Risk Management

March 28.2011

Japan’s Tragedy A Reminder To Review Your Business Interruption Coverage

The tragic events in Japan serve as a reminder of how fragile our lives and societies are. Businesses too can be fragile, and can be easily disrupted by events completely outside of our control. That’s one of the rationales behind commercial insurance. A little over a year ago, I wrote about the complexities and challenges of both purchasing, and making a claim on, business interruption insurance. (Business Interruption Coverage - 2/18/10) Because many US companies will be either directly or indirectly affected by the devastation in Japan, this is a good time to revisit that topic. US businesses that have...

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August 04.2010

Supreme Court of Delaware issued a decision in AT&T Corp. v. Faraday Capital Ltd.

When faced with a new complaint, an insured must sometimes confront the issue of whether the “interrelated wrongful acts” exclusion applies because of a claim already noticed during a prior policy year. The Supreme Court of Delaware issued a decision providing some assistance to insureds facing such a problem by affirming that each cause of action in a complaint may constitute a separate “claim” under claims-made insurance policies. In AT&T Corp. v. Faraday Capital Limited, 2007 WL 329218 (Del Feb. 5, 2007), AT&T sought coverage for two lawsuits filed against it in 2002. The issue was whether those suits were...

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July 28.2010

Insurance Coverage for Food Contamination Recall

Recalls of food believed to be contaminated can be massively expensive for the companies required to implement them, and the availability of insurance coverage for such expenses is often disputed. One recent complaint to raise this issue is Employers Fire Insurance Company v. Basic Food Flavors, Inc., filed on July 7, 2010 in the United States District Court for the District of Nevada. In that action, Employers Fire seeks a declaration that its policy “contain[s] certain terms, provisions, limits, conditions, exclusions and endorsements that limit or preclude coverage to Basic Food with respect to losses, costs or expenses incurred as...

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March 16.2010

Preparing for a Mediation Involving Coverage Issues

Adequate preparation is essential for any mediation, and mediations involving insurance coverage issues are no exception. Whether the focus of the mediation is the insurance coverage dispute itself, or whether the insurer is attending a mediation of the underlying action (with an expectation that it will fund any settlement), the insured can and should take certain steps to ensure a more productive session. 1) Select the right mediator Only the attorneys handling the case can judge which mediator has the right style and temperament to handle their specific matter. An additional consideration, however, should be whether the mediator has some...

Read the Article | Comments (4) | TrackBack | Posted in Construction Insurance, D & O, General Liability Policies, Intellectual Property Claims, Pollution Claims, Property Insurance, Risk Management

March 11.2010

Kemper Finally Close to Liquidation?

Kemper has been on the brink of insolvency for years. It may have finally reached the end of its runway. Last week, Kemper disclosed its most recent financials, which show that very little cash is left in its two major member companies, raising the specter that it may finally be placed into a liquidation proceeding. Policyholders should be aware of the ramifications of a Kemper liquidation and take steps, if possible, to mitigate the impact a Kemper liquidation could have on their businesses. Kemper has been operating under a run-off plan administered by the Illinois Department of Insurance since 2004....

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March 18.2009

Insureds Rights Under Insurer "Litigation Guidelines"

A lawsuit is filed, the defendant gives notice to the insurers, and in the meantime engages counsel to start the defense. Several rounds of coverage opinion letters go back and forth, and finally – the insurer accepts the defense of the lawsuit (usually subject to a reservation of rights). Meanwhile, defense counsel has been doing his or her job. So surely, now all is well. Defense bills incurred before the insurer agreed to defend are submitted for reimbursement. But then the insurer’s “litigation guidelines” arrive – explaining just how much of the insured’s defense the carrier will NOT pay for....

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March 04.2009

Coverage for Implicit Disparagement of Another’s Products

Disputes over intellectual property that include allegations of anti-competitive conduct may raise a potential for insurance coverage. Common allegations in this context which can trigger a duty to defend under the “personal injury” or “advertising injury” coverages found in the standard CGL policy include disparagement of another’s products. A recent decision by Judge James Ware in the Northern District of California held that allegations of implicit disparagement of a competitor’s products create a potential for coverage. In E.piphany, Inc. v. St. Paul Fire & Marine Ins. Co. (N.D. Cal. Dec. 16, 2008), false representations by an insured concerning only its...

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