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BT Policyholder Protection Blog
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20 Aug 2015 What Insurance Should Cover Target’s Visa Settlement?

Two years later, and the Target data breach continues to make headlines.   Does anyone need to be reminded that Target suffered a data breach in 2013? Seeing that the breach continues to be litigated and settlements continue to be announced with payment card brands, it is difficult to forget the incident.   Most recently, Target announced that it had reached a settlement with Visa.[1] According to reports, Target could “pay as much as $67 million to banks that issue Visa cards.”[2] Target’s earlier $19 million settlement with MasterCard[3] ended up being scuttled; Target and MasterCard reportedly are working on another resolution.[4]   What is Target settling?   Target’s settlement with Visa likely is to resolve the alleged damages resulting from Target’s payment card breach….

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07 Aug 2015 MORE ON INSURERS’ FLOAT – AN ILLUSTRATION

My March 24, 2015, post discussed the “true value” of a property/casualty insurer’s float, which includes not only the return the insurer makes on the money borrowed from its policyholders to pay future claims (i.e., total premiums), but also the avoided cost of borrowing that money (i.e., the “use value”). A few years ago I illustrated this point to the Minnesota legislature by compiling the following data on several insurers during a 15-year period, showing that the true value of the insurers’ float during that period averaged 24.1 percent per year – substantially higher than their average reported return on investment of 13.8 percent per year, and far higher than the single-digit statutory rate of prejudgment interest in a number of states that promotes insurer…

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04 Aug 2015 Join Us for an Insurance Law Webinar: You’re Covered, But…

Mark your calendar and join us for an insurance webinar on Tuesday, August 25 at 3 p.m. (Eastern). The Barnes & Thornburg Insurance Recovery and Counseling attorneys will provide tips to help your company get all the coverage it bargained for. The program is complimentary, and 1.5 hours of CLE credit is pending. You don’t want to miss this!   Full Coverage – An Insurance Agent’s Duty to Advise? Robert G. Devetski, Partner, Barnes & Thornburg Absent a “special relationship,” an agent generally owes no duty to advise a policyholder about the adequacy of coverage. Here we consider factors which can create that “special relationship” and a resulting duty to advise.   Your Liability Insurer Agreed to Defend? Don’t Relax Yet John Fischer, Partner, Barnes…

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24 Jul 2015 Quality Egg Appeal Serves as a Reminder to Look for Cracks in D&O Coverage for Responsible Corporate Officers

Earlier this week, Peter and Austin DeCoster submitted their opening briefs in their appeal of the three-month prison sentence they each received for pleading guilty to misdemeanor violations of the federal Food Drug and Cosmetic Act (FDCA). You may recall that the DeCosters owned Quality Egg, LLC, the Iowa-based egg production company that had a salmonella outbreak in 2010 that resulted in a recall of millions of eggs and, according to the court’s order on the DeCosters’ sentencing motions, sickened thousands of consumers. In connection with that outbreak, the DeCosters pled guilty to a charge of introducing adulterated food into interstate commerce in violation of the FDCA.   Although there was a dispute as to whether and how much the DeCosters actually knew about the…

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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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14 Jul 2015 Scott Godes Quoted in Law360 Article, “4 Insurance Takeaways from Lloyd’s Cyberattack Report”

Scott Godes, partner and co-chair of the firm’s Data Security and Privacy Practice Group, was recently quoted in Law360’s article, “4 Insurance Takeaways from Lloyd’s Cyberattack Report.”   Lloyd’s of London recently co-wrote a report predicting that a major cyberattack on the East Coast could trigger $70 billion in covered insurance claims. The article examines four takeaways for insurers and policyholders.   Godes noted that the report admits there could be coverage for cyber-based events in multiple types of insurance policies.  He also suggests that the insurance industry should introduce a cyberinsurance policy parallel to a commercial package policy, providing coverage for all types of losses resulting from a cyber event.   He is quoted multiple times in the article.  In one, he is quoted…

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13 Jul 2015 Texas Supreme Court to Decide Key Coverage Question on Policyholders’ Rights

In recognition of the opening of our Dallas, Texas, office, this week’s blog focuses on an important Texas Supreme Court decision anticipated by policyholders and insurers to define the manner in which policyholders may resolve disputes with claimants after an insurer wrongfully denies a defense and coverage.   Seger, et al. v. Yorkshire Ins. Co., Ltd. And Ocean Marine Ins. Co., Ltd. (Case No. 13-0673)  is currently pending before the Texas Supreme Court for decision.  Oral argument has been set for Sept. 15, 2015.  Amicus curiae briefs have been filed by the American Insurance Association, the Property Casualty Insurance Association of America, Lloyd’s America, Inc., the Texas Insurance Coverage League and the Texas Civil Justice League.  Both sides of this dispute have weighed in heavily on…

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06 Jul 2015 Scott Godes Quoted in Law360 Article, “4 Cyberinsurance Battlegrounds to Watch”

Scott Godes, partner and co-chair of the firm’s Data Security and Privacy Practice Group, was recently quoted in Law360’s article, “4 Cyberinsurance Battlegrounds to Watch.”   The article examines four key battlegrounds to watch when seeking coverage under cyberinsurance policies.  Scott was quoted multiple times about exclusions and limitations within cyberinsurance policies.  One of Scott’s quotes related to an insurance company’s recent denial of coverage based on alleged security requirements within a cyberinsurance policy.  Scott is quoted saying,   “The idea that an alleged failure to meet some security requirement would result in the exclusion of coverage should be seen as offensive. It puts a policyholder in a spot where, every time a claim is made, there is a trapdoor to coverage.”   Scott gave…

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26 Jun 2015 CONSENT JUDGMENTS: WHEN AN INSURER FAILS TO DEFEND

Your business has been sued for negligence, but the complaint also references allegedly intentional acts. The potential liability for the company could be catastrophic. This is exactly why your company has liability insurance and you tender it to the insurance carrier. Rather than accept the defense, the carrier denies, pointing to the intentional acts exclusion in the policy. The business spends months fighting the claims, but is unsuccessful in getting the claims dismissed, and doesn’t have the financial resources to fight a second-front battle with its insurance carrier. It is now the eve of trial and you are concerned that there is a likelihood the jury could find the company liable. Furthermore, the company does not have sufficient funds to pay a settlement, much less…

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17 Jun 2015 Cyber Insurance is Only for Retailers, Right?

News about cybersecurity and cyberattacks has changed. It seems that cyber criminals have broadened their focus beyond just data breaches involving personally identifiable information (PII) or protected health information (PHI). Now, a significant percentage of companies worldwide reportedly are facing attacks designed to shut down their computer networks, to delete data or control their equipment. This changing focus of cyber criminals makes clear that even though retailers, healthcare organizations, and banks have received a lot of media attention in this arena, all companies need to be prepared for a cyberattack. Diligent preparation includes not only implementing safeguard measures and response plans, but should also include an evaluation of your company’s insurance program to determine if you have sufficient coverage for your company’s potential cyber risks….

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