All posts by Mark Miller

Insurance Broker RFPs

Insurance broker RFPs are one of the best ways for corporations to select qualified insurance brokers. The practice of using RFPs for the selection of insurance brokers, however, is underutilized, and, even when used, it does not always provide meaningful information. Typical RFPs elicit a canned marketing presentation and lots of glad-handing. Interesting, perhaps, but certainly not the best way to test broker abilities and approach.

The best way to keep brokers moving in a direction that is consistent with corporate interests is to have perspective brokers submit RFPs every several years. The problem with most insurance broker RFPs is that they seldom get to the issue of how good brokers are at placing coverage or assisting with respect to claims. To get this kind of information, RFPs need to be specifically targeted at current insurance issues.

To be useful, broker RFP questions need to be targeted. From an insurance law standpoint, questions should be designed to address three critical issues. First, how the insurance broker addresses important insurance policy language issues. Second, how the broker deals with insurance provisions that are one sided towards insurance company interests. And, third, how hard the broker pushes for policyholder (as opposed to insurer) interests.

The following select questions, for a technology company insurance broker RFP, gives an idea of just how specific RFP question need to be to elicit an appropriate response:

SAMPLE INSURANCE BROKER RFP QUESTIONS
TECHNOLOGY COMPANY

For Discussion Purposes Only
Not to Be Used Without Prior
Consent of Miller Friel, PLLC

I. Commercial General Liability

Please provide examples of the best advertising injury language you have secured for a company like [INSERT CLIENT NAME], and your opinion on whether or not you will be able to achieve similar results for [INSERT CLIENT NAME].
Examples in policies of this kind where you have been able to secure patent coverage; same for trademark.
Please provide examples of the best data and software coverage language you have been able to obtain for clients.

II. Technology Errors and Omissions

Examples of the best technology policies you have secured for clients, and things that you would improve with respect to that language.
Please provide examples of how you have secured coverage for false advertising.
Examples of whether you have secured coverage under such policies for patent claims.

III. Directors and Officers Liability

Please provide examples of the best definition of “Claim” language that you have been able to secure for clients.
Please give examples of how this language was found to cover governmental investigations.
Please provide examples of the best definition of “Loss” language that you have been able to secure for clients.
Please provide examples of how this definition of “Loss” language was found to cover fines and penalties assessed against the policyholder.
Please provide examples of how you have narrowed the scope of the bump up exception to the definition of “Loss” to avoid potential application to traditional fiduciary duty claims.
Please provide the best punitive damages coverage language that you have been able to secure for clients.

IV. Claims-Made Coverage Generally (D&O, E&O)

Please provide examples of the best interrelated wrongful acts language that you have secured for clients.
Please provide examples of the best prior-notice exclusions that you have secured for other clients.
Please provide examples of the best prior-knowledge exclusions you have been able to secure for clients.
Please provide examples of the best prior-claim notice language that you have secured for other clients.
Please explain how you structure such interrelated wrongful acts, prior-notice, and prior claim exclusionary language so that insurers cannot claim that neither current nor past policies cover otherwise covered claims.
Please provide examples of the best conduct exclusions you have been able to secure for clients.
Please provide your position on whether applications are necessary for renewal policies, and examples of when you have instructed insurers that applications are not warranted.
Please provide examples of when you have revised standard-form application language to protect the insured.
Please provide examples of situations where you have had insurers waive warranty requirements; please provide examples of the same when coverage was new (not renewal coverage).
Examples of when you have challenged prior and pending dates proposed by an insurer, and the outcome of such challenge.

V. Other

Your recommendations on the best additional time-element provisions for [INSERT CLIENT NAME], with examples (including extra expense, royalties, contingent time element, interruption by villi or military authority, ingress/egress, extended period of indemnity).
Please provide examples of how you have revised exclusions in policies to make certain that all terrorism related activities under TRIA for certified acts of terrorism are covered, including dirty bombs and bio-terrorism.
Please confirm that you will be able to secure pre-approval of defense counsel, by endorsement, for the following law firms: [INSERT NAMES OF PREFERED DEFENSE COUNSEL].
Please provide examples of the best endorsements you have secured for clients providing for approval of pre-selected defense counsel, and identify what, if anything, additional you recommend adding to such endorsements.
Please provide examples of the best hourly rates you have been able to secure for defense counsel.
Please provide examples of how you have worked with coverage counsel both in litigation and pre-litigation to resolve claims.
Please provide your recommended course of action to preserve legal privilege for discussions you may have with for [INSERT CLIENT NAME] concerning claims.
Please provide examples of insurers pressuring your firm with respect to a policyholder claim, and how you dealt with it, and whether your firm will take similar action with respect to [INSERT CLIENT NAME].
Please provide your examples of situations where you have challenged arbitration language in an insurance policy prior to issuance, and the outcome of such challenge.
Please provide examples of the best ADR provisions you have secured for clients, and why you believe that such language is advantageous.
Please provide examples of the best warranty language that you have been able to secure for clients.

Most RFPs will contain what the insurance broker believes are their strongest selling points, like, how much coverage they place. who their clients are, their great relationships with insurers, and the fact that they have claims people on staff. This information will be provided even without an REP. RFP questions should be designed to address something more. In the insurance context, that more is how well the broker pushes issues to benefit the policyholder.

Posted By Mark Miller on June 11, 2018 | permalink | trackbacks(43)

Top Ten Insurance Recovery Issues For Corporate Policyholders

More now, than any other time that we can remember, policyholders in corporate insurance recovery cases seem to be getting it wrong. Policyholders are losing corporate insurance recovery cases that they deserve to win. As we study insurance coverage decisions, we cannot help but notice the cause of the problem: policyholders are either being given bad advice, or they are making critical preventable mistakes. This is the reason why we developed this Top Ten List of Insurance Issues for Non-Insurance Lawyers.

First, a little background into the problem. Lawyers are critically important to corporate policyholders, both with respect to advising on claims, but also with respect to reviewing coverage. Lawyers, whether in house, or at an outside law firm, are some of the first to become aware of potential claims. Ever evolving insurance coverage case law, a complex statutory overlay governing insurer conduct, and incomprehensible insurance jargon, can make it difficult for lawyers to obtain straightforward answers to insurance problems. Fortunately, a little knowledge goes a long way towards preventing corporate policyholder missteps.

As history has shown, it is not all that easy to obtain accurate advice on corporate insurance issues. As most partners at large prestigious law firms know, insurance ties with the legal industry are are vast and complex. Arrangements between law firms and insurance carriers to control corporate insurance claims are widespread. Most large law firms represent insurance carriers in some capacity, and rules of engagement with insurers are often adopted to keep insurance company business, and to minimize law firm financial backlash from insurers when they pursue corporate insurance claims. These rules of engagement may include, among other things, a prohibition on filing bad faith lawsuits, limitations on discovery against insurers, and an understanding, that if things get rough, strings will be pulled to pull off the attack dogs.

Non-insurance lawyers looking into insurance claims should also be aware that insurance brokers face similar challenges. Any good insurance broker will admit that they are walking a find line when it comes to providing advice on corporate insurance claims. Insurance brokers are typically paid by insurers, and, in many instances, they are financially rewarded based on losses paid on their accounts. They make more if their client-policyholders do not make claims. As a result, their first reaction may be not to tender a claim, or to try and convince a policyholder that a claim is not covered. If a policyholder persists, the next step that brokers use to manage the claims process is to involve their in-house claims advocacy group. These in-house claims advocacy groups serve the purpose of managing client expectations by helping them align policyholder client beliefs with insurer demands. Communications with broker claims advocacy lawyers, however, are likely not privileged, and given their goal of compromising claims, they oftentimes create smoking gun documents that can seriously harm a policyholder’s coverage position.

Non-insurance lawyers should should take these considerations into account. Many a policyholder has been persuaded by an insurance company lawyer or insurance broker to compromise a claim, or worse yet, to drop a claim that an insurer is passionate about denying. Independent accurate claims advice is difficult to find.

Top Ten Insurance Recovery Issues For Corporate Policyholders

Our top ten list of insurance recovery topics for non-insurance lawyers includes:

Notice,
Defense Costs,
Government Investigations,
Independent Investigations,
Cyber/Intellectual Property Claims,
D&O Insurance Terms and Conditions,
Post-Merger Acquisition Claims,
Rescission,
Criminal Activities, and
Privilege.

1. Notice

Insurance policy notice provisions are often treacherous for policyholders, but with proper analysis, coverage can be preserved.

2. Defense Costs

The second issue in our continuing analysis of the top ten insurance issues for non-insurance lawyers is the full recovery of defense costs. Insurance carriers make it difficult for policyholders to get a fair read on coverage.

3. Governmental Investigations

More often than not, governmental investigations are covered.

4. Independent Investigations

Insurance Recovery Issues For Corporate Policyholders

The fourth topic in our list of Top Insurance Issues for Non-Insurance Lawyers is coverage for so-called voluntary or independent investigations.

5. Cyber and Intellectual Property (IP) Claims

Insurance Recovery Issues For Corporate Policyholders

In this video, we address an oftentimes overlooked area of coverage, that is, coverage for cyber and intellectual property claims under general liability insurance policies. Don’t overlook “advertising injury” coverage provided in general liability insurance policies.

6. D&O Insurance Policy Terms and Conditions

Sophisticated organizations routinely engage outside counsel to review their Directors and Officers liability insurance policies. If done correctly, it can result in vastly superior coverage. But, relying on standard forms and pre-drafted policy enhancements can be a recipe for disaster.

7. Post-Merger/Acquisition Claims

Corporate acquisitions and spin-offs are common. Most people involved in corporate acquisitions are aware of the concept of tail coverage, but certain things need to be done to a tail policy if an acquiring organization intends to pursue coverage.

8. Rescission of Insurance Policies

In the last ten years, there has been an explosion of rescission claims by insurers. More and more, insurers are asserting rescission as an additional reason for denial of coverage. In reality, rescission is a drastic remedy that has no place in insurance law.

9. Insurance Coverage For Criminal Activities

Many non-insurance lawyers assume that criminal activities are not covered by insurance; in fact, the exact opposite is true.

10. Privilege

In our final installment of the Top Ten Insurance Issues For Non-Insurance Lawyers we address the issue of privilege. Case law addressing insurance broker communications has not ended well for policyholders, but steps can be taken to minimize adverse results.

Questions About Corporate Insurance Recovery

Over the years, insurance recovery law has become highly specialized. The nuances of insurance law may fall outside the scope of in-house or outside counsel expertise. Knowing what questions to ask can go a long way towards identifying key insurance issues and preventing needless insurance-related mistakes

We hope that this series was helpful. If you have any questions about these or any other corporate insurance coverage issues, please feel free to contact us.

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Posted By Mark Miller on July 27, 2017 | permalink | trackbacks(43)

Insurance Coverage for Employment Practices Liability Claims

In today’s blog post, we address the key Employment Practices Liability insurance (“EPLI”) issues. These include considerations that corporate policyholders should keep in mind when purchasing or making claims under EPLI insurance policies. On the front end, ensuring adequate coverage for EPLI claims starts when coverage is placed. Considerations there include defense cost carve outs in certain exclusions, and the inclusion of Duty to Advance defense cost provisions. On the back end, a claim must be carefully analyzed to maximize the full extent of coverage.

Please watch the video to learn more.

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Posted By Mark Miller on April 20, 2017 | permalink | trackbacks(43)

Policyholder Guide to the Recoupment of Defense Costs

In today’s blog post, we address an alarming insurance trend, namely, the increased frequency of insurance companies seeking to recoup defense costs under duty to defend insurance policies. Even more alarming is the fact that a right to reimbursement doesn’t typically exist, unless the insurance carrier does certain things, and the policyholder fails to properly object. Policyholders should apply the strategies discussed herein from the moment they receive a reservation of rights letter. Although the deck is stacked against insurance carriers when it comes to the recoupment of defense costs, policyholders can turn a good situation into a potential problem. Please watch the video to learn more.

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Posted By Mark Miller on April 18, 2017 | permalink | trackbacks(43)

Insurance Coverage for False Advertising Claims

In today’s blog post, we address how policyholders can secure insurance coverage for false advertising claims under Director and Officer insurance policies. Using a real-life example, we address a situation where a series of D&O insurers wrongfully denied coverage for numerous false advertising claims. There, the policyholder faced potential liability for the underlying false advertising claims, and looked to their existing private company D&O insurance policies for coverage. In turn, the insurance carriers asserted that a professional services exclusion in the policy precluded coverage. In the end, the insurance carriers paid the claim, but they would not have done so unless appropriate insurance recovery strategies were employed.

Please watch the video to learn more.

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Posted By Mark Miller on April 13, 2017 | permalink | trackbacks(43)

Five Things You Need To Know About Excess Insurance Policies

In this video we discuss the five most important excess insurance policy issues that every corporate policyholder should consider. Excess insurance is not always given proper consideration, because, after all, most excess policies “follow form” to primary insurance. Conventional insurance wisdom says, if primary insurance language is great, then excess insurance policy language should also be great. That, however, is often not the case.

We analyze why excess insurance is different from primary insurance, pointing out the five most important things that corporate policyholders need to be aware of with respect to excess insurance:

1. the excess policy exhaustion language issue;

1. the Swiss cheese ADR provision issue;

1. the “follow form” after inception issue;

1. the “follow form” to what policy issue: and

the ever present notice issue.

In this video we provide a deeper explanation of these topics and more. Please watch the video to learn more about how to spot the most common excess insurance problems faced by corporate policyholders.

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Posted By Mark Miller on December 16, 2016 | permalink | trackbacks(43)

Business Checklist To Maximize Hurricane Insurance

When a business suffers damage from a major hurricane or storm, most or all of its losses should be covered by traditional property insurance. Although this kind of Hurricane Insurance is pervasive, navigating claims can be exceedingly difficult. And, given the advice the insurance industry gives about property insurance, it is no surprise that many policyholders are conditioned to minimize rather than maximize coverage. To maximize insurance coverage, businesses need to take certain steps.

Business Checklist for Hurricane Insurance — Hurricane insurance is part of most traditional “All Risk” property insurance policies

A Hurricane Insurance Checklist for Business

After a hurricane or storm, businesses should take the following steps:

1. Give Notice to Applicable Insurance Companies. A business should provide immediate notice to its insurance carriers. In a worst case scenario, the lack of notice could result in losing all coverage. Coverage counsel can help you decide which policies may provide coverage so that proper notice can be sent.

2. Mitigate Loss; Preserve Evidence. Serious storm damage needs to be cleaned up immediately for both business and insurance reasons. For a business, it needs to get back to work. From an insurance perspective, a policyholder needs to mitigate its loss or risk. Ideally, the quick cleanup actions and immediate repairs will be coordinated with the insurance adjuster, as the insurance carrier is obligated to pay for those immediate repair costs. Sometimes, however, a business must act before the adjuster is available or willing to view the damage. In that situation, the business should preserve evidence through photographs and videos.

3. Keep a Record of Communications with the Insurer. Keeping a written record of communications with the insurance adjuster is important for two reasons. First, it will help you keep track of what both policyholder and the insurer need to do and make sure each side is on the same page. Second, it will make it harder for an adjuster to abandon an oral commitment made, which sometimes happens when that commitment ends up costing the insurer more than anticipated.

4. Fully Assess Damage and Hire Needed Experts. Although damage from a storm may seem obvious, there may be a lot more damage than is initially apparent. In order to maximize coverage, a business should make sure it assess all physical damage and lost business income it has suffered. That full assessment often means that a business must hire experts to help with the claim, including engineers, accountants, and coverage lawyers. Most or all of these expert services are covered under the insurance policy as well.

5. Don’t Miss Deadlines. Insurance policies contain numerous time deadlines that can be traps for businesses. For example, most policies contain a specific deadline, such as 60 days, to submit a sworn proof of loss to the insurer. If a business misses that deadline, it may lose coverage. Coverage counsel can help keep track of deadlines and obtain extensions as needed.

6. Request Partial Payments and Advances as Needed. Often, a business needs insurance funds for cleanup and repair before the insurer has made a final determination on the claim. In those situations, a business can obtain a partial payment or advance on its insurance claim. However, to avoid potential traps in these situations, such as when an insurer may seek a broader release than the scope of its payment, coverage counsel should be consulted.

7. Don’t Accept Less Coverage Than You’re Entitled. Full or partial denials of coverage should not cause a business to give up on its coverage. Without well-reasoned push back from policyholders, significant insurance proceeds are left at the table. Consult with experienced coverage counsel, and don’t accept no for an answer.

Maximizing Hurricane Insurance Coverage

Property insurance claims are difficult to manage. While Insurance industry jargon and insurance industry custom and practice have evolved towards minimizing coverage, the law and policy language typically favor a maximization of coverage. In the end, the most important part of any claim is to conduct a legal analysis of coverage.

For more on this topic, please see Property Insurance – The Value of a Second Look; What 17^th Century Piracy Teaches Us About Property Insurance; Five Things You Need To Know About Property Insurance Part 1 (The Property Insurance Claims) Minefield), Part 2 (Presentation of the Claim), Part 3 (Insurance Company Accountants), Part 4 (Most Claims Settle), Part 5 (Know the Law); History’s Best Property Insurance Decisions (Fountain Powerboat); The Real Value of Property Insurance (Covering Business Income Loss).

Posted By Mark Miller on October 12, 2016 | permalink | trackbacks(43)

When Should You Sue Your Insurance Carrier – An FCPA Investigation Case Study

Insurance carriers litigate for a living, and are oftentimes planning a proactive lawsuit before a policyholder even hires coverage counsel. Nonetheless, businesses with large insurance claims are typically skeptical of suing insurance carriers.

This video addresses a concrete example of how to use litigation to maximize claim value. Here, a lawsuit was filed, and within weeks the insurance carrier was talking settlement. To learn more, please watch the video.

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Posted By Mark Miller on September 15, 2016 | permalink | trackbacks(43)

Insurance Recovery Law: History’s Best Decisions: The Brillhart Decision

The next case in our series Insurance Recovery Law: History’s Best Decisions turns back the clock to 1942 for the Brillhart decision. Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491 (1942). Although decided in 1942, Brillhart is extremely valuable today..

Nowadays, corporate policyholders are facing an all-to-common scenario. When a business tenders a claim, an insurance carrier should evaluate the claim, and provide a defense. Many insurers have abandoned this approach for a more adversarial route. With those insurers, rather than providing a defense, they sue seeking a declaration of no coverage. Their strategy is to sue when the corporate policyholder is weakest, and that time is typically just after the corporate policyholder has been sued in an underlying lawsuit. Favorite forum for these insurers, Federal Court.

If the rash of insurer-filed declaratory judgment lawsuits are the epidemic, Brillhart is the cure. In reality, insurance coverage lawsuits have no business in federal court, and Brillhart sets the standard for the doctrine of abstention, which provides a mechanism for dismissing insurance company filed federal Court declaratory judgment actions.

In today’s video, Mark Miller explains how this often overlooked doctrine can be used to help policyholders.

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Posted By Mark Miller on September 13, 2016 | permalink | trackbacks(43)

Insurance Recovery Law: History’s Best Decisions: The Penford Case

Our next case in our series “Insurance Recovery Law: History’s Best Decisions” is the Penford case from 2011. See Penford Corp. v. National Union Fire Ins. Co. of Pittsburgh, Pa., 662 F.3d 497 (8th Cir. 2011). Although this case had a tragic outcome, it illustrates what not to do in the corporate insurance arena.

In Penford, after years of litigation, the insurance broker lost the case. If case was a one-off situation, one could understand a mistake being made. We highlight this case, however, because the way Penford and its broker handled this claim, is similar to the way that many claims are handled today.

The problems in Penford are raised whenever an insurance broker attempts to act as a claims advocate. Watch the video to understand what happened, and to devise a plan that properly utilizes insurance broker expertise and contacts to settle a claim.

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Posted By Mark Miller on September 8, 2016 | permalink | trackbacks(43)