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David Smith specializes in insurance coverage law, focusing on insurance claim preparation and presentation.   Mr. Smith also works on the negotiation of insurance claims and disputes on behalf of policyholders. Additionally, Mr. Smith works with the firm's insurance coverage attorneys in the areas of insurance industry policy drafting history, industry interpretation, and coverage intent. He also specializes in the identification and analysis of client's insurance policies that may provide coverage for a loss. This includes insurance archaeology - the piecing together of secondary evidence of lost policies to reconstruct historical records of clients' insurance programs.

Before worrying about an insurance claim, first ensure that you and your family, including pets and extended family, have their immediate needs met, particularly medical needs. When you are ready to begin the recovery process, we have outlined a few steps for you to take in working with your insurers to ensure that you receive the maximum benefits under any applicable policies. Continue Reading Steps and Resources to Recover Homeowner Insurance Benefits After a Fire: A Tip-Sheet for Homeowner / Small Business Insurance Claims

Are you Covered? note pinned to boardThis is part one of a two-part series looking at how court decisions in recent years have thwarted general contractors’ reasonable expectation of coverage under their general liability policies.

In early March, the Ninth Circuit Court of Appeals issued an unpublished opinion in Archer Western Contractors v. National Union, No. 15-55648 (filed Mar. 2 2017). The opinion held that the phrase “that particular part” as used in the “Damage to Property” exclusions in a CGL policy must be interpreted broadly to encompass “the entire project on which a general contractor is performing operations.” This is not the first time the Ninth Circuit has issued an unpublished opinion interpreting “that particular part” to apply to the entirety of a project.

The Ninth Circuit in these cases ignored the plain meaning of words that the insurance industry itself has explained should be construed in the narrowest possible sense. Policyholders, particularly general contractors, should beware this worrisome trend in the courts, as it is creating the potential for a gap in ongoing operations coverage that was not meant to exist. Continue Reading Courts Misunderstand the Meaning of “That Particular Part”

shutterstock_109214660-Cyber-Attack-BlogThe Internet of Things gives rise to many risks and exposures that companies and their insurers were not thinking about as recently as a couple years ago, and probably aren’t fully cognizant of today.

The DDoS attack late last week on internet infrastructure company Dyn should act as a wake-up call.  It shows how large and disruptive a cyber attack can become because of all the seemingly benign “things” connected to the internet.  And it should cause companies to think about what their risks really are and whether their current risk management approaches address them.

Just one example from this latest attack – I’m reading that one or more of the manufacturers of the devices that were used as bots in this attack must recall a very large number of products because the passwords (which were easily cracked) cannot be changed by the user.  The software that runs those products came ready installed on components bought from China, and it is this software that contains the vulnerability.  Now that the passwords are known, the devices can no longer be considered secure.  Maybe the manufacturers have product recall insurance or maybe they don’t.  But they likely never thought they would have to conduct a product recall under these circumstances and whether such a recall might be covered under their current insurance program.

Protect your company by:

  • Understanding your company’s IoT exposures.
  • Using your company’s broker and coverage counsel to review all insurance policies with IoT exposures in mind and negotiate favorable policy terms.
  • Revisiting the policies annually at renewal time because of quickly changing risks and policy terms.

In the December post Systemic Cyber Risks And The Internet of Things, we wrote about the increasing risk of cyber attacks on infrastructure and consumer products, and related insurance issues. We noted in that post that, while there have been a few cyber attacks on the Internet of Things (IoT) reported over the past few years, the number of such attacks was certain to grow. It has. Since our December post, several new attacks and developments have been publicly disclosed. These attacks again remind us that companies should evaluate their risks and exposures relating to the IoT and carefully negotiate their insurance policy renewals or purchases. Continue Reading Cyber Attacks on Infrastructure Are Increasing: Review Your Insurance As “Internet of Things” Risks Grow and Change

David Smith and I have recently been writing and speaking about cyber risks and cyber insurance for the wine industry. While many of the high-profile data security breaches in the news involve large public companies, all businesses that accept credit cards for payment and/or have personally identifiable information from employees or customers are at risk of a data security breach. This is the case even if the collection or storage of such information is handled by a third-party vendor. Businesses should carefully consider their cyber risks and whether cyber insurance could help them manage those risks. We’d like to share an article we recently wrote on protecting your wine business against data security breaches and other cyber risks: Protect Your Wine Business Against Data Security Breaches and Other Cyber Risks.

On December 16, 2015, the California Department of Motor Vehicles (CA DMV) issued draft regulations for the deployment (not just testing) of autonomous vehicles. When adopted, they may be the first such regulations in the country. The National Highway Transportation Safety Administration (NHTSA) is moving ahead with testing of self-driving technologies in anticipation of setting safety standards. Meanwhile, Google and virtually every major car manufacturer has stepped on the innovation gas pedal to develop self-driving technologies. Will regulators be ready when the cars are? How will the regulation of autonomous vehicles impact the liability landscape and, in turn, how that liability will be insured? Continue Reading Autonomous Vehicles – How Will Regulators Keep Up With The Technology?

Companies’ awareness of “cyber” risks has increased significantly because of large and highly publicized data security breaches, such as Target and Home Depot.  Companies are starting to more proactively manage the risk of data security breaches by strengthening their IT defenses and, in many cases, buying cyber insurance.  However, many do not realize that data security breaches are just the tip of the cyber-risk iceberg.  Because nearly our entire economic system depends on electronic devices, machinery and infrastructure that is connected to the internet (i.e., the “Internet of Things”), the potential exists for much larger scale hacking attacks that could control, damage, destroy or shut down many of the systems on which we rely to conduct business.  Some of this risk is covered by cyber insurance, but much of it is not.  Proactive and effective “Enterprise Risk Management” will be vital to companies seeking to protect themselves against these growing risks.  Businesses should carefully review their unique risk profiles, indemnity contracts and insurance policies (including their non-cyber “traditional” policies) to identify and mitigate their exposures.

We have all heard of the large scale attacks on Target, Home Depot and more recently, Ashley Madison.  The news generated by these cyber attacks has contributed to the public’s increasing awareness of the large volumes and types of personal information that companies are holding about their customers.  To protect themselves against some of the losses that such data security breaches may cause, many companies have prudently responded by buying “cyber insurance.” Continue Reading Systemic Cyber Risks And The Internet of Things

Toyota announced that it plans to invest $1 billion in a Silicon Valley research center for artificial intelligence (November 6, 2015). On November 10, Volkswagen said it had hired away from Apple its lead expert on self-driving cars. (Yes, Apple too has a secret car project.) While analysts’ views differ on when, most agree that it is only a matter of time before fully autonomous vehicles become mainstream.

The US Department of Transportation called recent innovations by car manufacturers a “revolution in safety.” Historically, automakers (strongly encouraged by insurers) have focused on engineering vehicles to enhance occupant protection in the event of a crash. That’s why automobiles today have a range of airbags – front, rear, side and even curtains – as well as a long list of safety enhancements, including structural reinforcements to the passenger compartments and advanced safety belts.

Today, vehicle safety has expanded into technologies that help prevent or mitigate crashes. Vehicles can automatically brake to avoid or minimize accidents, self correct steering if the driver wanders out of his or her lane, and can parallel park better than many humans. They do this by means of a variety of sensors, connected to a central computer running sophisticated software. By use of sensors and cameras, today’s modern car can “see” round corners, keep a steady (and safe) distance from the vehicle in front, and anticipate and prevent a crash. All of these technologies, though, still require an attentive driver with hands on the wheel.

Continue Reading Autonomous Vehicles (Part 2) – The Capabilities and Liabilities of Self-Driving Cars

Self-driving cars are coming.  In fact, Tesla Model S owners woke up on the morning of October 15, 2015 to discover that a software download to the cars has made them capable of steering and changing lanes at high speed, slowing and stopping, and self-parking, in “Autopilot” mode.  The future is now, and self-driving cars bring with them a host of unanswered questions relating to safety, liability, and the insurance for protecting against liability.

Over the next few months we’re going to produce a series of articles looking at issues affecting insurance raised by autonomous vehicles, and how those issues may develop and change as the degree of autonomy – and the number and types of autonomous vehicles on the roads – grows.  For many years the insurance industry has been a prime mover in the field of vehicle safety.  One of the main concepts behind the drive to develop autonomous vehicles is to reduce crashes, particularly ones that result in serious injury.  95% of fatalities from car crashes result from human error.  How will the insurance industry keep up, and how will it adapt to the changing scenarios?

Continue Reading Autonomous Vehicles – Where in the (Insurance) World Will They Go?

Last weekend’s Napa earthquake served as a wake-up call for everyone living and working in the Greater Bay Area. As with all natural disasters, after the immediate clean-up is over the analysis will begin as to how to make buildings safer and how to prevent and minimize injuries and damage.

But if you have a business that was affected by the earthquake, now is the time to be looking at your insurance policies, even while you are still sweeping up the debris and are wondering what the extent of the damage is.

If you have earthquake coverage, your insurance company can be an important resource. Insurers have experience handling disasters of all types. They have a large pool of consultants and experts who can help minimize the effect of the earthquake on your business – by providing resources to help with clean-up, estimating the extent of the damage, finding contractors quickly, and generally helping you through the crisis period.

However, insurance companies don’t know your business or your premises nearly as well as you do. Insurance adjusters – particularly in times of disasters when they are flooded with claims – will sometimes try to impose “cookie-cutter” solutions on unique situations. This could be especially true in the Wine Country, given the unique nature of the items damaged, such as historic buildings or high-quality wine. An area such as Napa, replete with wineries and specialty boutiques, restaurants and businesses, is ripe for coverage disputes over the value of damaged property, even after the scope of the damage has been agreed.

Continue Reading The Napa Earthquake – The Time To Think About Insurance Coverage Is Now