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BT Policyholder Protection Blog
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13 Jun 2014 “Race to the Courthouse” Forum Shopping Strategy

  On behalf of a firm client, Barnes & Thornburg LLP attorneys Bob Devetski and John Fischer, working with local counsel, defeated Travelers’ “race to the courthouse” forum shopping strategy. Travelers’ strategy in the case is not an isolated incident, but seems to be a more prevalent practice of forum shopping to defeat their policyholders.   In 2011, rather than responding to the policyholder’s request for coverage of an environmental contamination lawsuit, Travelers filed a pre-emptive declaratory lawsuit in Iowa (whose law on the issue of insurance policy pollution exclusions Travelers believed is much more favorable to insurance companies). Travelers filed suit in Iowa a few days before the policyholder sued for coverage in Indiana, essentially winning the race to the courthouse of their choice….

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11 Jun 2014 Second Circuit Affirms The Broad Nature Of The Duty To Defend Under CGL Insurance Policies

  In a recent pro-policyholder insurance coverage decision, Euchner-USA, Inc. v. Hartford Casualty Insurance Company, 2014 WL 2576348 (2d Cir. June 10, 2014), the Second Circuit applied New York law and reminded insurance companies that the duty to defend is “exceedingly broad.” An insurance company has the duty to defend a claim even if there is only a possibility of coverage in light of how the underlying complaint against the insured has been pleaded.   Euchner sought coverage from its CGL insurer, Hartford Insurance, for an underlying action initiated by a former employee. In the underlying action, the former employee alleged that she was sexually harassed and then coerced into accepting an independent sales position disqualifying her from receiving “employee” benefits. She later added an…

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06 Jun 2014 Are An Insurance Company’s Claims Documents Attorney Client Privileged?

  Can an insurance company refuse to produce relevant documents, simply because they were authored or received by an attorney? In a word, no.   These days, it seems that virtually everyone who works for or with an insurance company is an attorney or went to law school. Why is that? Years ago, many claims people did not even have a college degree, much less a J.D. after their names. Now, however, it seems that insurance companies have their former-lawyers-turned-claims-handlers refer out claims investigation, analyses, and handling to outside counsel. Could it be that the main goal for such an approach is to withhold claims documents from insureds in a coverage litigation? Cynical readers will say yes.   Simply having outside counsel create or receive…

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29 May 2014 Scott Godes interview featured in, “If attorney needed to explain cyber coverage, the policy is not clear.”

  Scott Godes, from Barnes & Thornburg’s Policyholder Insurance Recovery Group, was featured in a recent article in the Advisen Cyber Risk Network.  Advisen’s Chad Hemenway interviewed Scott about cyber risks overall.   Scott was asked: His view on the greatest cyber risks today His view on what will the greatest threats be in 5 years’ time Whether the insurance industry is doing enough to adequately address those risks What keeps him awake at night And what, in his opinion, is the most important cyber risk development in the past 12 months   To see Scott’s responses, please check out “If attorney needed to explain cyber coverage, the policy is not clear.”       Scott GodesScott N. Godes is a veteran trial lawyer with experience in insurance coverage matters…

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23 May 2014 “Circumstance Reporting” Can Preserve D&O Coverage

  Many directors and officers liability policies are written on a “claims made and reported” basis. This means that the policy covers only claims that are asserted against the insured and reported to the insurer while the policy is in effect, or within a short grace period provided after the policy expires. The requirement that claims be reported while the policy is in effect can create practical and legal difficulties. This is particularly true when events that might end up resulting in a claim happen near the end of a policy period.   For instance, the insureds can be placed in a difficult situation when they receive communications that expressly or implicitly threaten to assert a claim, but the communications do not rise to the…

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21 May 2014 Scott Godes and Ken Gorenberg present “Taking the Target Off Your Back: Insurance Coverage for Data Breaches and Other Cybersecurity Threats”

  Scott Godes and Ken Gorenberg, from Barnes & Thornburg’s Policyholder Insurance Recovery Group, will be presenting on insurance coverage for data breaches and other cybersecurity risks at Barnes & Thornburg‘s “Baseball & The Law” CLE and baseball outing on May 22, 2014.  The event will be held at the firm’s Chicago office.   They will discuss spear phishing, give tips for evaluating a cyberinsurance policy  as well as give details of: Privacy incident Payment card brand liabilities Business disruption and data loss Costs related to cyber incidents and data breaches PCI compliance Insurance coverage for data breaches under CGL, crime, E&O, D&O and first party property insurance policies       Scott GodesScott N. Godes is a veteran trial lawyer with experience in insurance coverage matters and technology issues. He is…

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20 May 2014 Christopher Yetka and Clifford Shapiro Present “Risk Management and Insurance Issues in Construction”

  At the firm-sponsored “Construction Insurance and Government Contracting: What You Need to Know” seminar, Christopher Yetka of the Minneapolis office and Clifford Shapiro of the Chicago office presented, “Risk Management and Insurance Issues in Construction.”   Christopher and Clifford presented on how to make sense of complicated insurance policies related to construction projects, and identified potential risks and effective ways to work around the issues surrounding indemnity agreements and insurance requirements in construction contracts, including indemnity and coverage for additional insureds. They also addressed:   Whether or to what extent insurance coverage may exist for a construction defect claim under the Commercial General Liability (CGL) insurance policy and whether a claim alleging construction defects qualifies as an accidental “occurrence” under the CGL policy Effective use of…

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14 May 2014 ALL IS NOT LOST FOR CLAIMS MADE OUTSIDE POLICY PERIOD

Most businesses are aware that their claims-made insurance policies – like directors and officers policies, management liability policies and professional liability policies – generally provide coverage for claims made during the policy period (or, if purchased, an extended period of reporting).  It would be unwise, however, to simply assume that any claim made outside a policy period is untimely and not covered.  That is because claims-made policies also often contain “related claim” provisions, which deem a claim to have been made during a prior policy period if it is sufficiently related to another, prior claim.   A recent case illustrates the potential breadth of these related claim provisions.  A mortgage company had a professional liability policy with a policy period of May 10, 2007, to…

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14 May 2014 Insurance Claim? Be Prepared for Insurance Company Forum Shopping

  Because the insurance industry is subject to different laws in different jurisdictions, it is possible for the same claim under the same policy language to be covered in one state, and not covered in another.  Thus, insurers who write policies in different states identify which states are more favorable for certain types of claims or for certain policy language.  So when they are placed on notice of a policyholder’s claim from a jurisdiction that is not friendly to insurers in general, or to their policy language in particular, they may look to other possible jurisdictions in which to engage their policyholder in a coverage battle, hoping to defeat coverage by applying more favorable law, in a more favorable forum.   This is the scenario…

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14 May 2014 Scott Godes to present at the AFP® Annual Conference in Washington, DC

Scott Godes will be presenting at the AFP® (the Association for Financial Professionals®) Annual Conference at the DC convention center (the Walter E. Washington Convention Center) from November 2-5, 2014.  Scott will be part of a panel discussing insurance for cyber risks.    The topic for the panel will be:   Cyber Insurance: What Is It? Am I Covered? Network security and privacy risk – it’s ubiquitous. But do you really know what it is? The financial burden of a security breach event can be overwhelming and can often be mitigated with the purchase of an insurance policy. In this session, industry experts who have experienced breach events and understand the costs incurred as a result provide tips on breach preparedness, incident response, legal obligations and risk transfer mechanisms to…

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