My latest insurance information video... How coinsurance works on your business property insurance policy.
The Water of the Flood
Courtesy of the institute of creation research, this article succinctly makes it point so well I wanted to share it:
From Where Did the Water Come?
December 30, 2009
"And the waters prevailed exceedingly upon the earth; and all the high hills, that were under the whole heaven, were covered." (Genesis 7:19)
Lack of an answer to this question led many theologians in the early 1800s to abandon the biblical doctrine of the global Flood in favor of uniformitarianism. At the time, scientists were saying that the concept of a young earth had been disproved and that since the mountains had been around since before the time of Noah, obviously they couldn't have been covered by the Flood waters. There is simply not enough water to cover the present mountain ranges, they said. Theologians responded by proposing a local flood incapable of laying down the fossilbearing rock of the world. Even today, most evangelical theologians, denominations, and seminaries teach this compromise.
The world before the Flood was quite different from the world today. A global water vapor canopy encircled the earth and contained vast amounts of water vapor (Genesis 1:6-8). Furthermore, the topography was much less pronounced, since all present mountain ranges are made up of sedimentary rocks or volcanoes attributable to the Flood. Since it didn't rain before the Flood (Genesis 2:5), yet rivers flowed (v. 10), there must have been great subterranean reservoirs of water.
At the proper time, these "fountains of the great deep" (Genesis 7:11) spewed out their contents and the "windows of heaven were opened" as the canopy was precipitated. The breaking up of those "fountains" which were on the sea bottom implies great tsunamis elevating water to an abnormal level on land. Coupling these mechanisms with the fact that most of the earth (70 percent) is still covered with water in sufficient quantity to cover the entire earth (if it were smoothed out) to a depth of about 7,500 feet, we can conclude that the biblical story is, indeed, quite reasonable. JDM
Institute for Creation Research | 1806 Royal Lane | Dallas | TX | 75229
Is the information in a statement by an Insured to an Insurer privileged?
Sangaralingam v. Sinnathurai, [2009] O.J. No. 5211 (Master).
During examinations for discovery, information gathered by insurance companies during its process of investigation into a claim, are sometimes the subject of dispute.
For example, counsel for an insurer will usually assert privilege over the document containing a statement made by an insured to the insurer during the course of investigation.
The document itself is privileged. But the question arises whether the "material information" in the statement is also privileged.
Master Short recently dealt with a motion in which the plaintiff sought an Order directing a defendant to disclose information contained in a statement delivered to his insurer following a motor vehicle accident.
Counsel for the plaintiff asserted that even if the statement is privileged, the contents of the statement must be disclosed on discovery.
Master Short quoted Justice Lane in Greco v. Thornhill, [1993] O.J. No. 1347, who wrote that information which is relevant may not be withheld from disclosure merely because it has also been incorporated into a privileged document. For example, with respect to surveillance the questioner is entitled to know what the investigator saw, his knowledge, information and belief, but not to have the document itself. However, the situation is different in the case where the witness has already testified to the facts and what is being requested is not the facts but what the witness said about the facts to her insurer. Justice Lane held that such questioning is clearly devoted solely to the credibility of the witness and the witness is not obliged to respond.
Master Short held that a witness who has been examined for discovery and makes him or herself available to the party opposite to answer any relevant questions is not obliged to then also provide the material information contained in a statement made to its insurer.
During examinations for discovery, information gathered by insurance companies during its process of investigation into a claim, are sometimes the subject of dispute.
For example, counsel for an insurer will usually assert privilege over the document containing a statement made by an insured to the insurer during the course of investigation.
The document itself is privileged. But the question arises whether the "material information" in the statement is also privileged.
Master Short recently dealt with a motion in which the plaintiff sought an Order directing a defendant to disclose information contained in a statement delivered to his insurer following a motor vehicle accident.
Counsel for the plaintiff asserted that even if the statement is privileged, the contents of the statement must be disclosed on discovery.
Master Short quoted Justice Lane in Greco v. Thornhill, [1993] O.J. No. 1347, who wrote that information which is relevant may not be withheld from disclosure merely because it has also been incorporated into a privileged document. For example, with respect to surveillance the questioner is entitled to know what the investigator saw, his knowledge, information and belief, but not to have the document itself. However, the situation is different in the case where the witness has already testified to the facts and what is being requested is not the facts but what the witness said about the facts to her insurer. Justice Lane held that such questioning is clearly devoted solely to the credibility of the witness and the witness is not obliged to respond.
Master Short held that a witness who has been examined for discovery and makes him or herself available to the party opposite to answer any relevant questions is not obliged to then also provide the material information contained in a statement made to its insurer.
What Is The Difference Between Accidental Death Vs Whole Life Insurance?
By Lisa Olsen Posted in Life Insurance News
Accidental death, sometimes referred to accidental death and dismemberment insurance is a policy that pays out additional benefits if the policy holder’s cause of death is not a work-related accident.Death in a car accident or a climbing accident would qualify under this policy. Also, a portion of the funds would be paid out to the policy holder if they lost an appendage or one of their senses (sight, hearing) in an accident. This type of insurance is for accidental death only and would not pay a death benefit if the policy holder died from an illness, suicide or natural causes.
There are four types of accidental death insurance; Voluntary, Group Life Supplement, Travel Accident or Business Trip, and Defendants. Voluntary accidental death insurance would be purchased as a single policy. Group Life Supplement would be an additional purchase to supplement an existing policy. Travel Accident or Business Trip insurance is for accidents on trips, whether for business or pleasure. This type of policy would be ideal for someone who travels a lot. A Dependent’s policy could be purchased for any dependent including children and disabled adults.
Whole Life Insurance
Simply a whole life policy covers the whole life of the policy holder. Premiums are typically paid for a certain number of years (ten to twenty) but the insurance remains active for the entire life of the person or until they reach endowment age. The age of endowment is usually 95+ at which point the policy holder can request the cash value of the policy or is can be paid out like an annuity.
Which Is Better
These plans are very different and serve a very different purpose. Businesses will sometimes take out Business Trip Accidental Death on their employees that travel a lot, leaving a portion for the dependents of the policy holder and pocketing the rest. Accidental Death can be added as a supplement to whole life insurance but usually whole life insurance covers unexpected or accident death within the policy itself. However, it does not cover dismemberment like the Accidental Death policies.
Affordable Term Life Insurance Explained
Ensuring a families financial future is paramount when considering an affordable term life insurance policy and this requires the services of life insurance agents and brokers with knowledge and experience. The loss of the main income earner can destroy a family’s financial picture.
When making a choice between an independent broker or a company life insurance agent, consumers should consider that a life insurance broker will work with a wide range of companies and can compare policies and quotes for consumers, much faster and more efficiently. If consumers must choose to research companies on their own, they must be sure to obtain several quotes for comparison.
They ought to be sure to consider the long-term financial requirements that would need to be met in the case of death. This would mean the replacement of income until the death of a spouse and, or until children are no longer dependent.
When dealing with independent agents and brokers, remember that all states have licensing requirements for these professionals and consumers should be able to verify the existence of such a license in good standing with the state insurance department. Other considerations are the level of experience that might play an important role in the services that an insurance professional provides. Background and education are two important considerations when selecting an agent or broker.
A good resource for finding qualified insurance professionals is the National Association of Insurance and Financial Advisors (NAIFA), which provides a listing of agents. The NAIFA is made up of over 700 state and local associations, which includes 200,000 members.
With a term life insurance policy, the applicant will select the most appropriate period of coverage as well as the amount of coverage. When establishing the amount of a life insurance policy, the goal is to ensure financial independence for those who depend on them now financially. This could mean that the coverage amount represents an aggregate amount of income that would have to be replaced over a given period, or it may be an amount that, if invested, would return a regular income that could sustain a consumer beneficiary.
It is an option to choose their term of the life insurance policy that means that coverage will end on a specific date. The date that the policy terminates may be a time when children become dependent, or when a major debt such as a mortgage is scheduled to be paid off.
Other considerations like a business continuation plan may be a factor for business owners. This is especially true if the business depends greatly on one single individual, or a few select individuals within the firm. If the loss of one of these individuals would cause a great financial hardship for any reason, then a term life insurance policy could be established to support business operations after the loss. Logic would dictate that the term could be set to expire on that person’s retirement date.
Term life insurance quotes are an important financial endeavor. The best life insurance brokers will be informed, educated and will have the ability to formulate a plan for the consumer or firm that will best suit then needs of their dependents in the event of a loss.
What Do Provisions Mean For A Life Insurance Policy?
By Patrick Cooper Posted in Life Insurance News
Provisions in a life insurance policy are contracted statements that life insurance policies are required to follow. These are legal provisions prepared and stated in your life insurance policy. All life insurance policies have provisions.
Common Provisions
Some of the more common provisions in insurance policies include but are not limited to; a grace period, entire contract clause, incontestable clause, misstatement of age clause, war clause, suicide clause, double indemnity clause, policy change clause, and a payer benefit clause.
The grace period clause is a period of time when changes can be made. This can apply to anything within the insurance policy. The war and suicide clause make special provisions for death by suicide or in wartime. The policy change clause usually states the terms in which a insurance policy can be changed and to what degree.
Importance of Provisions
The provisions aren’t there to make your life harder they in fact make it a little easier. While some of the provisions are in there to protect the interest of the insurance company, many of them are there to protect the policy holder. It is important to know what specific provisions are written into your policy. You can always request that changes be made or extra provisions be placed into the policy before you decide to sign on the dotted line. Insurance companies aren’t always forth coming about certain provisions in their policies but many are open to questions.
Know Your Provisions
It is very easy to incur a penalty to your life insurance policy if you do not know what the specific provisions of your policy are. Read through your policy carefully and ask questions about things that you don’t understand or are unsure about. It is better to ask too many questions than not enough, especially when it comes to your financial future.
How to Buy Nonprofit Directors and Officers Insurance
My guide to nonprofit directors and officers insurance is available at my store.
Go Here
Includes a description of coverages, endorsements, issues to watch out for and a worksheet to help you compare proposals.
Go Here
Includes a description of coverages, endorsements, issues to watch out for and a worksheet to help you compare proposals.
U.S. District Court holds that language of policy endorsement trumps reason endorsement was written
In my last post I started discussing Whittaker Corp. v. Am. Nuclear Insurers, __ F.2d __, 2009 WL 4342512 (D. Mass.).
Whittaker and Textron were former owners and operators of property that was declared a superfund site because of nuclear waste. They sought coverage for associated costs from American Nuclear Insurers, or ANI. At issue was an endorsement called a Facility Form in which ANI promised to pay "all sums which the insured shall become legally obligated to pay as damages because of . . . property damage arsing from the nuclear energy hazard."
ANI argued that there was no coverage for the loss. It argued that the Facility Form must be viewed in the context in which it was drafted. It contended that the Facility Form is a "creature of statute," intended to carry out the legislative goals of the Price Anderson Act, which was conceived in response to "the risk of potentially vast liability in the event of a nuclear accident of sizable magnitude." The Act required nuclear power licensees to purchase primary insurance of $60 million. The government agreed to act as an excess insurer, providing licensees with $500 million of indemnity over the primary policy. Licensees were relieved of any additional liability regardless of fault or causation.
ANI claimed that it developed the Facility Form to meet the primary policy requirement of the Price Anderson Act. It argued that if the Facility Form is interpreted to provide coverage for the "conventional" environmental cleanup, its ability to provide coverage for third-party claims in the event of nuclear catastrophe would be severely and possible fatally jeopardized.
The court rejected that argument. It noted that the Price Anderson Act is not a "nanny" act, in that it does not prohibit insurers from undertaking to provide coverage to nuclear plant operators for "conventional" environmental harm should they choose to do so. It did not dictate the terms of the Facility Form.
The court held that coverage under the Facility Form is determined by its terms, and that pursuant to those terms coverage was initially triggered.
As I will discuss in my next post, however, there was no coverage because the loss came within an exclusion.
Whittaker and Textron were former owners and operators of property that was declared a superfund site because of nuclear waste. They sought coverage for associated costs from American Nuclear Insurers, or ANI. At issue was an endorsement called a Facility Form in which ANI promised to pay "all sums which the insured shall become legally obligated to pay as damages because of . . . property damage arsing from the nuclear energy hazard."
ANI argued that there was no coverage for the loss. It argued that the Facility Form must be viewed in the context in which it was drafted. It contended that the Facility Form is a "creature of statute," intended to carry out the legislative goals of the Price Anderson Act, which was conceived in response to "the risk of potentially vast liability in the event of a nuclear accident of sizable magnitude." The Act required nuclear power licensees to purchase primary insurance of $60 million. The government agreed to act as an excess insurer, providing licensees with $500 million of indemnity over the primary policy. Licensees were relieved of any additional liability regardless of fault or causation.
ANI claimed that it developed the Facility Form to meet the primary policy requirement of the Price Anderson Act. It argued that if the Facility Form is interpreted to provide coverage for the "conventional" environmental cleanup, its ability to provide coverage for third-party claims in the event of nuclear catastrophe would be severely and possible fatally jeopardized.
The court rejected that argument. It noted that the Price Anderson Act is not a "nanny" act, in that it does not prohibit insurers from undertaking to provide coverage to nuclear plant operators for "conventional" environmental harm should they choose to do so. It did not dictate the terms of the Facility Form.
The court held that coverage under the Facility Form is determined by its terms, and that pursuant to those terms coverage was initially triggered.
As I will discuss in my next post, however, there was no coverage because the loss came within an exclusion.
Season's Greetings
Thank you to our readers and to those who have taken time to post comments on the blog this year. We appreciate your input and support. We wish you all the best in 2010. Happy holidays from the Ontario Insurance Law Blog!
John and Tara
John and Tara
GCS that Fluctuates Above 9 May Still be Considered Catastrophic
Liu v. 1226071 Ontario Inc. (Canadian Zhorong Trading Limited)(2009), 97 O.R. (3d) 95 (C.A.).
The Court of Appeal has released a decision that may make it more difficult to resist a declaration that a claimant is catastrophically impaired.
In Liu, the plaintiff was injured in a motor vehicle accident on April 9, 1999. His initial Glasgow Coma Score (“GCS”) was 3/15. His GCS steadily increased and by the time he arrived at hospital 26 minutes later, his GCS was 14. The definition of “catastrophic impairment” is brain impairment that results in a score of 9 or less on the GCS according to a test administered “within a reasonable period of time after the incident by a person trained for that purpose”. The trial judge concluded that the appellant did not suffer a catastrophic impairment, and as a result, he was not entitled to receive a damage award for future medical, rehabilitation or attendant care expenses, which the jury assessed at $858,000.00. The issue of catastrophic impairment was therefore very important to both sides.
The Court of Appeal held that as long as there is one GCS score of 9 or less within a reasonable time following the accident, the plaintiff’s impairment falls within the definition of catastrophic impairment. The fact that there may have been other, higher scores also within a reasonable time after the accident is irrelevant.
This decision has implications in both the accident benefits sphere and on tort damages. Although it simplifies the definition of catastrophic impairment to a certain extent, it permits claimants who have met the definition for a limited period of time to access increased damages. It remains to be seen whether this decision will be appealed to the Supreme Court of Canada.
The Court of Appeal has released a decision that may make it more difficult to resist a declaration that a claimant is catastrophically impaired.
In Liu, the plaintiff was injured in a motor vehicle accident on April 9, 1999. His initial Glasgow Coma Score (“GCS”) was 3/15. His GCS steadily increased and by the time he arrived at hospital 26 minutes later, his GCS was 14. The definition of “catastrophic impairment” is brain impairment that results in a score of 9 or less on the GCS according to a test administered “within a reasonable period of time after the incident by a person trained for that purpose”. The trial judge concluded that the appellant did not suffer a catastrophic impairment, and as a result, he was not entitled to receive a damage award for future medical, rehabilitation or attendant care expenses, which the jury assessed at $858,000.00. The issue of catastrophic impairment was therefore very important to both sides.
The Court of Appeal held that as long as there is one GCS score of 9 or less within a reasonable time following the accident, the plaintiff’s impairment falls within the definition of catastrophic impairment. The fact that there may have been other, higher scores also within a reasonable time after the accident is irrelevant.
This decision has implications in both the accident benefits sphere and on tort damages. Although it simplifies the definition of catastrophic impairment to a certain extent, it permits claimants who have met the definition for a limited period of time to access increased damages. It remains to be seen whether this decision will be appealed to the Supreme Court of Canada.
United States District Court holds that uncertainty over insurance policy terms does not create duty to defend
My next several posts will discuss Whittaker Corp. v. Am. Nuclear Insurers, __ F.2d __ (D. Mass. 2009), 2009 WL 4342512, in which historical owners of property sought insurance coverage for their costs associated with the property being declared a superfund site.
One of the issues was whether Endorsement 112, which would have excluded coverage, was properly added to the insurance policy. In a previous decision the court had held that pending the resolution of that factual question, the insurer, ANI, had a duty to defend. On a motion to reconsider, to his credit Judge Stearns reversed that ruling:
One of the issues was whether Endorsement 112, which would have excluded coverage, was properly added to the insurance policy. In a previous decision the court had held that pending the resolution of that factual question, the insurer, ANI, had a duty to defend. On a motion to reconsider, to his credit Judge Stearns reversed that ruling:
This ruling put the cart before the horse by conflating the duty to defend with the existence of coverage in the first place. Before a court can determine whether a policy imparts a duty to defend, an applicable policy must be identified.
New Insurance Book Shop Open For Business
My new book shop is open. Books, teleseminars, white-papers, workbooks, ebooks - to help you manage your business better.
www.InsuranceBookShop.com
www.InsuranceBookShop.com
Employment Practices Liability Insurance Exclusions
EPLI policies routinely exclude a number of employment-related actions from coverage including:
-Workers' compensation claims,
-ERISA actions,
-Employment wage disputes (Fair Labor Standards Act),
-Unemployment Insurance,
-Disability benefits law,
-National Labor Relations Act,
-Worker Adjustment and Retraining Notification Act,
-Occupational Safety and Health Act
-Workers' compensation claims,
-ERISA actions,
-Employment wage disputes (Fair Labor Standards Act),
-Unemployment Insurance,
-Disability benefits law,
-National Labor Relations Act,
-Worker Adjustment and Retraining Notification Act,
-Occupational Safety and Health Act
Insurance Success Tip #9 - Consider Pollution Insurance
Almost all liablity insurance policies exclude pollution claims. Consider buying separate policies.
Oil leaks from a heating oil storage tank? No coverage.
Stored chemicals contaminates a neighbor's well? No coverage.
Pollution is found at a vacant site you own? No coverage.
You buy land and find it is contaminated? No coverage.
Your property insurance provides extremely limited coverage for cleanup of pollution at your location when the cause of the loss is a peril covered by your building insurance. The coverage is probably less than $15,000.
Oil leaks from a heating oil storage tank? No coverage.
Stored chemicals contaminates a neighbor's well? No coverage.
Pollution is found at a vacant site you own? No coverage.
You buy land and find it is contaminated? No coverage.
Your property insurance provides extremely limited coverage for cleanup of pollution at your location when the cause of the loss is a peril covered by your building insurance. The coverage is probably less than $15,000.
Superior Court allows adjustment of premiums over insured's argument of mistake
In Nat'l Fire & Marine Ins. Co. v. AT Equipment, Inc., 2009 WL 3086233 (Mass. Super.), AT was insured by National. AT's insurance broker filled out and delivered to AT an insurance application when it was time to renew the policy. The broker had filled in gross sales figures from previous years despite a recent substantial increase in gross sales. AT's managers did not read the entire application, but signed it on behalf of AT.
National issued a new policy which gave National the right to audit AT's records and charge additional premiums if the audit determined that such payments were appropriate. An audit revealed that an additional $102,405 was due in premiums. It sued AT for those premiums and moved for summary judgment.
The Superior Court rejected AT's argument that the policy should be reformed (apparently by removing the clause allowing adjustment of premiums) or voided on the grounds of fraud or mistake. It rejected the fraud argument because no facts indicated actual or constructive knowledge of the falsity of the application on the part of National.
It held that the policy could not be reformed on the grounds of mutual mistake because the parties were not mistaken as to the same matters. AT was mistaken about the accuracy of the contents of its application, and National was mistaken about the appropriate premium.
The court held, finally, that the contract could not be reformed on the grounds of unilateral mistake because National had the right to conduct an audit and correct the premium. Therefore AT, the party seeking to void the contract, bore the risk of the mistake.
National issued a new policy which gave National the right to audit AT's records and charge additional premiums if the audit determined that such payments were appropriate. An audit revealed that an additional $102,405 was due in premiums. It sued AT for those premiums and moved for summary judgment.
The Superior Court rejected AT's argument that the policy should be reformed (apparently by removing the clause allowing adjustment of premiums) or voided on the grounds of fraud or mistake. It rejected the fraud argument because no facts indicated actual or constructive knowledge of the falsity of the application on the part of National.
It held that the policy could not be reformed on the grounds of mutual mistake because the parties were not mistaken as to the same matters. AT was mistaken about the accuracy of the contents of its application, and National was mistaken about the appropriate premium.
The court held, finally, that the contract could not be reformed on the grounds of unilateral mistake because National had the right to conduct an audit and correct the premium. Therefore AT, the party seeking to void the contract, bore the risk of the mistake.
Occupier's Liability Act - Definition of Recreational Trail
Schneider v. St. Clair Region Conservation Authority (2009), 97 O.R. (3d) 81 (C.A.)
Schneider was injured while skiing in a conservation area when she left a marked trail and her ski struck a wall hidden by snow. During the winter months, the area was used for activities such as skiing, tobogganing and hiking, but the defendant did not perform any maintenance of the area. Section 3 of the Occupier’s Liability Act imposes a duty on occupiers to take reasonable care to ensure that people are reasonably safe while on the premises. Where a person willingly assumes the risks of entering premises, section 4(1) of the Act substitutes a lesser duty on the occupier to not create a danger with deliberate intent to do harm and to not act with reckless disregard. Section 4(3) of the Act is a deeming provision that provides that a person who enters certain types of premises that are outlined in section 4(4) is deemed to have willingly assumed the associated risks. Those premises outlined in section 4(4) include such property as rural premises and recreational trails.
The trial judge held that the lesser duty of care did not apply because the premises did not come within one of the categories listed in section 4(4). He noted that although the premises contained recreational trails, the concrete wall was not on one of the trails.
The Court of Appeal allowed the appeal and dismissed the action. The court reviewed the purpose and history of the Occupier’s Liability Act. The purpose of section 4 was to encourage land owners to make their lands available to the public for recreational use. The Court of Appeal sensibly stated that it would make little sense to impose a lesser standard when users remained on the trail, but to impose a higher standard when they veered off of it. The trail was being used by Ms. Schneider for recreation and it met the definition of recreational trail, thus bringing it within the provisions of section 4.
Schneider was injured while skiing in a conservation area when she left a marked trail and her ski struck a wall hidden by snow. During the winter months, the area was used for activities such as skiing, tobogganing and hiking, but the defendant did not perform any maintenance of the area. Section 3 of the Occupier’s Liability Act imposes a duty on occupiers to take reasonable care to ensure that people are reasonably safe while on the premises. Where a person willingly assumes the risks of entering premises, section 4(1) of the Act substitutes a lesser duty on the occupier to not create a danger with deliberate intent to do harm and to not act with reckless disregard. Section 4(3) of the Act is a deeming provision that provides that a person who enters certain types of premises that are outlined in section 4(4) is deemed to have willingly assumed the associated risks. Those premises outlined in section 4(4) include such property as rural premises and recreational trails.
The trial judge held that the lesser duty of care did not apply because the premises did not come within one of the categories listed in section 4(4). He noted that although the premises contained recreational trails, the concrete wall was not on one of the trails.
The Court of Appeal allowed the appeal and dismissed the action. The court reviewed the purpose and history of the Occupier’s Liability Act. The purpose of section 4 was to encourage land owners to make their lands available to the public for recreational use. The Court of Appeal sensibly stated that it would make little sense to impose a lesser standard when users remained on the trail, but to impose a higher standard when they veered off of it. The trail was being used by Ms. Schneider for recreation and it met the definition of recreational trail, thus bringing it within the provisions of section 4.
And now for something completely different . . .
An early 1970's pop-culture look at insurance fraud, with Farrah Fawcett and Colonel Potter thrown into the mix:
The Sound of Money
The Sound of Money
First Circuit holds that D and O policy does not provide coverage where directors and officers are not defendants
In Medical Mut. Ins. Co. v. Indian Harbor Ins. Co., 583 F.3d 57 (1st Cir. 2009) the United States Court of Appeals held that under Maine law a Director and Officer ("D & O") liability policy did not provide coverage where only a company, and not its officers and directors, was the defendant--even though the allegations included wrongful conduct on the part of the officers and directors.
Judge Selya held:
Judge Selya held:
D & 0 polices exist to fund indemnification covenants that protect corporate directors and officers from personal liability, not to protect the corporation by which they are employed. The position advanced by the company in this case - extending coverage to situations in which the directors and officers are not themselves the actual targets of the claims made - would if accepted transmogrify D & 0 policies into comprehensive corporate general liability policies. Because such a tansmogrification is contrary to both the letter and the spirit of the D & O policy at issue here, we affirm the district court's entry of summary judgment in favor of the insurer.
Changes to the Rules of Civil Procedure - Part 6
Substantial changes to the Rules of Civil Procedure come into effect January 1, 2010. This is part 6 of our review of the amendments.
A new rule has been introduced which imposes additional requirements on experts. Rule 4.1 requires experts to sign an acknowledgment agreeing that they have a duty to provide evidence that is:
a) fair, objective and non-partisan;
b) related only to matters within the expert’s expertise;
c) to provide the court with assistance it needs to determine a matter in issue.
Both plaintiffs and defendants have experts that they use and know have a particular slant. Whether this rule actually results in more balanced reports remains to be seen.
The acknowledgement of duty is contained in Form 53 and it must be attached to every expert report to be relied on at trial. A copy of form 53 can be found on the Ministry of the Attorney General website at:
http://www.ontariocourtforms.on.ca/english/civil/
In addition, expert must include additional information in their reports, such as the information relied on in preparing the report. This may open up an argument that the instructing letter should be disclosed. Counsel should therefore be cautious in what information is provided to the expert.
A new rule has been introduced which imposes additional requirements on experts. Rule 4.1 requires experts to sign an acknowledgment agreeing that they have a duty to provide evidence that is:
a) fair, objective and non-partisan;
b) related only to matters within the expert’s expertise;
c) to provide the court with assistance it needs to determine a matter in issue.
Both plaintiffs and defendants have experts that they use and know have a particular slant. Whether this rule actually results in more balanced reports remains to be seen.
The acknowledgement of duty is contained in Form 53 and it must be attached to every expert report to be relied on at trial. A copy of form 53 can be found on the Ministry of the Attorney General website at:
http://www.ontariocourtforms.on.ca/english/civil/
In addition, expert must include additional information in their reports, such as the information relied on in preparing the report. This may open up an argument that the instructing letter should be disclosed. Counsel should therefore be cautious in what information is provided to the expert.
Massachusetts Appellate Division overturns summary judgment to PIP insurer for failure to show decision-making process
In N.E. Physical Therapy Plus, Inc. v. Commerce Ins. Co., 2009 WL 3381750 (Mass. App. Div.), physical therapist NEPT sued Commerce pursuant to Mass. Gen. Laws ch. 90 § 34M (the PIP statute) and ch. 93A § 11 (the consumer protection statute) for failing to pay physical therapy bills on behalf of Commerce's insured, who was entitled to PIP benefits.
After suit was filed Commerce paid the disputed bill, which extinguished the ch. 90 § 34 M claim. Commerce then moved for summary judgement on the 93A claim. In support of its motion Commerce submitted only an affidavit of a Commerce employee.
The court denied Commerce's motion for summary judgment, holding:
After suit was filed Commerce paid the disputed bill, which extinguished the ch. 90 § 34 M claim. Commerce then moved for summary judgement on the 93A claim. In support of its motion Commerce submitted only an affidavit of a Commerce employee.
The court denied Commerce's motion for summary judgment, holding:
The Affidavit is composed almost entirely of the affiant's facile and conclusory characterizations of Commerce's claims records. Even if the Affidavit were admissible in its entirety, a question we do not reach here, Commerce's summary judgment materials provide no insight into Commerce's strategy for handling NEPT's claims; into the particulars of Commerce's decision-making process with respect to those claims; into the results of any expert review of the claims; or, in fact, into any of the subjective questions on which G.L. c. 93A claims generally rise and fall.
"Blind Side" Movie Review
I normally do not do movie reviews, but the The Blind Side is a movie that is so meaningful that I just must encourage you togo and see it.
Sandra Bullock is entirely convincing as a strong Southern woman of conviction. Tim McGraw has no trouble looking like a man married to a woman like her, since he has a lot of practice married to superstar Faith Hill.
I think that the character who plays Michael Oher was strong, but vulnerable in way I did not think a man his size could be.
This is a true story, based a Memphis family and Oher played at Briarcrest Christian School (something they changed in the movie). It is not just "a football movie." Non sports fans have loved it too.
There is some objectionable language, but it is not gratuitous. It is rather realistic. Parental guidance, if it is truly guidance, can make this a movie for younger than age 13 in some families.
Oher now plays very well for a very average Ravens NFL team.
But 1 Corinthians chapter 13, says that love never fails.
In fact, love overcomes racial, socioeconomic and cultural differences. .. If we just let it.
Client Comment
"Your work for us is as important as any insurance policy we buy."
Bill Swales
Bangor Savings Bank
Bill Swales
Bangor Savings Bank
Risk Management Advice
Each fall I teach a class on small biz management at a local community college. We just finished a unit on risk management. Here are some of the suggestions I made...
--Review your insurance with your insurance agent at least annually
--Backup your computer data up every night - off site.
--Hire employees slow. Fire them fast. - Good people a gold. Deadwood will kill
your company.
--Run background checks on every new hire, check references, credentials, and
talk with former employers.
--Build a company culture that values honesty and integrity.
--Build systems that prevent employee theft.
Judge Fremont-Smith of the Superior Court holds that damages both did and may not have arisen out of use of a vehicle
In Leone v. Schwartz, 2009 WL 3416398, the plaintiff, Leone, was a police officer who responded to an accident in which Schwartz's car had crashed through a fence and some small trees. Leone alleged that as he approached the car on foot, he lost his balance and fell in an area that was covered with debris from the fence, broken tree limbs, and snow and ice.
Leone sued Schwartz's homeowner's insurer, Great Northern, and automobile insurer, Arbella. Judge Fremont-Smith held on summary judgment that there was no coverage under the homeowner's policy because the policy excludes "damages arising out of the . . . use . . . of any motorized land vehicle." He wrote:
Judge Fremont-Smith then turned to the automobile policy, which provided coverage for "damage to people injured or killed in accidents if you or a household member is legally responsible for the accident." "Accident" is defined in the policy as "an unexpected, unintended event that caused bodily injury or property damages arising out of the ownership, maintenance or use of an auto."
Although two paragraphs earlier Judge Fremont Smith had held that as a matter of law the accident arose out of the use of the car, he now wrote:
Judge Fremont-Smith concluded that if Leone fell on pieces of broken fence or other debris caused by the accident there would be coverage under the policy, but that if he slipped only on snow and ice or other debris that was not caused by the accident there would be no coverage.
I'm all for splitting hairs in interpreting insurance policies. I make my living doing it. But I do not see how the same opinion can hold as a matter of law that the damages arose out of the use of a vehicle and also hold that whether the injury arose out of the ownership, maintenance or use of the auto is a question of fact. In my opinion the judge can't have it both ways.
Leone sued Schwartz's homeowner's insurer, Great Northern, and automobile insurer, Arbella. Judge Fremont-Smith held on summary judgment that there was no coverage under the homeowner's policy because the policy excludes "damages arising out of the . . . use . . . of any motorized land vehicle." He wrote:
The allegations are that Schwartz negligently drove his motor vehicle off a road and into a lawn, causing the plaintiff to investigate the accident scene and suffer a "slip and fall" injury. The only theory on which Schwartz could be held liable, then, is as a result of his allegedly negligent operation of a motor vehicle, for which the policy excludes coverage.
Judge Fremont-Smith then turned to the automobile policy, which provided coverage for "damage to people injured or killed in accidents if you or a household member is legally responsible for the accident." "Accident" is defined in the policy as "an unexpected, unintended event that caused bodily injury or property damages arising out of the ownership, maintenance or use of an auto."
Although two paragraphs earlier Judge Fremont Smith had held that as a matter of law the accident arose out of the use of the car, he now wrote:
The fact that Schwartz's operation of a motor vehicle provides the only possible basis for his liability, so that Great Northern's motion must be allowed, does not necessarily mean that Arbella's motor vehicle policy provides coverage. It is true that, but for Scwartz's vehicle having gone off the road and onto a lawn, Leone would not even have been there. But this does not necessarily mean that Leone's injury arose out of Schwartz's operation of a vehicle. The vehicle was stationary when Leone arrived at the scene, and he has admitted that the yard in which he fell was covered by debris, snow, and ice. Even if the undisputed facts were to indicate that Schwartz was negligent in his operation of his vehicle, it is a disputed question of fact whether Leone's injuries arose out of Schwartz's use of his motor vehicle.
Judge Fremont-Smith concluded that if Leone fell on pieces of broken fence or other debris caused by the accident there would be coverage under the policy, but that if he slipped only on snow and ice or other debris that was not caused by the accident there would be no coverage.
I'm all for splitting hairs in interpreting insurance policies. I make my living doing it. But I do not see how the same opinion can hold as a matter of law that the damages arose out of the use of a vehicle and also hold that whether the injury arose out of the ownership, maintenance or use of the auto is a question of fact. In my opinion the judge can't have it both ways.
Appellate Division holds that insurer does not need to show prejudice from violation of duty to cooperate
In Trinidad v. Pilgrim Insurance Company, 2009 WL 3844469 (Mass. App. Div.), the insured sought PIP coverage. He skipped two medical examinations scheduled by the insurer. The insurer denied coverage on the grounds that the insured failed to cooperate.
The insured argued that the insurer failed to prove that it had been prejudiced by his failure to cooperate. The Massachusetts Appellate Division held that a showing of prejudice is not required. It noted that both the PIP statue and the policy required the insured to submit to medical exams by physicians selected by the insurer. The court held:
The insured argued that the insurer failed to prove that it had been prejudiced by his failure to cooperate. The Massachusetts Appellate Division held that a showing of prejudice is not required. It noted that both the PIP statue and the policy required the insured to submit to medical exams by physicians selected by the insurer. The court held:
Neither the policy, nor the statute, requires an insurer to show prejudice before invoking the defense of noncooperation by the claimant as a condition precedent to denying a claim.
Changes to the Rules of Civil Procedure - Part 5
Substantial changes to the Rules of Civil Procedure come into effect January 1, 2010. This is part 5 of our review of the amendments.
Rule 20 governs summary judgment. The amendments to this rule are substantial and have the potential to make it a more valuable tool than it currently is. The changes to rule 20 will permit judges expansive powers; they will be able to weigh evidence, make inferences and evaluate credibility. Judges will also be able to hear oral evidence on a summary judgment motion to order to assist them in making decisions, rather than relying on affidavit evidence.
These changes have the potential to assist in disposing of claims at an early stage, rather than waiting until a full trial occurs, with its associated time and expense. What remains to be seen is whether judges are prepared to utilize the new rule to its full potential.
If a judges declines to grant summary judgment or grants summary judgment in part, judges have a wide variety of powers. One of the more interesting powers is the ability to order that each party's expert meet to discuss areas of agreement and disagreement. This power appears contradictory to the intent of the amendments, which focuses on reducing costs and increasing access to justice, as well as proportionality. Requiring experts to meet will increase costs to litigants and adds a level of administration because it requires coordination of the experts' schedules. Practically speaking, one would think that this would be an exceptional remedy due to the costs considerations and that where experts are diametrically opposed, there is no real use in having them try to persuade each other.
Another substantial change to summary judgment is that the costs consequences of a failed summary judgment motion have been relaxed. The current rule imposes substantial indemnity costs against the unsuccessful party; the new rule eliminates the presumption of substantial indemnity costs. The current rule has served as a deterrent to bringing summary judgment motions for fear of the costs consequences. The new rule may encourage its use as even if a party is not successful, the consequences are not as severe as in the past.
Rule 20 governs summary judgment. The amendments to this rule are substantial and have the potential to make it a more valuable tool than it currently is. The changes to rule 20 will permit judges expansive powers; they will be able to weigh evidence, make inferences and evaluate credibility. Judges will also be able to hear oral evidence on a summary judgment motion to order to assist them in making decisions, rather than relying on affidavit evidence.
These changes have the potential to assist in disposing of claims at an early stage, rather than waiting until a full trial occurs, with its associated time and expense. What remains to be seen is whether judges are prepared to utilize the new rule to its full potential.
If a judges declines to grant summary judgment or grants summary judgment in part, judges have a wide variety of powers. One of the more interesting powers is the ability to order that each party's expert meet to discuss areas of agreement and disagreement. This power appears contradictory to the intent of the amendments, which focuses on reducing costs and increasing access to justice, as well as proportionality. Requiring experts to meet will increase costs to litigants and adds a level of administration because it requires coordination of the experts' schedules. Practically speaking, one would think that this would be an exceptional remedy due to the costs considerations and that where experts are diametrically opposed, there is no real use in having them try to persuade each other.
Another substantial change to summary judgment is that the costs consequences of a failed summary judgment motion have been relaxed. The current rule imposes substantial indemnity costs against the unsuccessful party; the new rule eliminates the presumption of substantial indemnity costs. The current rule has served as a deterrent to bringing summary judgment motions for fear of the costs consequences. The new rule may encourage its use as even if a party is not successful, the consequences are not as severe as in the past.
Competition
To me competition is the best way to get the best price and best insurance coverage. Getting multiple agents and multiple insurers beating each other like a cheap drum always results in good things for the insurance buyer.
Having only one agent who works with multiple insurance companies may be better than just renewing your current insurance. However, true competition only exists when everyone involved in the bid process thinks they may lose.
The threat of loss is a huge motivator for insurers and insurance agents, as it should be.
Having only one agent who works with multiple insurance companies may be better than just renewing your current insurance. However, true competition only exists when everyone involved in the bid process thinks they may lose.
The threat of loss is a huge motivator for insurers and insurance agents, as it should be.
The Limit to the Question of Limits
Reader Question:
Hi Scott –
I have read your articles at Guidestar and on your site about D&O for nonprofits. What I can’t seem to find is what criteria to use to determine the limit. I’m part of a nonprofit COO group on LinkedIn and asked others in the group. The few answers I received indicated that limits were suggested by the Board in relation to how risk averse certain individual board members were.
I’d like something a bit more analytical and my board is looking to me to help them analyze and assess their risk. Going from a $2M to a $5M limit increases our premium pretty significantly, so I’d like to make sure that it is called for. Any guidance you can give?
My Reply:
This is the most common question I get.
There are no quantitative answers - past a minimum level. Anyone who gives you a formula is making stuff up.
I have reviewed your financials. To me, $5m is a minimum for you. Your assets and the overall operations tell me you are well past the $2m point.
Beyond $5m I recommend a value based approach. How much is the next million and is it worth it to you and the board? If the 6th m cost $500 you buy it. If it's $5,000 you probably don't buy it.
Sorry I have no magic formula. It just does not exist - beyond superfluousness.
More important than the 5 to 6 million decision is the quality of your coverage. Is the coverage what it should be? What exclusions exist? Can you get a better policy at a better price with another insurer?
Glad to help more if I can.
There are no quantitative answers - past a minimum level. Anyone who gives you a formula is making stuff up.
I have reviewed your financials. To me, $5m is a minimum for you. Your assets and the overall operations tell me you are well past the $2m point.
Beyond $5m I recommend a value based approach. How much is the next million and is it worth it to you and the board? If the 6th m cost $500 you buy it. If it's $5,000 you probably don't buy it.
Sorry I have no magic formula. It just does not exist - beyond superfluousness.
More important than the 5 to 6 million decision is the quality of your coverage. Is the coverage what it should be? What exclusions exist? Can you get a better policy at a better price with another insurer?
Glad to help more if I can.
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