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BT Policyholder Protection Blog
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01 Aug 2014 FIFTH CIRCUIT DECISION PUTS EXCESS INSURER BACK IN LINE. BUT WILL IT CURB THE “REVERSE FOLLOW FORM” PHENOMENON?

  In recent years, excess insurers have been challenging the constraints of their traditional “follow form” status by trying to influence how the underlying insurance must be paid out. After a string of judicial decisions favoring excess insurers, a decision issued by the Fifth Circuit Court of Appeals in June marks a victory for policyholders hoping to stem the “reverse-follow-form” phenomenon. But as traditional concepts of follow form excess coverage continue to erode, policyholders should remain vigilant when evaluating their excess coverage.   The Evolution of “Follow Form” Excess Coverage   Policyholders purchase “follow form” excess insurance to gain piece of mind. Indeed, the very words “follow form” convey an image of a coverage tower in which each successive layer sits atop and follows the…

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25 Jul 2014 Recent Changes in Insurance Status Affects Companies Seeking Additional Insured Status

  For those companies that are seeking additional insured status, keep in mind that there have been major changes in how that insurance status is written. The Insurance Services Office, the drafter of many “standard form” insurance policies and endorsements, has been paring back coverage for additional insureds for many years.  It rolled out major overhauls to its standard form additional insured endorsements recently.  Insurance companies, too, have been tightening their own company forms, to the extent that they don’t use the ISO forms.   This area of insurance has evolved substantially over the years.  As one commentator has noted: “Twenty years ago, additional insured endorsements came in two flavors:  The short form and the long form.  Today there are more flavors than found in Baskin-Robbins…

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18 Jul 2014 Unmanageable Risk – An Unintended Consequence of Self-Insured Retentions

A Self-Insured Retention, or SIR, as it is commonly known as, represents the amount of risk that a company is prepared to retain for its own account. It denotes the point at which the risk passes from the company, as self-insurer, to a professional insurer.  Typically, retention layer losses – those losses that remain with the company – are not catastrophic so as to impact the company’s ability to remain a going concern.  As such SIRs have been used by companies for decades as effective risk management tools.   A recent decision out of the Eastern District of California potentially turns this risk management principle on its ear.  In Evanston Ins. Co. (Evanston) v. North American Capacity Ins. Co. (NAC), the court required a contractor…

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16 Jul 2014 Insurance and indemnity issues arising out of AIA form agreements and contracts.

  On July 14, 2014, Charlie Edwards gave a presentation on indemnity and insurance issues for architects to the Indianapolis Chapter of the American Institute of Architects (AIA).  The presentation covered indemnity and insurance issues arising out of the standard AIA form agreements. It also covered insurance issues related to construction projects, such as additional insured status and forms, insurance implications of “flow-down” provisions in construction contracts and waivers of subrogation.   If you missed the presentation and would like to obtain copies of the materials, or have any questions on these topics, email Charlie Edwards.   Charles EdwardsCharles P. Edwards is co-chair of the firm’s Policyholder Insurance Recovery and Counseling Practice Group, which exclusively represents policyholders in insurance claims and litigation. Mr. Edwards has worked with a…

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11 Jul 2014 Reliance Insurance Co. Liquidation Claims: Recent Offers To Convert Claims To Cash

  For corporate policyholders with Reliance Insurance Company insurance policies, recent developments have created opportunities to sell or reevaluate the financial value of claims against the policies. First, some background. Reliance Insurance Company was placed in liquidation on Oct. 3, 2001, by Order of the Commonwealth Court of Pennsylvania. The Reliance liquidation was, and still is, one of the largest insurance company liquidations in U.S. history. Reliance is paying its liabilities through a court-appointed Liquidator, namely, the Insurance Commissioner of Pennsylvania. Many insurance liquidations take decades to resolve (such as Ambassador, Midland, Home and others), and it is probable that Reliance will take at least 20 years to run-off all of its liabilities and pay the various classes of claimants until the assets are finally…

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03 Jul 2014 Scott Godes to present at ACC-SoCal’s Networking Cocktail Reception: “Be a Cyber Risk Hero – Understand the Risks and Learn Best Practices to Get Them Insured.”

Scott Godes, from Barnes & Thornburg’s Policyholder Insurance Recovery Group, will be presenting on cybersecurity, data breaches and insurance coverage for those risks at the Association of Corporate Counsel Southern California Chapter (ACC-SoCal) “Networking Cocktail Reception: Be a Cyber Risk Hero – Understand the Risks and Learn Best Practices to Get Them Insured.“ The event will take place:   July 24, 2014, 5 p.m. PDT   The California Club 538 S. Flower Los Angeles, CA 90071   The overview of the presentation is:   Is cybersecurity a board-level concern for your company? What does that even mean? Can you get someone else to share in the financial risk of this burgeoning threat? In this CLE, you will hear about the latest risks, how much they’ll cost…

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27 Jun 2014 Minnesota’s Bad Faith and Insurance Interest Statutes Instrumental in Recovery for Barnes’ Client

  In February of this year, Christopher Yetka and Barnes & Thornburg obtained a $2,200,000 jury verdict against Delos Insurance Company in a hail and wind loss coverage claim on behalf of The Landings Homeowners Association, Inc.  The Landings is a nineteen building, fifty-eight unit, townhome complex between Target Field and the Mississippi River in downtown Minneapolis. The Landings purchased a replacement cost property policy from Delos that was in effect at the time a storm hit on May 10, 2011.  The storm was so severe that it halted the Twins game that was playing just a few blocks away, and generated hail up to two inches in diameter. The Landing’s expert testified that all of the roofs at the Landings were so heavily damaged…

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27 Jun 2014 Personal and Advertising Injury Coverage Is Fertile Ground for Policyholders

  Many policyholders overlook or don’t understand the “personal and advertising injury liability” section of a standard commercial general liability (CGL) policy. That section is fertile ground for policyholders, and this lesson is taught even from two recent California cases that policyholders lost.   In Street Surfing, LLC v. Great Amer. E&S Ins. Co., (9th Cir. June 10, 2014), the policyholder began selling a skateboard with the Street Surfing brand name and logo in December 2004. It purchased a CGL policy in August 2005. Street Surfing was later sued for trademark infringement, unfair competition and unfair trade practices by the owner of the “Streetsurfer” trademark. Importantly, the insurance company conceded that the lawsuit was potentially covered as arising from “[t]he use of another’s advertising idea…

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26 Jun 2014 Insurance Coverage and Risk Mitigation for the In-House Practitioner

  On June 25, 2014, Charlie Edwards and Kara Cleary, from Barnes & Thornburg’s Policyholder Insurance Recovery Group, gave a presentation to in-house counsel and other corporate representatives regarding insurance coverage and risk management.     The CLE, called “Insurance Coverage and Risk Mitigation for the In-House Practitioner,”  addressed insurance issues and other risk transfer provisions that often get little attention in business transactions.  The topics addressed included the transferability of insurance rights in buy/sell transactions, tips for drafting contractual insurance requirements, as well as hot topics in Directors and Officers liability and recommendations to reduce risk to your company.     For those who missed the presentation, you can request the materials by emailing Charlie Edwards or Kara Cleary.        Charles EdwardsCharles P. Edwards is co-chair of…

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20 Jun 2014 An Expanding View On Satisfying The Self-Insured Retention

  Recent insurance coverage decisions have reminded insurance companies that, absent incredibly clear language otherwise, inconsequential requirements dictating satisfaction of self-insured retentions (SIRs) will not be enforced. As long as the insurer receives a “credit” equal to the amount of the SIR, courts have been reluctant to enforce requirements as to who pays the SIR or even whether the SIR gets paid. This makes sense. Insurers are responsible only for the amount in excess of an SIR; thus, it should make no difference who pays the SIR or even whether the SIR is paid. Either way, the insurer maintains the benefit of the SIR.   Many liability policies require that the insured satisfy an SIR before the insurer’s duty to defend and indemnify can be…

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