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BT Policyholder Protection Blog
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27 Jan 2017 Franchisors: Don’t Forget About Insurance for Joint Employer Liability Claims

  By Matthew B. Gruenberg and Matthew B. O’Hanlon   Separate and apart from creating a brand and an offering that consumers enjoy, franchisors face everyday issues such as complex schemes that restrict the terms and conditions under which they may sell franchises and conduct business.  In addition, under expanding concepts of joint employer liability, issues exist as to whether franchisors may potentially be sued for, among other things, employment-related claims brought by employees of franchisees.   To protect against such claims, a best practice for franchisors is to take reasonable precautions by not exerting authority or control over the franchisee’s employment practices. These precautions include taking care not to retain or assume a general right of control over factors such as hiring, direction, supervision,…

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30 Sep 2016 California Court of Appeal Determines that Excess Insurer May Sue Primary Insurer for Unreasonable Refusal to Settle

  Insureds often have excess liability insurance policies to cover losses that exceed the limits of underlying primary insurance policies. Issues often arise, however, where a primary insurer refuses to settle a case within the limits of the primary policy, thereby implicating the excess policy.   In Ace American Insurance Company v. Fireman’s Fund Insurance Company, the 2nd District of the California Court of Appeal addressed the issue of whether an excess insurer could pursue a primary insurer that initially refused to settle a case within the limits of the primary policy where the underlying case was resolved by settlement in excess of the primary policy limits as opposed to a judgment.  This led to a situation in which the settlement demand increased above the…

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19 Jul 2016 Don’t Forget About Pre-Judgment Interest on Wrongfully Withheld Policy Benefits

  Has your insurer informed you that belated payment of policy benefits somehow “cures” any prior delay and insulates the insurer from any further liability?   Don’t believe it. In fact, under California law a wide range of damages are potentially available for an insurer’s failure to timely pay an insurance claim under a bad faith theory. These include, among other things, consequential damages for the insurer’s tortious conduct – such as attorneys’ fees incurred in seeking the subject policy benefits – and punitive damages upon a proper showing.   Bad faith damages, however, do not constitute the sole remaining policyholder remedy for wrongfully withheld policy benefits.  Indeed, insureds often forget that pre-judgment interest is available in instances where the benefits sought are capable of…

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11 Sep 2015 LANDMARK CALIFORNIA SUPREME COURT DECISION EXPANDS CIRCUMSTANCES UNDER WHICH POLICYHOLDERS MAY ASSIGN POLICY RIGHTS UNDER THIRD PARTY LIABILITY POLICIES WITHOUT INSURER CONSENT

Third party liability insurance policies often contain “consent to assignment” clauses which purport to bar insureds from assigning policies without insurer consent. In the case of Henkel Corp. v. Hartford Accident & Indemnity Co., 29 Cal.4th 934 (2003), the California Supreme Court determined, under the specific facts of that case, that such clauses barred the insured from assigning policy rights without the insurer’s consent until there exists a “chose in action” against the insured, which occurs when the claims against the insured have “been reduced to a sum of money due or to become due under the policy.”   In Fluor Corporation v. Superior Court of Orange County, the California Supreme Court granted review to consider whether Section 520 of the California Insurance Code—an 1872…

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26 Aug 2015 PENNSYLVANIA HIGH COURT EXPANDS CIRCUMSTANCES UNDER WHICH INSUREDS MAY SETTLE UNDERLYING CLAIMS WITHOUT INSURER CONSENT

Liability policies often contain a “cooperation clause” pursuant to which an insurer who has agreed to defend an insured from an underlying lawsuit purports to have the right to approve any settlement to be entered into by the insured. A recent decision by the Pennsylvania Supreme Court, however, has expanded the circumstances under which an insured may settle underlying claims without insurer consent in situations where the insurer has reserved its rights and refuses to consent to a non-collusive, objectively reasonable settlement under policy limits.   In The Babcock & Wilcox Company et al. v. American Nuclear Insurers et al., the Pennsylvania Supreme Court granted review to determine whether “an insured forfeits insurance coverage by settling a tort claim without the consent of its insurer,…

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11 Jun 2015 INFRINGEMENT OF “SLOGAN” TRIGGERS THE DUTY TO DEFEND

In recent years, insurers have modified the coverage for “personal and advertising injury” in the standard form used in commercial general liability coverage to exclude claims for trademark infringement.  However, the coverage form continues to include “Infringing upon another’s copyright, trade dress or slogan in your ‘advertisement’” within the definition of “personal and advertising injury.” In lawsuits involving trademark infringement and related claims, policyholders should carefully examine the complaint to determine if the potential for infringement of “slogan” exists, thereby triggering a duty to defend the case notwithstanding any exclusion for trademark infringement.   The term “slogan” itself is not defined in the personal and advertising injury coverage form. Thus, courts will look to the term’s ordinary and common usage, and in that context, “slogan”…

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20 Mar 2015 Recent Decision Determines Retail Displays May Qualify as ‘Advertisements’ Under CGL Insurance Policies

A recent decision interpreting insurance coverage for “advertising injury” under commercial general liability (CGL) insurance policies ruled that claims of allegedly infringing product displays can trigger the duty to defend.  Most businesses purchase CGL insurance as a key part of their liability insurance programs.  The current version of the typical form used by insurers in connection with CGL policies provides coverage for “advertising injury” caused by an offense committed in the course of “advertising” the insured’s goods, products or services.  That form typically defines “advertisement” as notice published to the general public at large or specific market segments for purposes of attracting customers or supporters.   A recent Illinois appellate court decision, however, has recognized that advertising injury coverage extends to certain product displays.  Specifically,…

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