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02 Aug 2016 Scott Godes Quoted in Law360’s “Insurance Regulation And Legislation: Midyear Report”

  Scott Godes, partner and co-chair of the firm’s Data Security and Privacy Practice Group, was recently quoted in “Insurance Regulation And Legislation: Midyear Report,” published by Law360.   In the article, Scott pointed out that European authorities have stated that the Privacy Shield ensures that every complaint against a company over purportedly lax data security practices will be dealt with and resolved. As such, corporate policyholders engaging in trans-Atlantic data transfers need to re-examine their insurance programs and make sure their coverage is broad enough to address the costs of responding to consumer and regulatory actions.   Read the full article here. Scott GodesScott N. Godes is a veteran trial lawyer with experience in insurance coverage matters and technology issues. He is a partner in Barnes &…

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01 Aug 2016 Business Insurance 101: Back to the Basics

  Insurance coverage cases often involve complex or unusual issues. Similarly, blogs and insurance newsletters typically revolve around breaking decisions or new trends in the market. In this realm, insurance basics and best practices can be overlooked. Because insurance policies and insurance law can be murky for those who don’t deal with it frequently, I recently gave a presentation about the basics of insurance for businesses. This post summarizes some high level points that we discussed.   What are common types of policies for companies? Commercial general liability, products liability, property, directors & officers, professional liability, employment practices liability, crime and cyber, to name a few. A company should work closely with its broker to identify the types and limits of coverage it should consider…

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19 Jul 2016 Don’t Forget About Pre-Judgment Interest on Wrongfully Withheld Policy Benefits

  Has your insurer informed you that belated payment of policy benefits somehow “cures” any prior delay and insulates the insurer from any further liability?   Don’t believe it. In fact, under California law a wide range of damages are potentially available for an insurer’s failure to timely pay an insurance claim under a bad faith theory. These include, among other things, consequential damages for the insurer’s tortious conduct – such as attorneys’ fees incurred in seeking the subject policy benefits – and punitive damages upon a proper showing.   Bad faith damages, however, do not constitute the sole remaining policyholder remedy for wrongfully withheld policy benefits.  Indeed, insureds often forget that pre-judgment interest is available in instances where the benefits sought are capable of…

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12 Jul 2016 In Determining Duty to Defend, Wisconsin Supreme Court Clarifies Four-Corners Rule

  In coverage actions, policyholders (and their attorneys) frequently rely on the well-accepted principle that an insurer’s duty to defend is broader than its duty to indemnify. Indeed, given the ever-escalating costs of litigation, obtaining coverage for a policyholder’s defense can be just as, if not more, important than obtaining coverage for the resulting settlement or judgment.   Recently, however, the Wisconsin Supreme Court issued two opinions that serve as reminders that an insurer’s duty to defend, while broad, is not unlimited. The cases provide insight into how courts evaluate an insurer’s duty to defend and reveal some factors policyholders should consider when confronted with an insurer that denies such coverage.   Marks v. Houston Casualty Company   In Marks v. Houston Casualty Company, No….

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23 Jun 2016 Iowa Supreme Court Joins Other Courts to Hold That Defective Work of a Subcontractor can be an “Occurrence” Under the Modern Standard-Form CGL Policy

On June 10, 2016, the Iowa Supreme Court, in a split decision, clarified and changed Iowa law regarding insurance coverage for construction defects. Among other things, the majority decision holds that the modern standard-form CGL policy provides “coverage for property damage arising out of defective work performed by an insured’s subcontractor unless the resulting property damage is specifically precluded from coverage by an exclusion or endorsement.” The decision discusses in detail the history and evolution of the standard CGL policy form, including the 1986 addition of the subcontractor exception to the “your work” exclusion, and observes that it would be “illogical for an insurance policy to contain an exclusion negating coverage its insuring agreement did not actually provide or an exception to exclusion restoring it.”   Iowa…

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06 Jun 2016 Can a Government Agency Information Demand Trigger a Liability Insurer’s Duty to Defend?

Can a demand from a state agency trigger insurance coverage? A recent decision by the U.S. Court of Appeals for the Ninth Circuit says “yes.” Many, if not most, jurisdictions now recognize that a demand from the Environmental Protection Agency (EPA) or a state agency to investigate and remediate contamination is the functional equivalent of a suit, which triggers a liability insurer’s duty to defend the recipient of the demand. The logic is that a communication from a governmental agency that includes a coercive remediation demand under an environmental statute, with the threat of fines or penalties for non-compliance, sufficiently bears the hallmarks of a traditional court lawsuit that there is no functional distinction between the two. Moreover, public policy dictates that a policyholder need…

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02 Jun 2016 When is “Wrongful” Eviction Intentional and Therefore Not Covered?

On May 23, the Minnesota Court of Appeals issued an unpublished decision addressing what actions by a rental home owner would be considered an “occurrence” triggering coverage and whether the actions would constitute an intentional act to exclude coverage.   In State Farm Fire & Cas, Co. v. Otten, No. A15-1574, 2016 WL 2946110 (Minn. Ct. App. May 23, 2016), the court focused on whether an insurance policy covered or excluded the personal injury resulting from the rental home owners’ wrongful eviction of their tenant. The rental home was insured by State Farm’s Rental Dwelling Policy. This policy allowed coverage for personal injury resulting from an “occurrence,” which specifically included wrongful evictions, but excluded coverage for personal injury resulting from intentional acts. The Minnesota Supreme…

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24 May 2016 Scott Godes quoted in Law360 Article “Policyholders Get Digital Fraud Coverage Boost at 8th Circ.”

Scott Godes, partner and co-chair of the firm’s Data Security and Privacy Practice Group, was recently quoted in “Policyholders Get Digital Fraud Coverage Boost at 8th Circ.,” published by Law360.   On May 20, the Eighth Circuit found that a bank employee’s failure to secure a computer network does not nix insurance coverage for a fraudulent transfer loss caused by a hacker, which in turn bolsters policyholders seeking coverage for digital fraud by blaming the hacker despite the employee’s negligence.   Scott is quoted numerous times in the article, including one note stating “A key point in the decision was the court’s finding that even if employees were negligent, that doesn’t convert a direct loss into an indirect loss. That holding should help policyholders secure…

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20 May 2016 New York Lets Policyholder Choose Which Insurers Must Pay “All Sums” for Claims Spanning Many Years

Businesses facing asbestos or environmental claims may be encouraged by a decision from New York’s highest court earlier this month. This new decision allows the policyholder to choose which of many policy periods should initially be responsible for the policyholder’s asbestos litigation, work its way up that particular coverage tower and then select another period and another as may be necessary. See In re Viking Pump, Inc. and Warren Pumps, LLC, Insurance Appeals, No. 59 (NY May 3, 2016). The policyholder does not have to prorate its claims equally among its many years of possible coverage. Id.   The problem is all too familiar   Your company may already be in a similar situation. If not, imagine your company faces numerous lawsuits by individuals alleging…

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17 May 2016 Does a CGL Insurance Policy Cover a Data Breach? The Fourth Circuit Says ‘Yes’

Introduction   If you have anything to do with cybersecurity, privacy, or insurance, you undoubtedly have heard that the U.S. Court of Appeals for the Fourth Circuit ruled in April that a Commercial General Liability (CGL) insurance policy provides coverage for a data breach, in the case Travelers Indemnity v. Portal Healthcare Solutions.  In the last few years, insurance companies have been marketing cyberinsurance policies as the product designed for cybersecurity and privacy risks.  So how could it be that a CGL insurance policy – which insurance company lawyers proclaim were not “meant” to cover data breaches – provides coverage for data breaches?  We discuss the well-reasoned Portal Healthcare decision, which bolsters policyholders’ rights to collect under CGL policies, below.   The first question when…

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