Library of Articles
“This number (224) likely represents just a small fraction of the notice-based denials that never make their way to a courtroom. More must bedone to educate policyholders on how to comply with their policies’ claims-made reporting requirements. How did notice-based denials under claimsmade forms become so common? To understand how the industry has arrived at this point, it is important to explore the history and evolution of the claims-made form. There are six main reasons for these denials. 1.Late reporting of a claim after policy expiration 2.Failure to disclose known claims or potential facts and circumstances that could give rise to claims later on an application (and not reporting same under the notice of potential claim provisions) 3.Failure to identify that the current claim being reported is related to a prior claim reported to a previous insurer or previous policy with the same insurer 4.Failure to disclose prior-pending claims made on an insurance application 5.Reporting the claim in a manner that is not as directed by the policy language itself 6.Claims denied for not reporting “as soon as practicable” The main driver of denials is that the policyholder reported the claim after the policy expired, as represented by 101 denials upheld by the courts. Not too far behind that category is the situation where the insured knew of a claim or wrongful act before the inception of a policy. Here is a breakdown of the six categories. … “
“Overall, many of the more common issues were explored in previous articles. That is not to say, however, that these are complete solutions. I have long been of the belief that extended reporting provisions, when invoked, are an incomplete solution for long-term protection. That is because one is taking a limit of liability and stretching it across at least one year and sometimes six years or more. The limits, thus, are never refreshed. So, if there are any claims during the extended reporting term, policy limits are being eroded. This could mean that policy limits could be extinguished by claim frequency, and the benefit of runoff would be lost when that happens before the term had even run out.”
“IN 2010, I authored an article on the dangers of absolute exclusions.1 That article was prompted by an appellate decision in Florida, James River Ins. Co. v. Ground Down Eng’g, 540 F.3d 1270 (11th Cir. 2008). In that case, an engineering firm that was providing consulting services on whether land had become polluted found that its errors and omissions (E&O) policy, which covered it as an environmental consultant, didn’t cover pollution!”
In today’s business climate more focus is placed on lean operations. This trend is becoming increasingly more commonplace as corporations are divesting of business lines and returning to core competencies. As decentralization continues to grow and corporations are relying on supply and sales agreements with non-related parties, the impact of a supplier or customer’s loss on a business’ operations increases substantially.
Maintaining client relationships is critical for insurance brokers and agencies, especially given the fact that developing new commercial clients involves a significant time investment to understand the client’s business and risks and to implement solutions for risk transfer. Once insurance coverage is in place and policies are issued, the focus of the agency switches to servicing the account. The agency is happy. The client is happy. But what happens when your client experiences a significant property loss?
“Diminishing limits policies create a host of potential problems for insurance company claim departments. As is well known the insurance industry has long been plagued with “nuisance” claims. While in some instances insurance companies make quick settlements of nuisance claims to avoid defense cost expenditures, in others, insurers will attempt to resist such claims to avoid setting a precedent, thereby sending a message to the plaintiff’s bar that nuisance claims will not be honored. Considering that defense costs are deducted from the policy’s aggregate limits, either course of action places an insurance company in a difficult position. … “
As insurance professionals, we are often so busy serving our clients that our writing and publishing take a back seat to our practice. Consistent publication keeps us in the public eye and allows us to rank higher on Google.
For plaintiff lawyers, discovering what reinsurance has been purchased will not get you directly into the pocket of the reinsurer, but it will give you insights into what the insurance company was thinking as it handled your client’s claim.
The Affinity business is a $100B+ market in the United States with a long history in the life and health arena. Despite that track record it is often misunderstood in the broader market. This paper provides background for any entity interested in getting into that space or already active in it.
For many small to mid-sized companies there is the overriding element of misplaced trust in the broker and a gross misunderstanding of their own duties.
I have not figured out why reinsurance is not fully regulated, as is insurance. I have heard the logic that the parties to the contract are equally sophisticated, and therefor no regulation is necessary. The problem with that logic is that it assumes a premise that is false. Many of the parties do not have equal bargaining power; they are not equally qualified to enter into the transaction and there are no real arms length negotiations. Many small companies spend more on reinsurance each year then they could possibly receive from the sale of the building they occupy.