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BT Policyholder Protection Blog
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10 Sep 2015 NEW JUSTICE DEPARTMENT MEMO HIGHLIGHTS NEED FOR REVIEW OF SIDE “A” D&O COVERAGE

Heightened Liability Concerns for Individuals   On Sept. 9, 2015, the U.S. Department of Justice (DOJ) issued a memo to all U.S. attorneys and other enforcement bureaus (such as the FBI) providing guidance on the pursuit of individuals responsible for corporate wrongdoing. In essence, the memo says that the government is no longer going after only corporations; it will now also be focusing on those individuals within corporations responsible for corporate wrongdoing. The memo provides specific guidance for taking on these individuals. For example, it states that in order to qualify for cooperation credit, corporations must now provide all relevant facts relating to the individuals responsible for the misconduct and it states that absent extraordinary circumstances or approved departmental policy, the DOJ will not release…

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08 Sep 2015 Now available for viewing – Insurance Law Webinar: You’re Covered, But…

Two weeks ago, attorneys from our Policyholder Insurance Recovery and Counseling practice group hosted a webinar which featured discussion on tips to help policyholders get all the coverage they bargained for. The webinar was recorded and is now available for viewing.   The speakers and topics in the webinar include:   Full Coverage – An Insurance Agent’s Duty to Advise? Robert G. Devetski, Partner, Barnes & Thornburg   Absent a “special relationship,” an agent generally owes no duty to advise a policyholder about the adequacy of coverage. Here we consider factors which can create that “special relationship” and a resulting duty to advise.     Your Liability Insurer Agreed to Defend? Don’t Relax Yet John Fischer, Partner, Barnes & Thornburg   Getting your liability carrier…

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28 Aug 2015 Louisiana Federal Court Finds in Favor of Coverage for Work Required by Clean Air Act Consent Decree

A federal court in Louisiana recently interpreted the coverage under a Pollution Legal Liability (PLL) policy and found that certain costs required by a Consent Decree under the Clean Air Act constituted “remediation costs” covered by the PLL policy. Louisiana Generating LLC v. The Illinois Union Insurance Company, et al. Case 3:10-cv-0056. On Aug. 5, 2015, the United States District Court for the Middle District of Louisiana granted Louisiana Generating LLC’s motion for summary judgment against its insurer, Illinois Union Insurance Company, finding in favor of coverage for the installation of pollution controls and performance of mitigation projects required under the Consent Decree.   The Consent Decree resolved a prior suit in which EPA and the Louisiana Department of Environmental Quality sued Louisiana Generating LLC…

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26 Aug 2015 Barnes & Thornburg’s Insurance Recovery Team Helps Secure Federal Appellate Victory for Construction Company in Sunken Barge Case Eighth Circuit Clarifies Standard for Breach of “Utmost Good Faith” Doctrine in Marine Insurance Policies and Rejects Insurer’s Proposed Rule as Creating a “Moral Hazard”

On Aug. 20, 2015, the U.S. Court of Appeals for the Eighth Circuit issued an important favorable decision for marine insurance policyholders. The court reversed a summary judgment order that had been granted in favor of insurer St. Paul Fire & Marine Insurance Company (SPF&M) on a claim for wreck removal coverage for a construction barge that sank in Narragansett Bay, Rhode Island, in 2011. In doing so, the court confirmed that, to void a marine insurance policy under the federal maritime doctrine of uberrimae fidei (“utmost good faith”), an insurer must do more than show that the policyholder omitted information from the policy application that would have been objectively material to a hypothetical prudent and intelligent underwriter. In one of the clearest articulations of…

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26 Aug 2015 PENNSYLVANIA HIGH COURT EXPANDS CIRCUMSTANCES UNDER WHICH INSUREDS MAY SETTLE UNDERLYING CLAIMS WITHOUT INSURER CONSENT

Liability policies often contain a “cooperation clause” pursuant to which an insurer who has agreed to defend an insured from an underlying lawsuit purports to have the right to approve any settlement to be entered into by the insured. A recent decision by the Pennsylvania Supreme Court, however, has expanded the circumstances under which an insured may settle underlying claims without insurer consent in situations where the insurer has reserved its rights and refuses to consent to a non-collusive, objectively reasonable settlement under policy limits.   In The Babcock & Wilcox Company et al. v. American Nuclear Insurers et al., the Pennsylvania Supreme Court granted review to determine whether “an insured forfeits insurance coverage by settling a tort claim without the consent of its insurer,…

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20 Aug 2015 What Insurance Should Cover Target’s Visa Settlement?

Two years later, and the Target data breach continues to make headlines.   Does anyone need to be reminded that Target suffered a data breach in 2013? Seeing that the breach continues to be litigated and settlements continue to be announced with payment card brands, it is difficult to forget the incident.   Most recently, Target announced that it had reached a settlement with Visa.[1] According to reports, Target could “pay as much as $67 million to banks that issue Visa cards.”[2] Target’s earlier $19 million settlement with MasterCard[3] ended up being scuttled; Target and MasterCard reportedly are working on another resolution.[4]   What is Target settling?   Target’s settlement with Visa likely is to resolve the alleged damages resulting from Target’s payment card breach….

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07 Aug 2015 MORE ON INSURERS’ FLOAT – AN ILLUSTRATION

My March 24, 2015, post discussed the “true value” of a property/casualty insurer’s float, which includes not only the return the insurer makes on the money borrowed from its policyholders to pay future claims (i.e., total premiums), but also the avoided cost of borrowing that money (i.e., the “use value”). A few years ago I illustrated this point to the Minnesota legislature by compiling the following data on several insurers during a 15-year period, showing that the true value of the insurers’ float during that period averaged 24.1 percent per year – substantially higher than their average reported return on investment of 13.8 percent per year, and far higher than the single-digit statutory rate of prejudgment interest in a number of states that promotes insurer…

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04 Aug 2015 Join Us for an Insurance Law Webinar: You’re Covered, But…

Mark your calendar and join us for an insurance webinar on Tuesday, August 25 at 3 p.m. (Eastern). The Barnes & Thornburg Insurance Recovery and Counseling attorneys will provide tips to help your company get all the coverage it bargained for. The program is complimentary, and 1.5 hours of CLE credit is pending. You don’t want to miss this!   Full Coverage – An Insurance Agent’s Duty to Advise? Robert G. Devetski, Partner, Barnes & Thornburg Absent a “special relationship,” an agent generally owes no duty to advise a policyholder about the adequacy of coverage. Here we consider factors which can create that “special relationship” and a resulting duty to advise.   Your Liability Insurer Agreed to Defend? Don’t Relax Yet John Fischer, Partner, Barnes…

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24 Jul 2015 Quality Egg Appeal Serves as a Reminder to Look for Cracks in D&O Coverage for Responsible Corporate Officers

Earlier this week, Peter and Austin DeCoster submitted their opening briefs in their appeal of the three-month prison sentence they each received for pleading guilty to misdemeanor violations of the federal Food Drug and Cosmetic Act (FDCA). You may recall that the DeCosters owned Quality Egg, LLC, the Iowa-based egg production company that had a salmonella outbreak in 2010 that resulted in a recall of millions of eggs and, according to the court’s order on the DeCosters’ sentencing motions, sickened thousands of consumers. In connection with that outbreak, the DeCosters pled guilty to a charge of introducing adulterated food into interstate commerce in violation of the FDCA.   Although there was a dispute as to whether and how much the DeCosters actually knew about the…

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15 Jul 2015 Five Tips: Insurance Fundamentals for In-House Counsel

Many of our posts address specific issues for risk managers and in-house attorneys with insurance coverage experience. Recognizing that some in-house lawyers are relatively new to the insurance world, we thought some may appreciate a summary of some of the fundamental issues in insurance coverage. Today, we offer five sets of distinctions between related concepts at the heart of many insurance matters:   First-Party vs. Third-Party Coverage   First-party coverage pays you for loss or damage to your own property. For example, if your plant suffers a fire, you may want to make a claim under the property policy for damage to the building, equipment and machinery. The same policy may include business interruption coverage that can replace some of the profits lost while the…

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