An issue frequently raised in coverage disputes involving claims-made liability insurance policies is determining whether certain pre-lawsuit events or disputes constitute a “claim” sufficient to trigger coverage.
Unlike occurrence-based liability policies that respond in the policy year or years during which the coverage-triggering event occurred (e.g., the years in which a person sustained injury in an asbestos bodily injury claim), a claims-made liability insurance policy is triggered upon the insured’s receipt of a claim. Upon an insured providing notice of a claim, its insurers may dispute whether the notice-triggering event constitutes a “claim” at all. Continue reading “Federal Court Says Subpoena Is a “Claim” Triggering Insurance Coverage”
A governmental entity may initiate an investigation with something as seemingly innocuous as an “informal” request for information, or as ground shaking as armed government officials executing a full-blown search and seize warrant at your company’s headquarters. In either scenario, the ensuing investigation is likely to be expensive, time consuming, and a distraction from your business operations. Any governmental investigation can quickly escalate into an extensive and protracted inquiry that forces your company to spend significant time, resources, and legal fees responding to (and defending against) the government’s investigatory demands. These investigations may also result in subsequent legal or administrative enforcement actions, which expose the company and its directors and officers to potential liability for damages, fines, penalties, and other financial obligations. These actions pose a serious threat to the organization and its top brass, and must be met with a vigorous defense. The crucial question is: How will you pay for your response and defense? The answer may lie with your insurance portfolio. Continue reading “Government Investigators at Your Door? Check Your Insurance Policies.”
This week, winter snowstorms swept through the East Coast of the United States and several surrounding areas, leaving snowfall of up to two to three feet in a 36-hour period. In the bustle to get the snow cleared and get back to work, companies and individuals should be sure to maximize all available insurance coverage.
Winter storm losses can be serious and expensive. At least one source estimates that the cost of the recent East Coast storm could range from $585 to $850 million. While not all costs will be covered by insurance, insurance policies can protect against a variety of losses relating to winter storms. For example, damaged buildings and property may be covered under a first-party property policy, as can business interruption losses that are caused by property damage. Snow and ice can also potentially expose a company to third party claims for bodily injury or property damage relating to conditions on their property, which may be covered by liability insurance.
The following five tips will help insureds maximize their coverage for winter storm losses and get back on their feet quickly. Continue reading “Top 5 Tips for Insureds Following Winter Storm Losses”
One of the most common questions that in-house counsel may have for coverage counsel is, “What is the effect of providing late notice of an insurance claim?” The answer is that it depends on which state’s law applies to the insurance policy. A minority of states view notice as a condition precedent to coverage, and unexcused or unreasonably late notice voids coverage. The majority of states, however, have adopted the notice-prejudice rule, which is one of the most beneficial rules to policyholders. Rooted in equity and contract principles, it holds that untimely notice does not waive coverage unless the insurance carrier has been materially prejudiced by the delay. But a state’s adoption of the notice-prejudice rule is usually not the end of the story. As the notice-prejudice rule has gained prominence, insurers have shifted strategy from arguing against the adoption of the notice-prejudice rule to urging courts to carve out exceptions to the rule in which the insurer is deemed to suffer prejudice as a matter of law. This strategy, if successful, could have the effect of eroding the protection that the notice-prejudice rule affords policyholders. At a minimum, it will foster uncertainty among policyholders as to whether the notice-prejudice rule will apply. Continue reading “What Happens If Your Company Gives Late Notice of a Claim to Its Insurer? Hint: Insurers Should Not Make Policyholders Guess”