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BT Policyholder Protection Blog
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23 Jan 2017 Where There is No Meeting of the Minds About the Scope of Coverage, Must the Insurer Pay the Claim?

  Authored by David E. Wood and John L. Corbett   When a consumer buys an insurance policy and an important limitation on coverage is not expressed clearly and conspicuously, many courts will not enforce that limitation. Some courts hold that provisions in a preprinted policy offered to the consumer on a take-it-or-leave-it basis – that is, a contract of adhesion – are unenforceable to the extent they contradict laws governing insurance or public policies established by the courts. Other courts conclude that where a policy excludes a certain risk by way of small print or technical language, the policy is considered ambiguous and construed against the drafter (the insurance company). Those rules of construction rest on the assumption that the parties to the insurance…

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29 Dec 2016 Insurer Asks for a White Waiver as a Condition to Talking Settlement. Should You Do It?

  What is a “White waiver?”   In 1986, the California Supreme Court held that an insurance company’s low-ball offer of settlement to a policyholder made during litigation over an unpaid claim was admissible to prove the carrier’s bad faith in the same litigation, notwithstanding the settlement privilege. Insurance companies dislike this ruling because it prevents them from shrouding unreasonable settlement positions in the cloak of the settlement and litigation privileges. Insurance companies also, and not infrequently, require what is known among insurance lawyers in California as “a White waiver” before discussing settlement with an insured during a bad faith action.   Should the policyholder comply with this request? Does White really unwind the settlement and litigation privileges for bad faith settlement communications by an…

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28 Dec 2016 Have You Made Your List and Checked It Twice? Insurance Year-End Tips for Companies

  With the holiday season upon us, you may want to consider taking time to reflect on 2016 to better determine your insurance needs for next year.   Here are some questions to consider:   How many claims did your company have in 2016? Were the claims consistent with known risks and past claim trend data? Did you have any unexpected losses, and if so, are additional claims likely? Did your business create new lines of products or expand into new markets? Do you need to increase your policy limits or reduce your deductibles? Have you considered being self-insured up to a certain level in order to better control your claims handling? Have you carefully reviewed your vendor contracts to determine if indemnification clauses provide…

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30 Nov 2016 Sixth Circuit Opinion Serves as Reminder of Potential Pitfalls in Excess Coverage

  In previous posts, we’ve discussed the propensity of excess liability insurers to try to avoid coverage by challenging policyholder actions that occurred before the underlying defense costs or liability payments even reached the excess layer. In an opinion released earlier this month, the U.S. Court of Appeals for the Sixth Circuit addressed yet another such challenge and determined that actions a policyholder took years before its underlying policy limits were exhausted precluded coverage under its excess policy. For policyholders, the case serves as a useful reminder of how excess carriers might raise terms and conditions purportedly within their policies late in the claims process.   Stryker Corporation v. National Union Fire Insurance Company of Pittsburgh, Pa, Nos. 15-1657/1664 (6th Cir. Nov. 18, 2016) involved…

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28 Nov 2016 Exercise Your Bargaining Power at Renewal Time

  Co-authored by Scott Godes and John Fischer.   As the end of the year approaches, many policyholders are facing Jan. 1 renewals of their insurance programs or are looking at replacing part or all of their programs with new policies or carriers. Some are considering augmenting their insurance programs with specialty coverages pertinent to their particular needs. This is a friendly reminder to those whose renewals are coming up (and an advance reminder to those with renewal dates throughout the year) that although insurance policies frequently are made up of boilerplate language on pre-printed forms, some carriers will amend their coverages with endorsements that can enhance the coverages offered. Also, not all carriers’ standard forms are the same.   The opportunity to obtain coverage enhancements is…

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04 Nov 2016 Upcoming Webinar: Attorney Ethics in Insurance Coverage Matters

  Several members of Barnes & Thornburg’s Insurance Recovery and Counseling Practice Group will be speaking in an upcoming webinar, “Attorney Ethics in Insurance Coverage Matters,” scheduled for Dec. 6 from 3 – 4:30 p.m. EST.   Key takeaways include:   Learn about specific situations that give rise to a potential right to independent counsel and concerns that you as a policyholder should consider when deciding whether to insist on independent counsel. Additionally, learn how different states including yours resolve whether a right to independent counsel exists. Understand problematic provisions in insurance company outside counsel guidelines and the effect on representation and malpractice coverage. Hear tips for negotiating outside counsel guidelines with insurance carriers to avoid unreasonable burden. Finally, gain guidance on the sometimes complicated privilege and…

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11 Oct 2016 When the Damage is Done Are You Prepared to Litigate Against Your Insurance Company?

In the wake of Hurricane Matthew, there will certainly be a wave of claims and possible denials of coverage by insurance companies.  Before the storm hit, we heard a great deal about “preparedness” for the storm.  But, how prepared is your company if it has to litigate a claim against its insurance company?  Litigation against any party is often a costly and lengthy process.  Insurance coverage disputes are no different and often involve more aggressive tactics by the insurance company early in the case.   Here are some best practices for companies facing insurance coverage denials:   Re-review the denial letter and consider whether litigation is the best strategy You may want to consider other tactics against the insurance company, like using renewal time or…

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30 Sep 2016 California Court of Appeal Determines that Excess Insurer May Sue Primary Insurer for Unreasonable Refusal to Settle

  Insureds often have excess liability insurance policies to cover losses that exceed the limits of underlying primary insurance policies. Issues often arise, however, where a primary insurer refuses to settle a case within the limits of the primary policy, thereby implicating the excess policy.   In Ace American Insurance Company v. Fireman’s Fund Insurance Company, the 2nd District of the California Court of Appeal addressed the issue of whether an excess insurer could pursue a primary insurer that initially refused to settle a case within the limits of the primary policy where the underlying case was resolved by settlement in excess of the primary policy limits as opposed to a judgment.  This led to a situation in which the settlement demand increased above the…

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19 Sep 2016 Across State Lines: Fighting Back Against Your Carrier’s Forum-Shopping

  Co-authored by John Fischer and Abby Vineyard.   If you have ever been involved in a coverage dispute with your insurance carrier, you likely already know the importance of determining which state’s law will apply.  This is because different courts interpret the same policy language differently – what is covered under one state’s law may be outside the scope of coverage under the law of a different state, even under identical policy language.  Thus, the question of which state’s law will apply is often decisive on the question of whether coverage exists.   Insurance carriers know this, too, and will try to find a way to ensure that the law of the state that is friendlier to carriers will apply to the dispute.  In general, a litigant…

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16 Sep 2016 Renewal is a Time to Think Critically About Your Insurance Program

  The approaching year-end means many commercial policyholders will be going through the process of renewing their property and casualty insurance coverage. Whether renewal occurs at year-end or mid-year, it is a time when smart policyholders will be thoughtful and proactive about making sure their insurance program provides the best possible protection. No single checklist could possibly capture the numerous and varied issues that commercial policyholders might want to carefully consider. That said, below is a list of issues policyholders may want to examine as they go through the renewal process, keeping your own individual circumstances in mind.   Defense of liability claims – Having coverage for the costs of defending litigation can be one of the most important benefits of commercial liability insurance. The…

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