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BT Policyholder Protection Blog
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07 Nov 2018 Read And Understand Your Policy Right Away, Or Else…

“Insurance customers can read their policies and learn of any defects.”   At least, that’s what the Illinois Supreme Court said on Oct. 18, 2018, in its ruling on American Family Mut. Ins. Co. v. Krop. Mind you, the court didn’t offer any support for this proposition. It simply said that “because insurance customers can read their policies and learn of any defects, the discovery rule typically will not delay the start of the two-year limitations period for negligent failure to procure insurance.”   Readers of this blog surely understand insurance policies more than most people. But I’ll go out on a limb and suggest that you might not always understand every provision. Heck, the fact that policyholders sue and sometimes prevail in coverage litigation…

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18 Oct 2018 Does Insurance Cover California Employers for Intentional Acts of Employee Violence?

For reasons unknown, your employee has attacked a customer with a weapon, causing grievous bodily injury. Now, you as the employer have been sued in a personal injury lawsuit. The theory is that you negligently hired a dangerous person and your failure to adequately supervise the employee allowed him or her to commit battery against a customer.   Will your commercial general liability insurance—which generally provides coverage for bodily injury claims—offer coverage to you as the employer in this situation?   Under California law, the answer depends on the specific language of exclusions your policy may contain. The California Supreme Court recently held that employers are entitled to commercial general liability coverage for allegations that they negligently failed to supervise employees who have engaged in…

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27 Jul 2018 Will Your Company’s Insurance Cover Losses Due to Phishing and Social Engineering Fraud? Six Tips for Evaluating and Seeking Coverage for Business Email Compromises

If your company fell victim to a business email compromise – a scam that frequently involves hackers fraudulently impersonating a corporate officer, vendor, business partner, or others, getting companies to wire money to the hackers – would your insurance cover your loss?  There is reason to be concerned about this sort of attack, as the FBI has explained that the “scam continues to grow and evolve, targeting small, medium, and large business and personal transactions. Between December 2016 and May 2018, there was a 136% increase in identified global exposed losses” in actual and attempted losses in U.S. dollars.  The good news for policyholders is that courts across the country have been ruling that crime insurance policies should provide coverage for this sort of loss,…

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11 Jun 2018 Is a Settlement of a Restitution Claim Covered If Your Policy’s Ill-Gotten Gains Exclusion Applies Only In the Event of a Final Adjudication?

Can liability insurance insure a policyholder’s legal obligation to return to a third party amounts that the policyholder was never permitted to obtain in the first place? Insurance carriers would cite comments from Judge Posner, of the Seventh Circuit Court of Appeals: “[a]n insured incurs no loss within the meaning of the insurance contract by being compelled to return property that it had stolen, even if a more polite word than ‘stolen’ is used to characterize the claim for the property’s return.” In this vein, insurance company personnel and their coverage counsel frequently take the position that if liability policies exclude from covered “Loss” “matters which are uninsurable” under applicable law, that encompasses a judgment of liability for restitution of amounts which the policyholder was…

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01 Jun 2018 Don’t Accept Policy Exclusions at Face Value, Especially in California

We’ve recently discussed the nuances of an insurer’s continuing duty to defend under California law in a “mixed” lawsuit alleging both covered and non-covered claims after the dismissal of the covered claims.   Insurers, however, sometimes try to evade their duty to defend at the outset, citing policy exclusions that appear – at first glance – to exclude coverage for what would otherwise be the one covered claim. Should you give up on coverage?   We don’t think so. As a preliminary matter, under California law exclusions are strictly construed against the insurer and liberally interpreted in favor of the insured. Accordingly, if there is any ambiguity as to whether the exclusion applies to negate the insurer’s duty to defend, California courts will construe the…

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16 Mar 2018 It’s Not Over Until It’s Over: An Insurer’s Continuing Duty To Defend After The Dismissal Of Covered Claims

Imagine this scenario: you are a California policyholder and have been sued in a lawsuit alleging one covered claim and multiple non-covered claims. Your insurer, applying California insurance law, thereafter recognizes both (1) its duty to defend subject to a reservation of rights and (2) your right to independent counsel based on the nature of the reservation of rights.  In the middle of the lawsuit, your defense attorney files a motion for summary adjudication that, when granted, leads to the dismissal of the one covered claim. Your insurer then threatens to stop funding the defense of the case, claiming that the dismissal of the covered claim has terminated its duty to defend. Is your insurer right under California law?   Not in our view. Both…

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30 Jan 2018 Four More Things to Know About Certificates of Insurance

  Having previously posted “Four Things to Know About Certificates of Insurance,” I’d like to offer four more best practices to consider.   Follow up for renewal certificates   A best practice is to have a Certificate of Insurance state the policy period for each policy it describes. If you need that coverage to continue beyond the stated policy period, another best practice is to follow up for a renewal certificate. Consider whether this could be added as a term in the contractual requirement for a Certificate of Insurance. For example, let’s say your company embarks on a major expansion of its facility, and the work is expected to take 18 months. Your company hires a general contractor, and your agreement with the contractor requires…

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25 Jan 2018 Avoid Insurance Related Risks to Help Your Bottom Line

  With the new year in full gear, your company likely has set revenue and growth goals for 2018. Unfortunately, just one uninsured or underinsured loss can often derail these efforts. Therefore, this is a great time for companies to review their insurance program and keep some of these best practices in mind:   First, check out Ken Gorenberg’s recent post that provides some great “New Year’s Resolutions for Policyholders.”   Consider reviewing your claims history over the last few years. Are there trends? Are there steps that might be available to your company to mitigate those particular risks? Moreover, how does your insurance program’s coverage limits align with those risks?   Does your company have procedures in place to determine when and how to…

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24 Jan 2018 Tell All: Making a Case for More Dialogue in the Insurance Application Process

  Do nothing secretly; for Time sees and hears all things, and discloses all. – Sophocles   Keeping secrets during the insurance application process is a bad idea. A policyholder who responds to application questions with incomplete or evasive answers to try to save a few dollars in premiums risks losing coverage altogether when those secrets are revealed. Conversely, by providing the underwriter with the information she needs to properly assess the risk, a policyholder is more likely to receive an insurance policy that meets its coverage needs. It behooves the parties to try to make the application process a cooperative exchange of information.   But even among well-intentioned parties, a potential for disconnect exists. Each side looks at the information exchange from a different…

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09 Jan 2018 New Year’s Resolutions for Policyholders

  The champagne bottles are empty, the football games are over, and the kids are back in school. That can only mean one thing – it’s time for New Year’s resolutions! If you are having a hard time coming up with the perfect resolution for 2018, here are some ideas for policyholders.   “I resolve to review at least the declarations pages of all my policies.” Confirm that the insured’s name is legally accurate and spelled correctly and that its address is up to date. Make sure the policy isn’t about to expire without renewal or replacement, unless you’ve already decided you don’t need the coverage anymore. Check that the coverages you selected during the application or renewal process are included and that the limits…

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