shutterstock_226730068_Insurance ChecklistErica Villanueva and Tyler Gerking will be presenting to the Association of Corporate Counsel (ACC) on September 14 (in San Francisco) and 15 (in Palo Alto) about private company D&O liability insurance, also known as management liability insurance. Below is a description of the program, which will touch on hot issues that many companies are dealing with right now. Use the links to view the event details and register online.

Private D&O Insurance:  Things You Should Know

September 14 – San Francisco

September 15 – Palo Alto

Companies are staying private longer and purchasing private company directors’ and officers’ liability (D&O) insurance, sometimes known as “Management Liability” insurance. When it comes to D&O coverage, most private companies focus on two things: obtaining it, and keeping the premium low. When a company faces a claim, however, it discovers there is much more complexity to private D&O insurance, and often broader coverage than a public company D&O policy. Accessing and maximizing the available coverage may require a concerted, strategic effort on the part of  the company,  its insurance broker, and  insurance coverage counsel. This program will cover:

  • Key features of management liability policies
  • Common exclusions and limitations
  • The practical impact of certain clauses – and widely-available coverage enhancements that can mitigate these impacts
  • Implications of common pitfalls and mistakes in reporting and managing claims’”

shutterstock_113739760-Protection Level HighDirectors’ and officers’ liability insurance is a key resource for funding defense and settlement of claims without depleting the insureds’ assets. Private company D&O insurance, in particular, can provide exceptionally broad coverage to the company, its individual directors, officers, and sometimes even employees against shareholder litigation and derivative actions, criminal and regulatory investigations, and other business litigation claims based on negligence or breach of duty theories.

This article I wrote for VC-List presents guidelines and key policy features to ensure that the PC’s insurance provides meaningful protection to the board members and the private equity or venture capital firm.

You can read the full article on VC-List‘s website.  Click here.

 

shutterstock_223838977 Are You ReadyIt’s a good time to insulate your wine business against getting burned or shaken up in a disaster.

The California wildfire season is well underway. Only a year ago, the Lake County fire destroyed hundreds of homes, thousands of acres and threatened vineyards and wineries. A recent report on climate change predicts that wildfires in the western U.S. and Canada will become more frequent and severe. And the Napa earthquake — only two years ago as of Aug. 24 — reminded us of another constant danger for California residents and businesses, particularly those with costly products like wine in tanks, barrels and bottles.

In the face of these risks, you can take steps now to be sure you have the right insurance and are prepared to get the most out of it if the worst happens.

Continue Reading Insurance for Wildfires and Other Natural Disasters

shutterstock_158233841_Are You Covered

One of the most heavily-litigated exclusions in modern insurance coverage practice was the subject of a recent district court decision involving allegedly misleading marketing by for-profit colleges. Exclusions for claims or occurrences arising out of acts done in connection with the “rendering of, or actual or alleged failure to render, any professional services for others” – the so-called professional services exclusion – is the source of endless disputes between insurers and insureds. There are a number of reasons for this; the exclusion is somewhat vague and has been interpreted in varying ways across and even within different jurisdictions.

What has made the exclusion so troubling for policyholders is the fact that its scope and reach has been expanded so far beyond its initial underwriting purposes. The exclusion commonly appears in Commercial General Liability and D&O policies, and its intent is to exclude underlying claims that should be covered by Errors & Omissions policies. A CGL policy is not intended to cover claims for an attorney’s malpractice during litigation or an architect’s negligence in designing a building, and the professional services exclusion is included in those policies to make that clear. Continue Reading District Court Further Limits Application of Professional Services Exclusion

The crash of a vehicle operating in semi-autonomous or fully autonomous mode presents a headline-grabbing opportunity to question the technology and the pace at which it is being introduced. Every accident resulting in injury or death is a tragedy. In the case of new technology that offers the possibility of dramatically reducing the total number of injuries and deaths, it will be important to look at any individual crash in the context of the overall promise of the technology. For example, it will be important to know how many miles of autonomous driving took place before the first crash occurred and compare that to ordinary cars, where the national average is one fatality every 94 million miles, and the worldwide average is a fatality every 60 million miles.

For our purposes, a crash also presents a scenario for how liability and insurance issues may play out as these cars and trucks start appearing on the road in greater numbers. We’ll walk through what won’t change, and the few things that might. Continue Reading Autonomous Vehicles: A Case Study of Liability and Insurance

Under a ruling this week from the California Insurance Commissioner, your company may be insured under an unenforceable workers’ compensation program. You may also be entitled to a refund of premiums paid to California Insurance Company (CIC) and Applied Underwriters (Applied), two Berkshire Hathaway subsidiaries.

Our April 19, 2016 post discussed a decision from the California Department of Insurance finding that the EquityComp workers’ compensation program sold to Shasta Linen Supply by CIC and Applied is void as an unfiled collateral agreement. CIC appealed the administrative law judge’s decision finding the program void. Shasta appealed the denial of its claim for reimbursement of all sums in excess of actual claims paid. On June 20, 2016, the California Insurance Commissioner affirmed the ALJ’s decisions. Continue Reading UPDATE: Is Your Workers’ Compensation Program Unlawful?

Employers continue to face a wave of lawsuits alleging violations of various “wage and hour” statutes (overtime pay, meal and rest breaks, etc.).  Employment liability insurers have uniformly denied coverage for these claims and have tightened applicable exclusions.  Some insurers now offer wage and hour coverage, but these policies and endorsements usually provide only very restricted defense cost coverage.  A new source of coverage now exists, courtesy not of insurers but of revisions to the California Labor Code.

New Labor Code §558.1, effective January 1, 2016, appears to create individual liability for violation of California’s wage and hour statutes.  Continue Reading New Law May Create Coverage for Wage and Hour Claims

Law firms are important gatekeepers between cybercriminals and clients’ sensitive data. The release of the Panama Papers and several other recent high-profile breaches have brought to light vulnerabilities in law firm cyber security.

I recently participated in a podcast with journalist Ben Hammersley and eSentire’s VP and industry security strategist Mark Sangster. Our discussion focused on cyber risks that law firms face and risk mitigation strategies to protect themselves and the data they hold, including cyber insurance.

Listen to the podcast here

When a venture capital or private equity firm invests in a portfolio company (PC) and places a general partner on the PC’s board, they typically require that the PC agree to defend and indemnify the board member in any litigation arising out of their board service, and to purchase directors’ and officers’ liability insurance. However, the D&O insurance requirements are typically quite vague, and some firms may be surprised to learn of key gaps in the PC’s coverage. These gaps are usually discovered when the VC/PE firm needs the coverage most – i.e., after a lawsuit has been filed, naming their board member as a defendant. Here are two examples I’ve come across in representing venture capital and private equity firms: Continue Reading Do You Know What’s In Your Portfolio Company’s D&O Insurance?

A popular workers compensation insurance program offered by Berkshire Hathaway subsidiaries Applied Underwriters Captive Risk Assurance Company (Applied Underwriters) and California Insurance Company may be in trouble. On January 21, 2016, the California Insurance Commissioner adopted an administrative decision finding that a critical piece of the program had not been submitted for approval and was therefore void. Any company now insured under this program should carefully monitor developments and consider alternative options for workers compensation insurance. Continue Reading Is Your Workers Compensation Program Unlawful?