Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

What Every Business Tort Lawyer Needs To Know


Published on

Insurance coverage issues for business litigators.

  • Be the first to comment

  • Be the first to like this

What Every Business Tort Lawyer Needs To Know

  1. 1. V E R O N I C A B A T E S M I C H A E L H U D D L E S T O N H E A T H E R K U B I A K E R N E S T M A R T I N A M Y E L I Z A B E T H S T E W A R T , M O D E R A T O R T E X A S B A R C L E 3 R D A N N U A L B U S I N E S S T O R T S I N S T I T U T E O C T O B E R 1 4 , 2 0 1 1 What Every Business Tort Lawyer Needs to Know about Insurance Coverage
  2. 2. • Commercial General Liability • Directors and Officers Liability • Fiduciary Liability • Errors & Omissions Liability • Employment Practices Liability • Intellectual Property Liability • Cyber Liability Types of Policies
  3. 3. Commercial General Liability Examples  Bodily Injury  Property Damage  Advertising Injury  Personal Injury  Business disparagement  Defamation  Malicious prosecution  Copyright infringement  Misappropriation of style of doing business  Invasion of privacy  Misappropriation of advertising ideas  Wrongful eviction  False arrest/imprisonment What’s Covered?
  4. 4. Errors & Omissions Examples  Wrongful Acts (in connection the insured’s profession)  Any professional negligence claim  Bankers  Accountants  Real estate agents  Lawyers  Architects  Engineers  Definition of “professional services” What’s Covered?
  5. 5. Directors & Officers Liability Examples  Wrongful Acts—acts, errors or omissions  Breach of duty  Misleading statements  Errors & omissions  Mismanagement What’s Covered?
  6. 6. Fiduciary Liability Examples  Wrongful Acts  Breach of fiduciary duty under ERISA  Other breaches of fiduciary duty  [Sometimes] negligence in administration of benefit plan What’s Covered?
  7. 7. Which Policy Applies • Policy Period • Claims-made v. Occurrence • Primary v. Excess • Named Insured v. Additional Insured
  8. 8. Claims-Made Policies • Prior acts and retro dates o Policy may require wrongful act within specific time • Definition of claim o Claim requires demand for money o Must be in policy period
  9. 9. Claims-Made Policies • Incident notice o Can invoke coverage before claim is made o Can freeze coverage in a policy period different from actual claim • No coverage for previously reported incidents o Form of known or loss in progress provision • Was tail coverage purchased? • Claims made and reported?
  10. 10. Notice to the Insurer • Notify all potential insurers • Check policy for when and where • “As soon as practicable” or promptly • During policy period or within X days • Prejudice • Cooperation
  11. 11. Practical Considerations • As plaintiff, seek a copy of any reservation of rights letters • Take inventory • Get parent, subsidiary and associated primary and excess polices • Make sure you have complete policies • Use certificates to run down the actual policies • Read the policies carefully • Involve the broker
  12. 12. Practical Considerations • Pay attention: different forms and endorsements can change the coverage o Get coverage from the inception with current carrier o Renewal additions can be eliminated o Check form approval with the TDI • Err on the side of giving notice • Never assume someone is or will provide notice and do it correctly for you
  13. 13. Insurer’s Response • Unqualified defense • Reservation of rights • Denial • Untimely or lack of response
  14. 14. Duty to Defend • Triggered by allegations • Allegations taken as true • Extrinsic evidence not considered? • Doubts resolved in favor of insured • Broader than duty to indemnify
  15. 15. Under certain circumstances, an insurer may not insist on its right to control the defense—what are those circumstances? What is a reasonable rate and who decides? Independent Counsel
  16. 16. Declaratory Judgment Actions • Jurisdiction/Venue • Parties • Prohibitions
  17. 17. • Stowers o Duty not to settle. Pride Transp. v. Continental Cas. Co., 2011 WL 1197306 (N.D.Tex., Mar 31, 2011) • Settlement o Gandy/Atofina • Entity Changes—Conversions and Mergers and Acquisitions o VRV o Ford Bacon o Keller Foundations o Nautilus Trends in Texas
  18. 18. • Gilbert and blended tort/contract claims versus Lamar Homes • Nokia o Using the “legal obligation to pay as damages” to expand coverage o Potentially covered—partial or incomplete pleadings • D & O o Stanford fallout o Disgorgement/ill-gotten gains Trends in Texas
  19. 19. • How to deal with a difficult insurer • Resolution strategies • Ideas for maximizing coverage Practical Advice
  20. 20. Questions?
  21. 21. THANKS!