Don’t Let Your D&O Insurer “Bump” a Covered Claim

James R. Murray, Jared Zola, and Kyle P. Brinkman

Murray, James R.Zola, JaredBrinkman, Kyle P.Companies facing shareholder derivative suits should be wary of their directors’ and officers’ liability (“D&O”) insurers attempting to avoid providing coverage for settlements or judgments based on “bump-up” or “inadequate consideration” exclusions. The historic purpose of the exclusion is to prevent insureds from negotiating an unfairly-low price when purchasing another entity or completing intracompany transactions and then using insurance proceeds to supplement that price to come up with the fair market value. Continue reading “Don’t Let Your D&O Insurer “Bump” a Covered Claim”

Trying the Environmental Coverage Case in 2017

James R. Murray and Omid Safa

murraysafaIt can be easy for insurance trial lawyers to become complacent when fighting the ancient coverage wars over asbestos and pollution related-liabilities. But good trial lawyers know how to revisit their time-tested themes with renewed energy and vigor each time. They face each trial fresh, as if it is the first time the words have been spoken, because the trial lawyer knows that for the jury, that might as well be true. The evidence and the themes will be all new. Continue reading “Trying the Environmental Coverage Case in 2017”

Don’t Let Insurers Use Attorney-Client Privilege to Shield Claims Handling Documents

James R. Murray, Jared Zola and Omid Safa

Murray, James R. Zola, Jared Safa, OmidUpon receiving an insurance claim from its policyholder, an insurer is obligated to promptly and reasonably investigate, adjust, and determine whether to pay a claim. Those are fundamental aspects of an insurer’s business that arise with respect to every claim. Reports by insurance investigators or adjusters, prepared during the processing of a claim, are discoverable as made in the regular course of the insurer’s business.

Insurers frequently allege that attorneys working for the insurers perform or assist with the claim investigation or adjustment and then assert privilege in an effort to avoid producing such reports during litigation. Policyholders should be wary of any such assertion and consider case law from across the country compelling insurers to produce claims handling documents (and related testimony) generated by or in connection with insurer coverage counsel. Many courts hold that the decision to have lawyers undertake or be involved in basic claims handling functions does not imbue this business task with privilege, and protection from discovery. Thus, communications among these attorney claims handlers, independent claims personnel, and insurers about the results of their claim handling activities should not be cloaked in privilege. Continue reading “Don’t Let Insurers Use Attorney-Client Privilege to Shield Claims Handling Documents”