The Policyholder Law Blog
  • Blog
  • John L. Watkins
  • Contact John

Buried Treasure: Finding Resources in Your Insurance Policies

10/29/2012

 
Last week, two of my partners and I gave a presentation to the Japan-American Society of Georgia on Finding Buried Treasure in your Insurance Resources, a subject covered previously on this blog. The presentation included discussions of the difference between "occurrence" and "claims made" policies, and why decades old occurrence policies may still potentially provide coverage for "long tail" environmental and asbestos claims. We also discussed the potential value of the defense obligation under many liability policies, an obligation that may save insureds hundreds of thousands of dollars or more. The presentation also covered how modern commercial general liability (CGL) policies are not so general any more, due to the ever increasing number of exclusions added by carriers. Therefore, particularly in this age of "a la carte" coverage, it is more important than ever to have an experienced insurance agent who takes the time to understand your business and its risks and to procure the necessary coverage. We also discussed common sense steps policyholders can take to maximize their insurance resources.

The presentation included a very lively discussion, which, unfortunately, cannot be reproduced here. However, you can access the slides here.

Insurance Companies: Why I Love Them and Hate Them

7/16/2011

 
Over the years, many of my clients have been manufacturers and distributors, many of them international companies. One of the most fundamental principles of risk management for these companies is to make sure they have a well structured insurance program. Having adequate insurance literally makes doing business in the U.S. -- notorious for its litigious nature -- possible.

International companies considering doing business in the U.S. are often told they need an accountant, and turn to an accountant to set up their business. In my view, using only an accountant is a fundamental mistake. In reality, a company doing business in the U.S. needs to engage three professionals: a business attorney, an insurance broker or agent, and an accountant. Ideally, these professionals should work together to limit the company's business risk. The same is true for new domestic companies.

This blog, however, is about insurance, so let's focus on that topic. Insurance companies make the promise of protection. Insurance companies often design and promote new products to deal with unique risks. Just this morning, I found announcements from insurers or brokers offering comprehensive pollution coverage and coverage for Foreign Corrupt Practices Act Liability. I also found an interesting piece about why privately held companies are considering (and need to consider) directors and officers liability coverage. Note: I provide links to these announcements only for informational purposes. I have not analyzed any of the products mentioned and do not endorse them. The reader must investigate any insurance product or service at its own risk.

Although it is a good thing that insurers and brokers are developing new products that can assist businesses in controlling risks, I must sound two words of caution. First, the reason that companies are coming out with these focused products is because they have tried to limit the coverage available under more traditional coverage, such as commercial general liability ("CGL") policies. I often see CGL policies that are so limited by exclusions and endorsements that calling them "general" liability policies borders on absurdity.

Second, even when these newly designed policies clearly provide coverage, that does not mean the claims department will acknowledge coverage. Here's a little secret about insurance companies: There is often little coordination between the underwriting department and the claims department. When underwriters design coverages for non-traditional risks and to bring in new premium dollars, it seems they do not tell the claims department. When the claims come in, as they inevitably will, the claims department may ignore the broader grant of coverage and deny the claim. I have seen this happen. If this happens, call an insurance coverage lawyer.

So there it is: Love and hate. I love insurance companies because they allow businesses to limit and control their risks in a litigious environment. I hate them for trying to endorse away their general coverage and when the claims department does not live up to the promises of the underwriters.
    Picture

    John L. Watkins

    John Watkins is a lawyer with Thompson Hine LLP in Atlanta, Georgia, who represents business policyholders in claims and disputes with their insurance companies.

    These posts are for informational purposes only and do not constitute legal advice. Insurance coverage issues vary substantially from jurisdiction to jurisdiction, and are often fact-specific. Be sure to consult qualified coverage counsel in your jurisdiction for legal advice.

    The views expressed herein do not necessarily reflect the views of Thompson Hine LLP or its other attorneys.


    Archives

    September 2017
    January 2016
    July 2015
    May 2013
    March 2013
    October 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    July 2011

    Categories

    All
    Agent
    Attorney
    Broker
    Buried Treasure
    Business
    Buyer Beware
    Buying Insurance
    Cgl
    Computers
    Construction
    Construction Defects
    Coverage
    Cyber
    Cyber Risks
    Exclusions
    Georgia Supreme Court
    Hathaway Case
    Insurance
    Insurance Agents
    Insurance Coverage
    Insurance Policies
    John L. Watkins
    Liability
    Long Tail Exposure
    Policy
    Policyholder
    Reservation Of Rights
    Risks

    RSS Feed

Proudly powered by Weebly