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BT Policyholder Protection Blog
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27 Nov 2017 When Should an Accident be an Accident?

  Standard commercial general liability (CGL) insurance policies provide coverage for damages the policyholder is legally obligated to pay because of property damage or bodily injury caused by an “occurrence.” CGL policies typically define “occurrence” as an “accident.” Courts define an accident as “an unexpected happening without an intention or design.” Auto-Owners Ins. Co. v. Harvey, 842 N.E.2d 1279, 1283 (Ind. 2006).   Simple, right? Unfortunately, a trilogy of cases from the Indiana Supreme Court have caused confusion on this issue, particularly where the policyholder may have errors and omissions (E&O) coverage.   In Harvey, a 16-year-old girl, Brandy, fell into a river and drowned after being intentionally pushed during an altercation with a boy, Toby. Toby admitted that he intended to push Brandy, but…

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15 Nov 2017 Tenth Circuit Holds that Governmental Investigation of Potential Criminal Violations is Not a ‘Claim’ Under a D&O Policy

  D&O insurance policies are key components of a corporation’s risk transfer portfolio, purchased to protect it against lawsuits presenting significant liability exposure to itself and its key officers and directors.   In recent years, as an alternative to targeted formal litigation and discovery in uncovering corporate wrongdoing, federal and state governments have increasingly utilized informal investigations. This trend has created an expensive new financial exposure in the business world, particularly for large corporations, which are often the targets of such inquiries, and corresponding questions about how D&O insurance policies cover such costs. Although many D&O policies have evolved to explicitly protect policyholders from the costs of responding to government investigations, many have not been amended, forcing courts to determine whether the existing language is…

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26 Jun 2017 Get Smart About Additional Insured Endorsements: Beware of the Proximate Cause Standard Recently Adopted in New York

  Businesses that give or receive “additional insured” endorsements may want to learn about a recent decision from the New York Court of Appeals.   Imagine this hypothetical scenario: Maxwell LLC hires Smart Corporation to do some excavation on Maxwell’s property. As required by their contract, Smart buys a commercial general liability (CGL) policy from Chaos Insurance Company with a standard endorsement saying that Maxwell is an additional insured with respect to injury or damage “caused, in whole or in part” by Smart’s acts or omissions. Maxwell doesn’t tell Smart that an electrical cable is buried in the excavation area, and Maxwell doesn’t turn the power off. Smart hits the live cable, and the ensuing explosion damages a nearby building owned by Control, Inc. Control…

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02 Jun 2017 Why Indemnification Provisions are Important

  In entering into contracts almost every day, businesses of all sizes and in all industries frequently flip right past the indemnification, insurance and limitation of liability provisions as mere boilerplate. These risk allocation provisions can be as important as price and other deal terms, yet many lawyers and contract managers don’t understand the pitfalls and opportunities they present.   If your job includes reviewing, drafting or negotiating contracts, you’ve probably seen these provisions. Are they boilerplate that you spend little time on? Do you fully understand exactly what they do? Do you negotiate or revise them? Read more here.   If you would like more information on indemnity clauses, Ken is presenting the following webinars:   Indemnification Provisions: When and How to Use Them…

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30 May 2017 Check Your Policy When an Insurer Says a Self-Insured Retention Applies to Its Duty to Defend

  Has your insurer informed you that, notwithstanding its duty to defend you under a third-party liability policy, it won’t start defending until and unless you satisfy a self-insured retention of a specified amount?   Don’t necessarily believe it. In fact, California law is clear that absent an expressly written policy provision stating that no duty to defend arises until and unless an insured meets a self-insured retention, satisfaction of such retention is not a condition precedent to an insurer’s duty to defend.  Indeed, as California courts have said, “in the absence of clear policy language so providing, to require the exhaustion of a self-insured retention before an insurer will have a duty to defend would be contrary to the reasonable expectations of the insured…

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27 Mar 2017 Bad Faith Isn’t the Only Remedy Court Sanctions Insurance Company for Factually Incorrect Declaratory Judgment Complaint

  State laws vary considerably in the standards and remedies for bad faith by an insurance company and also on whether a policyholder can recover attorneys’ fees for an insurance coverage dispute in the absence of bad faith. A recent Illinois case is a reminder that court sanctions can be another remedy for an insurer’s misconduct in coverage litigation.   In American Access Cas. Co. v. Alcauter, 2017 IL App (1st) 160775, the insurance company filed a declaratory judgment complaint against its policyholder, Alcauter, seeking to avoid coverage for a $10,000 judgment in an auto accident case because Alcauter breached his duty of cooperation by failing to attend the hearing in the accident case against him. In Illinois, the underlying plaintiff is often considered a…

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06 Mar 2017 Overcoming That Sinking Feeling Beating Earth Movement Exclusions in CGL Policies

  Co-authored by John Corbett and Andy Detherage.   The recent rainstorms in California rightly have been hailed as the end of a lengthy drought.  The inches of rain which fell in the span of a week have filled reservoirs and raised the water table in the parched ground.  Such a large volume of water, however, increases the danger of landslides in California’s notoriously unconsolidated hillsides and bluffs, and with it, the possibility of disputes over whether particular ground movement claims are covered by their liability policies.   Let’s look at a hypothetical example.  XYZ Construction is laying pipes under an existing street at the top of a bluff.  In the course of digging trenches to hold the pipes, one of XYZ’s diggers accidentally breaks…

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08 Feb 2017 Coverage for Commotion: Insurance for Businesses Affected By Rioting and Vandalism

  Businesses can endure substantial property damage and, perhaps more importantly, lost revenue from civil disruptions caused by rioting and vandalism. Fortunately, business owners have a multitude of coverage options for these disruptions and should firmly resist an insurer’s attempt to deny or limit coverage.   Assume you own the fictional pub “Paddy’s Pub” on Sunny Lane in South Philadelphia. One evening, South Philadelphia residents peacefully march down Sunny Lane in protest of the latest government budgeting decision. At some point, rioting and vandalism ensue and a few residents begin vandalizing businesses on Sunny Lane—including Paddy’s Pub. To contain the situation, the police department shuts down Sunny Lane for the remainder of the day. What coverage may be triggered?   Commercial Property Coverage: Upon first…

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07 Feb 2017 California Supreme Court Denies Insurance Industry’s Attempt to Deregulate Insurance in California

  On January 23, in Association of California Insurance Companies v. Dave Jones, the California Supreme Court rejected carriers’ attempt to deregulate the insurance industry in the state by stripping from the insurance commissioner much of the broad power to supervise insurer conduct. This case is a big win for policyholders.   The issue before the court was whether the California Department of Insurance can regulate the representations insurers make to their customers about the cost to replace a policyholder’s home. In 2010, the insurance commissioner promulgated a regulation — C.C.R. sec. 2695.183 — governing what an insurance underwriter must do in setting the replacement cost of a home when selling homeowners coverage. This was expressed as a series of tasks the carrier must perform…

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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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