaway from the Nov. 10, 2015, decision by the U.S. Court of Appeals for the 11th Circuit and the earlier decision by a federal magistrate who presided over a bench trial and awarded $2.4 million to our client Georgia Operators Self Insurers Fund (Georgia Fund) for claims mishandling by its third-party administrator PMA Management Corp. That and other lessons are explained below.   Lesson #1: Monitor Claim Costs and Claim Handling   The Georgia Fund is a not-for-profit entity formed by most McDonald’s franchise owners in Georgia so they can self-insure their workers compensation risks. From 2008…

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15 Jul 2015 Five Tips: Insurance Fundamentals for In-House Counsel

Many of our posts address specific issues for risk managers and in-house attorneys with insurance coverage experience. Recognizing that some in-house lawyers are relatively new to the insurance world, we thought some may appreciate a summary of some of the fundamental issues in insurance coverage. Today, we offer five sets of distinctions between related concepts at the heart of many insurance matters:   First-Party vs. Third-Party Coverage   First-party coverage pays you for loss or damage to your own property. For example, if your plant suffers a fire, you may want to make a claim under the property policy for damage to the building, equipment and machinery. The same policy may include business interruption coverage that can replace some of the profits lost while the…

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01 May 2015 Policyholder Rights Under Seige in Illinois

A bill pending in the Illinois Senate threatens to undermine if not overturn two fundamental rights of policyholders under a policy with the duty to defend: (1) the right to a complete defense of an entire claim insured if any allegation is actually or potentially covered and (2) the right to independent counsel if there is a conflict of interest between the insurance company that pays for the defense and the policyholder being defended. Both of these rights have been established for decades by courts in Illinois and virtually every other state. See, e.g., Maryland Casualty Co. v. Peppers, 64 Ill.2d 187, 197-98, 355 N.E. 2d 24 (Ill. 1976). Illinois Senate Bill 1296 threatens to turn these bedrock principles into quicksand.   First, the bill…

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15 Apr 2015 Ken Gorenberg to speak at Chicago Bar Association seminar, “Insurance and Risk Management for Corporate Transactions”

Ken Gorenberg, from Barnes & Thornburg’s Policyholder Insurance Recovery Group, will be speaking at an upcoming Chicago Bar Association seminar, “Insurance and Risk Management for Corporate Transactions,” on Wednesday, May 27, 2015, 3 – 6 p.m. CDT.   The goal of the seminar is to provide in-house, corporate and litigation attorneys with a primer on the major insurance issues related to corporate transactions. Attendees can receive 2.75 hours of Illinois MCLE credit.   Ken will be presenting on “Analyzing Risk Transfer in Corporate Contracts,” and will be speaking about insurance, indemnity and limitation of liability clauses, all of which are used to allocate risk.   For more information, click here. Kenneth GorenbergKenneth M. Gorenberg is a partner in the Chicago office of Barnes & Thornburg…

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26 Mar 2015 Ken Gorenberg and Leslie Weiss to speak at upcoming Strafford live webinar A 90-minute CLE webinar with interactive Q&A

Two Barnes & Thornburg partners, Ken Gorenberg from the Policyholder Insurance Recovery Group and Leslie Weiss from the Corporate Department, will be speaking at a Strafford live webinar, “Drafting Enforceable Limitation of Liability Clauses in Business Contracts,” on Tuesday, April 14, from 1 – 2:30 p.m. EDT.   Ken and Leslie will be members of a panel that will provide guidance to business counsel for drafting and negotiating enforceable limitation of liability clauses in business contracts. This is an encore presentation with live Q&A.   The panel will review key issues such as: What considerations should business counsel take into account when drafting and negotiating limitation of liability provisions in contracts? What enforceability challenges do parties commonly face when seeking to invoke a limitation of…

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