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BT Policyholder Protection Blog
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30 Jan 2017 Recent Trial Win Raises Interesting Issues on Relationship Between Insurance Agent and Policyholder

Disclaimer: Barnes & Thornburg represented the policyholder in this case and the policyholder has provided their consent for this case summary. NOTE THAT ANY CASE DECISIONS, COURT OPINIONS, RULINGS, AND/OR RESULTS DEPEND UPON A VARIETY OF FACTORS UNIQUE TO EACH CASE.   CASE RESULTS DO NOT GUARANTEE OR PREDICT A SIMILAR RESULT IN ANY FUTURE CASE UNDERTAKEN BY THE LAWYER OR THE LAW FIRM.   Can an insurance agent’s statement and representations bind an insurance company? A recent Minnesota court said, “yes.”   In January 2015, Barnes & Thornburg client Prospect Foundry, LLC, was sued in Hennepin County District Court for breach of contract by its workers’ compensation insurer, Western National Mutual Insurance Company. Western National sought $245,000 in unpaid premiums. Prospect disputed the amount…

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27 Jan 2017 Franchisors: Don’t Forget About Insurance for Joint Employer Liability Claims

  By Matthew B. Gruenberg and Matthew B. O’Hanlon   Separate and apart from creating a brand and an offering that consumers enjoy, franchisors face everyday issues such as complex schemes that restrict the terms and conditions under which they may sell franchises and conduct business.  In addition, under expanding concepts of joint employer liability, issues exist as to whether franchisors may potentially be sued for, among other things, employment-related claims brought by employees of franchisees.   To protect against such claims, a best practice for franchisors is to take reasonable precautions by not exerting authority or control over the franchisee’s employment practices. These precautions include taking care not to retain or assume a general right of control over factors such as hiring, direction, supervision,…

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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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