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BT Policyholder Protection Blog
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05 Jan 2015 Color Match Arrives (Again) in Minnesota

Last month, the Minnesota Supreme Court issued an opinion addressing an insurer’s obligation to match replacement materials after homes suffered storm damage. The opinion in Cedar Bluff Townhome Condominium Association, Inc. v. American Family Mutual Insurance Company, –N.W.2d–, No. A13-0124, 2014 WL 7156914 (Minn. Dec. 17, 2014) stemmed from a hail storm in October 2011 that damaged buildings in the Cedar Bluff townhome neighborhood.   Cedar Buff sought coverage for complete replacement of the buildings’ siding. However, American Family (AmFam) took the position that the policy only required replacement of the individual panels actually damaged by the storm, even though the replacement panels would be slightly darker or lighter than the original panels. The district court granted summary judgment to AmFam, finding that the policy…

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23 Dec 2014 Don’t Overlook Insurance as a Source of Protection from Losses Caused by Fraud or Theft

Widely cited reports and estimates find that employee theft and embezzlement causes billions of dollars in losses for businesses annually. The approaching new year – often a time for insurance renewals – offers businesses the opportunity to take a fresh look at whether they are sufficiently covered for these potentially devastating losses. Insurance frequently can be the most promising source of recovery after fraud or theft losses given that efforts to recover stolen funds from the wrongdoer may be futile. Coverage can be available from a variety of sources. Standard fidelity policies, for example, provide coverage for losses caused by an employee’s dishonest or fraudulent conduct. Financial institution coverage may reimburse losses caused by fraudulent conduct occurring in the course of obtaining loans or funds…

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19 Dec 2014 Insurers Ordered to Contribute $30 Million Toward Overdraft Settlement

Earlier this week, a decision from the United States District Court for the District of Minnesota required Indian Harbor Insurance Co. and Ace American Insurance Co. to cover $30 million of U.S. Bancorp’s $55 million class settlement of overdraft fee litigation and related defense costs. In the coverage suit, U.S. Bancorp sought coverage related to the settlement of three class actions alleging that the bank changed the order of customers’ debit card transactions from highest to lowest, rather than processing them chronologically, so that it could maximize overdraft fees. In defense of the suit, the insurers argued that coverage was not afforded under the respective policies because the underlying suits sought restitution, which the policies expressly excluded from the definition of loss.   In granting…

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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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09 Dec 2014 The Other Cyber Shoe Has Dropped – What Does that Mean for Your Insurance Program?

Just when you thought that it could not get worse for companies in the context of cybersecurity and privacy issues…it does. The end of 2014 has been brutal. Perhaps most significant, a court allowed banks to proceed against a retailer to pursue damages allegedly flowing from a cyberattack and data privacy incident involving payment card numbers. That same retailer disclosed hundreds of millions of dollars in losses as a result of the cyberattack a data privacy incident. Another retailer fell victim to a cyberattack and data privacy incident involving payment card numbers. Major entertainment businesses suffered cyberattacks, with one allegedly involving information about celebrities, corporate IP, and user names and passwords for social media accounts of the company. Distributed denial of service attacks (DDoS) are…

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05 Dec 2014 Wasteland: How Old Insurance Policies Can be Used for Cleanup Costs

This month’s issue of National Geographic includes an interesting article and interactive map regarding the status of investigation and clean-up of Superfund sites throughout the country. See Paul Voosen, “Wasteland”, National Geographic (Dec. 2014). NG reports that treatment of site contamination is ongoing but incomplete at more than 1,160 sites, and another 95 sites remain uncontrolled. NG observes that “Money remains a constant problem” because the Superfund is nearly depleted. The Superfund taxes on crude oil and chemicals expired in 1995, and so the program has had to increasingly rely on general tax appropriations and recovery from responsible parties.   The NG article’s scope was limited to Superfund sites, and so did not address the numerous additional “Brownfield” sites around the nation that are not…

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02 Dec 2014 Getting the Most Out of Your Contractual Insurance Provisions

In business agreements of all types, it is common to require your counterpart to secure and maintain insurance for the term of the agreement. The purpose of requiring insurance is to manage and, hopefully, mitigate risk. For instance, it will help to ensure that your counterpart has coverage in the event that it faces liability arising out of its conduct in furtherance of your agreement. Further, if your contractual insurance requirements are drafted correctly, your counterpart’s insurance can serve as an additional source of coverage for you in the event that you too face liability arising out of your counterpart’s activities.   To determine what types of insurance are necessary for your business arrangement, you must consider the nature of the activities in which your…

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26 Nov 2014 Thankful for Our Policyholder Clients and Insurance Professional Colleagues

This Thanksgiving, Barnes & Thornburg’s Policyholder Insurance Recovery and Counseling Practice Group is thankful for our clients and colleagues who have made us one of the largest and most recognized insurance recovery practices in the country.   Just this week, we appeared in Law360’s list of 100 law firms with the most insurance partners. Importantly, the vast majority of those firms represent insurance companies. We don’t. We exclusively represent corporate and individual policyholders, who we have helped recover hundreds of millions of dollars from insurance companies.   And we are among the nine nominees for Best Policyholders’ Counsel of the Year at Advisen’s Management Liability Awards dinner next week in New York.   We are also one of the very few policyholder practices that is…

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25 Nov 2014 Do We Have Coverage for This? Sometimes it’s worth getting a second opinion

Do you have coverage for claims?  Here is a perfect example of a situation where you might not want to take no for an answer. Recently, a firm client received a letter from the U.S. E.P.A. advising of an underground environmental contamination which appeared to be coming from their property and would require significant remediation.  When the firm client called its insurance broker, he advised that the client had no coverage for the claim, because it was excluded from coverage by the pollution exclusion in their commercial general liability policy.   When the client turned to Barnes & Thornburg LLP for help, we submitted the claim to several of the client’s commercial general liability insurers.  With the notice of claim, we provided the insurers with…

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24 Nov 2014 SOFT INSURANCE MARKET

For those policyholders approaching year end renewals, bear in mind that the insurance, and importantly the reinsurance, markets remain soft. A lack of major 2014 hurricane activity and other catastrophic casualty losses have left the insurance market soft and driven down the internal costs of insurance (such as the cost of reinsurance premiums). Casualty insurers are posting major profits and are actively seeking new policyholder markets.   At renewal, policyholders should be presented with multiple, competitive options for casualty insurance by their brokers. Keep in mind that policyholders are in a strong position to negotiate terms and conditions of their insurance, including choice of their own defense counsel and scope of D&O coverage in particular. As the financial claims fallout from the recession has essentially…

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