Today we continue our series, Insurance Issues For Non-Insurance Lawyers, with the topic of insurance coverage for Governmental Investigations. A series of federal government agencies have the authority and mandate to conduct investigations and bring enforcement actions, including DOJ, SEC, CFPB, OCC, and FinCEN. In addition, state agencies and attorneys general may also may conduct investigations. These investigations can last many years. The average time to conclude a FCPA claim is now more than 7 years. In addition, these investigations can result in enforcement actions, especially if the target does not cooperate and settle. The DOJ, alone, recovered $5.69 billion in FCA claims in FY2014, and more than 700 whistleblower suits are filed each year.
The cost to companies defending against these investigations can be astronomical and appears to increasing over time. During the last decade, it was reported that Allergan spent “only” $7.4 million responding to a DOJ investigation. More recently, it was reported that Avon spent $344 million responding to an FCPA claim, Walmart spent more than $600 million, and Siemans spent more than $1 billion in connection with an investigation. Even smaller investigations can easily cost companies several million dollars, with e-discovery costs alone reaching from several hundred thousands of dollars to well over a million.
Yet, Insurance is often overlooked as a resource to pay for the cost of governmental investigations.
In this video, Miller Friel attorney Mark Miller walks us through the most important insurance issues that need to be considered when faced with a governmental investigation. Questions such as what policies to consider, and how and when to give notice are discussed. In addition, broad legal support for the proposition that insurance covers governmental investigations is addressed. Additional resources on the topic of insurance coverage for governmental investigations include: Insurance Coverage for Government Invesitgations Presentation; Insurance Coverage for Government Investigations Video; and Insurance Coverage for Government Investigations the Trend for Coverage Continues.
Watch the video to learn a lot more about why governmental investigations rank as number three on our list of insurance issues for non-insurance lawyers. If, after you have watched the video, you have any questions or need guidance, please give us a call at 202-760-3160.
To see the whole series, check out Top Ten Insurance Recovery Issues For Non-Insurance Lawyers.