Communities and businesses throughout California are dealing with the serious, and for some, catastrophic effects of historic wildfires. The fires have devastated homes and businesses across a large swath of the state, and while their full impact is not yet known, they are sure to cause long-term disruption to individuals and families, residential areas, businesses and the economic health of the entire region. Our thoughts are with those affected by these events, and our interdisciplinary Severe Weather Emergency Recovery Team (“SWERT”) has prepared two resources that are immediately helpful to those in the affected areas: Continue reading “California Corner: Resources for Those Impacted by California Wildfires”
The insurance market has proven to be a difficult environment for buyers in 2019. The long tenure of the soft insurance market cycle is changing, and is presenting challenges with pricing, capacity, and sustainability of favorable coverage terms. Coming out of difficult natural catastrophe years in 2017 and 2018, the property insurance market took a sharp turn to protect insurers’ bottom lines. While hardening of the property insurance market was expected, the broader casualty market has taken this opportunity to drive corrective action on their portfolios as well, leaving insurance buyers with little leverage.
How Insurers Are Reacting to the Market Shift
Insurers are approaching the market shift with different strategies, some focused on rate increases, while others are focused on restricting terms, or both. While individual loss experience still plays a role in renewal outcomes, there appears to be more of a portfolio-level push on rate and terms regardless of individual quality of risk factors for any given policyholder. In this environment, stricter control over capacity deployment leads to less competition, which may force the buyer into tough decisions regarding what utility insurance provides for its organization. The guarantee of comprehensive coverage at a fair price becomes harder to balance in a setting where definitively having both is less than certain. Continue reading “Pay Attention to Policy Language in a Hardening Insurance Market”
The strategic importance and economic value of intellectual property (“IP”) can hardly be overstated in today’s global marketplace. Recognizing this, companies devote considerable time and resources to protect their vital IP assets and minimize the financial harm if/when problems arise. Evaluating the risks, understanding the insurance options available, and purchasing meaningful coverage that aligns with the needs of the business are critical pieces of the risk-management puzzle. Navigating the various options can be difficult. This article outlines some of the major issues.
Initially, policyholders have traditionally looked to their Commercial General Liability (“CGL”) policies to respond to IP disputes. Standard-form CGL policies typically cover “advertising injury” (sometimes called “personal and advertising injury”) which, depending on how these terms are defined in the policy, can cover some types of IP claims.
However, not all IP-related claims will fall within the “advertising injury” coverage in a CGL policy. Continue reading “An Overview of Intellectual Property Insurance Issues”
Like a number of states, California prohibits insurers from indemnifying policyholders for liability based on intentional conduct that was committed with the intent to cause harm, although it does not bar a defense against such claims. California’s public policy is codified in Insurance Code Section 533, which provides: “An insurer is not liable for a loss caused by the wilful act of the insured; but he is not exonerated by the negligence of the insured, or of the insured’s agents or others.”
A significant body of law has elucidated the rules for application of Section 533. Reckless or grossly negligent conduct generally does not trigger application of the statute. Nor, with very limited exceptions, does the mere fact that a policyholder intended the act that caused the harm bring the conduct within Section 533. Instead, the policyholder must have intentionally performed a liability-producing act for the express purpose of causing harm or with knowledge that harm was highly probable or substantially certain to result. Fraud and malicious prosecution are common examples. Section 533, however, does not bar coverage for intentionally harmful acts based solely on vicarious liability. Continue reading “California Corner: California’s Bar on Coverage for Willful Acts under Insurance Code Section 533—Don’t Assume It Applies”
Frank M. Kaplan
There are certain immutable truths. For example, we know that the sun will rise in the east tomorrow, that the earth is not flat, that coverage grants in an insurance policy are to be interpreted broadly consistent with the insured’s reasonable expectations, and that policy exclusions are to be interpreted narrowly. The latter two, which together with others, are long-held canons of insurance policy interpretation protecting insureds that appear in thousands of court decisions and are not subject to reasonable dispute by lawyers on either side of the insurance coverage bar.
So what happens when an insurer attempts to alter these and other fundamental, bedrock principles of policy interpretation by unilaterally altering them in a form, non-manuscript insurance policy? Must a court abandon decades of settled jurisprudence in favor of policy language that seeks just that result? The answer should be “no.” Continue reading “Unenforceable “Policy Interpretation” Provision”
With the “opioid epidemic” at an all-time high—and the resulting news coverage and public awareness also at an all-time high—now is the time for pharmaceutical companies, pharmacists, hospitals, doctors, first responders, and employers to review their professional liability and general liability insurance policies and any other potentially applicable policies such as products liability and directors and officers (“D&O”) insurance. Continue reading “Insurance Coverage for the Opioid Crisis”
The rising Pokémon Go sensation has dramatically increased the popularity of augmented reality games, but it has also brought with it increased risks and liabilities for both game users and developers alike. For those who don’t know, Pokémon Go is a mobile app that, although released just last month, has already been downloaded over 75 million times, generated more than $75 million in revenue, and boasts daily usage statistics that have exceeded Snapchat, Twitter, Instagram, and Facebook. It’s a location-based augmented reality game that allows users to partake in virtual scavenger hunts. Using the user’s GPS and mobile camera, players are encouraged to explore their surroundings, seek out animated characters in real world places, and “catch ‘em all.” The characters are overlaid on the player’s screen and displayed as if they exist in reality. Unfortunately, distracted players on the hunt can end up wandering (or driving) into places they shouldn’t be, and becoming injured or injuring others as a result.
The number of Pokémon Go calamities increases daily, with incidents ranging from the mundane to the absurd and dangerous. In the few short weeks since its debut, users have experienced or caused numerous personal injuries, property damage, and car accidents. Some users have become stuck in trees and locked in cemeteries, while more serious incidents involve users straying onto train tracks, falling off cliffs, or entering restricted nuclear power facilities—all while on the hunt for Pokémon characters. Still others in pursuit of Pokémon have trespassed on private property, and some users have even been robbed after being targeted and led to specific locations using the app. Continue reading “Insurance Liability, Risks, and Options in Augmented Reality: Catch ‘Em All”
Charrise L. Alexander
Companies like Airbnb and Uber are considered pioneers in this new era of the “sharing economy.” This innovative way of doing business, allowing individuals to commercialize what ordinarily is for personal use, has created an entirely new marketplace in many cities around the world. However, as with most emerging markets there are new and unexpected risks. Airbnb, Uber, and other new companies who operate in these emerging markets are challenged to respond to change and manage these unforeseen risks quickly. Airbnb is currently receiving pressure from numerous states to be more proactive in managing and curing potential risks.
Of late, Airbnb has been in the headlines due to a devastating death at a rental in Texas. Many questions are being asked. One of the biggest is, “Who is responsible for keeping renters safe?” And whoever that is, do they have adequate insurance coverage? Continue reading “The Sharing Economy: Are You Covered If Something Goes Wrong?”
Erin L. Webb
On December 9, 2014, I participated as one of the speakers on a panel at the Nuclear Power International conference in Orlando, Florida. The session focused on the unique regulations and procedures that workers and plant operators must follow in order to keep the public and the staff safe. We also discussed the market conditions affecting nuclear power, including the challenges the industry faces from competing power generating sources such as natural gas. Rick Higginbotham of GE Power & Water and Clayton T. Smith of Fluor served as co-chairs and led the discussion.
In my presentation I talked about industry-specific insurance issues concerning nuclear power plants, and explained the available options for liability and property damage insurance. I also provided important tips to keep in mind in the event of a property damage claim. Understanding how these policies work, and the importance of prompt notice as well as the often complicated and technical process of filing a detailed proof of loss with the insurer, can be key to maximizing a policy’s value. Finally, I discussed some emerging issues that may have significant impacts on future insurance products, such as the development of small modular reactors and the Nuclear Regulatory Commission’s recent action concerning continued storage of spent nuclear fuel. Changes in technology, as well as changes to the applicable regulatory scheme, can spur changes to the exposure and risk a plant faces, and should be addressed in the insurance policies purchased to mitigate those risks. Continue reading “Nuclear Power International Panel: Economics, Policy, and Regulation”
Erin L. Webb
On August 28, 2014, I presented with insurance broker Sara Owens of GNW Evergreen, a division of HUB International, at PAX Dev in Seattle, Washington. PAX Dev is a conference devoted to the video game developer community and the topic of game making. Conference tracks focused on programming, design, business, art, music and more.
During our session, which was part of the business track, we talked about basic insurance concepts relevant to developers and publishers in the video game industry, including how to buy insurance and what to do in the event of a loss. Continue reading “PAX Dev: Insurance 101 for Video Game Developers and Publishers”