Articles Posted in Claims

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An unexpected or catastrophic loss can force any company out of business, even if it is insured.  You must understand your company’s risks and how your insurance policies cover those risks in order to manage them and maintain stability.

Having the correct insurance in place is only the first step. Property and business interruption insurance policies are often complex, and your suppliers, customers and other business partners’ insurance situation may have a direct impact on you as well.  Even if your business doesn’t suffer any direct physical damage to its facilities following a natural disaster or other loss, your customers or suppliers may have, and that could result in what is known as a “supply chain” or “contingent business interruption” loss of revenue and sales.  If you are unprepared when a disaster strikes, you may miss out on substantial amounts of insurance coverage to which you may be entitled.  The time to prepare is before a disaster occurs.  Take the time now to understand your insurance coverage and other risk transfer methods and opportunities.  Know your rights.  And put a plan in place to protect yourself, your employees, and your property before the loss occurs.  Then, if disaster strikes, you’ll be in a better position to make it through and to access your insurance coverage to help restore operations.

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As the powerful storm that is Hurricane Harvey looms in the Gulf of Mexico, Houston attorneys Vince Morgan and Tamara Bruno discuss what businesses and other organizations in the affected area should do immediately in order to maximize insurance recovery.

Key Takeaways:

  • Category 3 Hurricane Harvey is projected to have sustained winds of 120 m.p.h. and disastrous amounts of rain, with a possible storm surge.
  • Business interruptions are already happening in advance of Harvey’s landfall.
  • Policyholders should take key steps to maintain and maximize insurance coverage for Harvey-related losses.
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Fashion is sexy; insurance is not. So it’s easy to think of the two separately. But there are many points of intersection. Some of those intersections are not industry-specific: iStock-511438211-fashion-insurance-300x200like other industries, fashion—design houses, retailers, textile manufacturers, modeling agencies—carries property, D&O, cyber, and many other lines of insurance. But unique aspects of the fashion world, and recent litigation trends affecting it, underscore the importance for the fashion industry to understand insurance in order to maximize successful recovery of insurance assets. Here, we comment briefly on three areas: IP, employment, and antitrust.

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Imagine you are a prime contractor to a Department of the United States of America supplying logistical support for the war on terrorism in Afghanistan. As the prime, you are kicking on all cylinders, including purchasing comprehensive Employer’s Liability, Workers’ Compensation and Defense Base Act (DBA) insurance to cover your own employees against a worker injury claim abroad.

Then the phone rings.

iStock-187940286-falling-ladder-300x224A 30-year-old American worker hired by your subcontractor working on base encountered a swarm of bees while painting; he fell and was crippled. The sub isn’t paying his medical expenses and is apparently nowhere to be found. The injured employee’s bulldog lawyer is on the line threatening to sue your company directly for his client’s devastating injuries.

How can this be?

DBA coverage is workers’ compensation insurance that employers may turn to in the event that an employee is injured while working on a contract financed by the U.S. Government and performed outside the United States. Section 5(a) of the Act provides that “a contractor shall be deemed the employer of a subcontractor’s employees if the subcontractor fails to secure the payment of compensation.”

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A few weeks back, we told you how South Carolina May No Longer Hold Insurers’ Reservations. In that post we left you with a teaser: “There’s more to this case.”iStock-537435705-burden-200x300

In fact, Harleysville Group Insurance v. Heritage Communities, Inc. does more than just take insurers to task with regard to their vague reservations of rights. Reaffirming that, in a case involving both covered and excluded losses, the insurer bears the burden of proving which damages are excluded from coverage, Harleysville shows how easily an insurer can find itself in a bind when trying to prove “no coverage” at the same time and in the same proceedings that it is providing a defense for its insured.

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When an insurance company pays a claim by its insured, the insurance company acquires a legal right to pursue a so-called “subrogation” claim against another party who may be responsible for the damage. The insurance company “stands in the shoes” of its insured to seek damages from whoever caused the loss. Typically, construction contracts include a “waiver of subrogation” clause that limits the right of the insurer to file a subrogation action against another participant in the construction project.

businesman facing a challenge

These waiver of subrogation clauses are good public policy and generally benefit all project participants insofar as they (1) avoid excessive finger pointing among parties who are involved in an ongoing commercial relationship (and thereby encourage immediate repairs in lieu of a lawsuit) and (2) are economically efficient because only one party needs to value and insure the risk.

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Spring is upon us, which means the return of baseball. It seems only fitting that with a new season of America’s pastime just underway, we discuss another area where the performance in the lead-off position can be vital: leading off the claims process by providing notice to your insurer.

FEBRUARY 26, 2010: Cal State Fullerton gymnastics at in Fullerton, CA. Photo by Matt BrownSay your company’s just been sued, received a demand letter, suffered massive property damage, or incurred some other type of substantial loss. If your routine practice in these high-stress situations is to consider potentially applicable insurance, you’re ahead of the curve and should pat yourself on the back. Because too often, even if understandably, insurance is an afterthought to companies in the midst of a crisis. Unfortunately, in such situations, when a company does get around to making an insurance claim, the insurer commonly denies coverage on the basis of late notice.

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