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BT Policyholder Protection Blog
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27 Nov 2017 When Should an Accident be an Accident?

  Standard commercial general liability (CGL) insurance policies provide coverage for damages the policyholder is legally obligated to pay because of property damage or bodily injury caused by an “occurrence.” CGL policies typically define “occurrence” as an “accident.” Courts define an accident as “an unexpected happening without an intention or design.” Auto-Owners Ins. Co. v. Harvey, 842 N.E.2d 1279, 1283 (Ind. 2006).   Simple, right? Unfortunately, a trilogy of cases from the Indiana Supreme Court have caused confusion on this issue, particularly where the policyholder may have errors and omissions (E&O) coverage.   In Harvey, a 16-year-old girl, Brandy, fell into a river and drowned after being intentionally pushed during an altercation with a boy, Toby. Toby admitted that he intended to push Brandy, but…

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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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17 Oct 2017 Insurance Carriers Exclude Color Matching Requirements from Policies

  The summer of 2017 saw a number of severe storms in the Midwest, with resulting insurance claims. As policyholders have made those claims, some have been surprised to see new provisions in their insurance contracts.   Things are not always black and white in insurance policies, especially when it comes to the impact of a Minnesota court decision that required insurers providing replacement cost coverage to reasonably match replacement siding. Since the Minnesota Supreme Court issued its opinion in Cedar Bluff Townhome Condominium Association, Inc. v. American Family Mutual Insurance Company, insurers have begun inserting language in their policies that expressly precludes the coverage requirement of matching based upon color, a change in product specifications, or other factors, in an attempt to circumvent this…

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09 Oct 2017 Four Things to Know About Certificates of Insurance

  One day, you’re asked to provide a Certificate of Insurance (COI) to someone with whom you’re doing business. The next day, you request a COI from another business. Do you know exactly what you’re giving and receiving in these seemingly routine transmissions? Do you get charged a fee for a COI? Here are four key points to keep in mind.   A COI is not an insurance policy   A COI is a form, usually completed by an insurance broker or insurance company, to document the existence of the insurance policy(ies) it describes. A COI often will include language indicating that it does not constitute a contract with the certificate holder, confers no rights on the certificate holder, and does not amend, alter or…

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01 Sep 2017 Preparing for and Responding to a Major Weather Event or Catastrophe

  The recent flooding in Houston in the wake of Hurricane Harvey serves as a vivid reminder that losses caused by weather events and natural disasters are becoming all too familiar sights.  According to numbers compiled by Munich Re, insured losses due to natural disasters in the United States in 2016 totaled $23.8 billion, a nearly 48 percent increase over the $16.1 billion total for 2015. The number of catastrophes (43) was the highest number of catastrophes in the 10 years from 2007 to 2016.   Results for 2017 remain uncertain based on Munich Re’s reporting so far this year. After a first quarter with record losses, the total at the half-way mark of 2017 was significantly below historical levels. The Houston flooding has caused…

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30 Aug 2017 Contingent Business Interruption Coverage: Insuring the Far-Reaching Effects of Tropical Storm Harvey

  Manufacturers and producers are keenly aware of the value provided by business interruption coverage. Typically, this coverage is sold to companies as one of several coverages under their commercial property insurance package. Business interruption coverage is generally triggered by physical damage to a company asset (e.g., a manufacturing plant), which causes a suspension of business activities resulting in a loss of business income.   Tropical Storm Harvey has forced manufacturers and producers across Southeastern Texas to shut down operations while repairing their damaged facilities. These companies will turn to their business interruption carriers to recoup their business income lost during this period. However, for companies doing business in that region, but physically located outside the reach of Harvey, business interruption coverage may not protect…

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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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15 Aug 2017 Should Independent Counsel Fees Be Charged Against Policy Limits?

  In a number of states, when an insurance company has a duty to defend its insured and reserves its rights in a certain way, the carrier must pay for independent counsel selected by the policyholder to defend the action alongside insurer-selected panel counsel. This is to cure the panel lawyer’s conflict of interest created where the interests of the carrier and the defended policyholder diverge.   The U.S. Court of Appeals for the Fifth Circuit decided recently that the carrier’s duty to pay independent counsel’s fees under Moeller v. American Guar. & Liab. Ins. Co. is governed by the terms of the policy, including erosion of limits. In a case from this spring, Fed. Ins. Co. v. Singing River Health Sys., the Fifth Circuit…

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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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