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BT Policyholder Protection Blog
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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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12 Jul 2016 In Determining Duty to Defend, Wisconsin Supreme Court Clarifies Four-Corners Rule

  In coverage actions, policyholders (and their attorneys) frequently rely on the well-accepted principle that an insurer’s duty to defend is broader than its duty to indemnify. Indeed, given the ever-escalating costs of litigation, obtaining coverage for a policyholder’s defense can be just as, if not more, important than obtaining coverage for the resulting settlement or judgment.   Recently, however, the Wisconsin Supreme Court issued two opinions that serve as reminders that an insurer’s duty to defend, while broad, is not unlimited. The cases provide insight into how courts evaluate an insurer’s duty to defend and reveal some factors policyholders should consider when confronted with an insurer that denies such coverage.   Marks v. Houston Casualty Company   In Marks v. Houston Casualty Company, No….

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06 Jun 2016 Can a Government Agency Information Demand Trigger a Liability Insurer’s Duty to Defend?

Can a demand from a state agency trigger insurance coverage? A recent decision by the U.S. Court of Appeals for the Ninth Circuit says “yes.” Many, if not most, jurisdictions now recognize that a demand from the Environmental Protection Agency (EPA) or a state agency to investigate and remediate contamination is the functional equivalent of a suit, which triggers a liability insurer’s duty to defend the recipient of the demand. The logic is that a communication from a governmental agency that includes a coercive remediation demand under an environmental statute, with the threat of fines or penalties for non-compliance, sufficiently bears the hallmarks of a traditional court lawsuit that there is no functional distinction between the two. Moreover, public policy dictates that a policyholder need…

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28 Oct 2015 You Snooze; You Lose: When The Carrier’s “Investigation” (Read: Delay) Breaches The Duty To Defend

Earlier this month, a California federal court issued a stern warning to liability carriers: failing to provide an immediate defense forfeits your right to control the policyholder’s defense, including any right to select counsel, and, once forfeited, the right to control irrevocably vests with the policyholder. The carrier cannot regain control, even if it reimburses pre-acceptance defense fees. Travelers Indem. Co. v. Centex Homes, Case No. 11-CV-03638-SC (N.D. Cal. Oct. 7, 2015).   Carriers and policyholders have long been engulfed in the battle as to when a carrier’s delay (usually couched in terms of an “investigation”) leads to forfeiture of the right to control; and, when it does, whether the carrier may re-gain control by paying pre-acceptance defense fees. Policyholders are all too familiar with…

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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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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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18 Dec 2014 COVERAGE FOR “DISPARAGEMENT”: A POWERFUL TOOL FOR TRIGGERING THE DUTY TO DEFEND IN BUSINESS DISPUTES

By the time a business dispute has evolved into litigation, the relationship between the parties has often become acrimonious. In addition to a claim for breach of contract, interference with economic relations or unfair competition, the plaintiff may also allege that the defendant made false or disparaging statements to third parties—customers, competitors, financiers—that harmed the reputation or business of the plaintiff. The existence of even a single allegation of such disparagement within a complaint is often sufficient to trigger a duty to defend by the insurer of the defendant business. If your business is on the receiving end of a lawsuit, it is critical to examine the lawsuit for such allegations of disparagement and to consider tendering the lawsuit to your general liability insurer to…

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