Decisions invalidating insurance coverage because of mistakes made by policyholders should be the rare exception. Unfortunately, it is not uncommon for courts to invalidate or greatly diminish coverage because of avoidable policyholder mistakes. Even more disturbing, many of these negative insurance coverage decisions involve sophisticated corporate policyholders and reputable insurance brokers. For whatever reason, the status quo with insurance is not working for policyholders. Policyholders are getting bad advice, and that advice is adversely impacting corporate financials.
A part of the solution is for businesses to devote resources and expertise towards preserving insurance coverage. To do this effectively, it is helpful for in-house counsel and defense attorneys to understand some of the insurance issues they may face both before and after a claim has been made.
In this program, we cover ten insurance issues that may not be fully appreciated by corporate counsel, defense counsel, and the insurance brokerage community. The analysis presented addresses best practices for businesses, outlines some of the ever-increasing number of landmines presented in the fine print of current business insurance policies, and touches on the ever-changing landscape of case law addressing critical insurance policy provisions. The goal of the program is to educate non-insurance lawyers so that they can recognize and prevent some of the most common insurance problems encountered.
The top ten insurance coverage issues are:
- Notice – Insurance policy notice provisions have become treacherous for policyholders, and recent case law has not been policyholder or insurance broker friendly. With proper analysis, coverage can be preserved.
- Defense Costs – When addressing covered defense costs, Insurer tricks are common. From legal conflicts of interest with defense counsel to insurance company insurance broker advocates, it can be difficult for policyholders to get a fair read on what exactly insurance carriers are required to pay.
- Government Investigations – More often than not, governmental investigations are covered, but navigating insurance issues arising out of coverage for governmental investigations can be difficult. To take advantage of coverage, policyholders need to consider insurance issues the moment defense counsel is hired.
- Independent Investigations – Insurers routinely deny coverage for independent investigations, despite the fact that many insurance policies provide express coverage for the investigation of potential claims.
- Cyber / Intellectual Property Claims – Don’t overlook “advertising injury” coverage provided in most general liability insurance policies.
- D&O Insurance – Although D&O coverage can present some of the broadest coverage available to an organization, state of the art D&O coverage is far from the norm. Relying on off-the-shelf forms and pre-drafted policy enhancements can be a recipe for disaster.
- Post Merger / Acquisition Claims – Larger organizations can often rely on predecessor insurance, but to do so, predecessor policies need to be endorsed properly at the time of acquisition.
- Rescission – Insurers can’t seem to handle a claim nowadays without asserting that the policies are invalid and should be rescinded. The legal realities of rescission, though, are far different from what is being espoused by insurers.
- Criminal Activities – The general sense of most non-insurance lawyers we have spoken with, is that criminal activities are not covered under insurance. In fact, the exact opposite is true. Criminal allegations are generally covered, at least until the alleged wrongful conduct has been proven.
- Privilege – Legitimate privileged communications must be preserved. Although recent case law addressing insurance broker communications has not ended well, steps can be taken to minimize such onerous results.
The full presentation is available on West LegalEdcenter (search insurance) or through HB Litigation Conferences. Course handouts for the presentation Top Ten Insurance Presentation 06-04-15 are available here.
Miller Friel, PLLC is a specialized insurance coverage law firm whose sole purpose is to help corporate clients maximize their insurance coverage. Our Focus of exclusively representing policyholders, combined with our extensive Experience in the area of insurance law, leads to greater efficiency, lower costs and better Results. Further discussion and analysis of insurance coverage issues impacting policyholders can be found in our Miller Friel Insurance Coverage Blog and our 7 Tips for Maximizing Coverage series. For additional information about this post, please email or call Mark Miller (MillerM@MillerFriel.com, 202-760-3161).
To see the whole series, check out Top Ten Insurance Recovery Issues For Non-Insurance Lawyers.