Many in U.S. can't afford life insurance

Thirty percent of U.S. households have no life insurance, and only 44 percent have individual life insurance -- both 50-year lows -- the latest survey from industry tracker Limra found.
In 2009, insurance companies issued 9.4 million individual life insurance policies in the U.S., 1 million fewer than in 2004. During the mid-1980s, roughly twice as many policies were issued compared with today, according to Limra.
The reason for the decline: More than 40 percent of respondents said they have other financial priorities right now.
"People are feeling very pressured and unable to pay all of their bills now," said Catherine Theroux, a Limra spokeswoman. "They're struggling financially, so they're not opting to buy life insurance except in their employer-sponsored program."
Other findings:
1 in 4 rely only on group life insurance through their employer to provide financial protection if a wage-earner dies.
15 percent said one or more of their breadwinners lost their job, so for those in an employer-sponsored life insurance plan, the loss of the job meant a loss of life insurance coverage.
Among households with children under 18, four in 10 said they would immediately have trouble meeting everyday living expenses if a primary wage-earner died today.
-- Francine Knowles

4 Ways Life Insurance Pays -- Even if You Don't Die

Posted by April Peveteaux
Got life insurance? You probably don't, if the reports from the Wall Street Journal are accurate. Another negative side effect of the unemployment rate, almost a third of Americans are without any kind of life insurance coverage. This is the highest rate in four decades, with 35 million households uninsured.

While cutting back is partially to blame, people who depended on their company to provide life insurance lost that benefit when they received their pink slip. Regardless, it's usually not on the top of the list when you find yourself unemployed. But it should be.

Life insurance may not be something you think about every day, but if you have kids, you have to prepare for the worst. Even if you don't have children, it's a good idea to have some kind of coverage.

Of course a benefit that kicks in after you die can be a hard sell when you're on the unemployment line, but there are ways to make that policy work for you even if you're still kicking.

1. Cash Money
Your life insurance can serve two purposes -- a death benefit and an investment. If you choose whole, universal, or some types of variable life insurance, you have the option to surrender your policy and receive the cash value. A portion of your premiums can be invested into a type of savings account (policy depending), and after interest accrues, it's all yours if you cash out your policy.

2. Loan Collateral
Again, if you purchase whole life insurance, your account can be seen as an investment, and therefore you can use it when you need to get a loan. Some policies allow you to borrow against the cash value of your life insurance, giving you more to work with when you're in a bind.

3. Annual Dividends
If you purchase a participating policy, you're entitled to company profits as if you were a shareholder in the organization. You can either get a cash payment ever year, reinvest in more insurance, or use the dividends to pay those monthly premiums.

4. Getting Rid of That Nagging Feeling
Maybe you had to brake suddenly and narrowly missed a collision on the freeway, or heard a devastating story about a colleague being diagnosed with a terminal disease. Those moments where mortality hits you in the face are panic-inducing, even more so if you go without life insurance. Get that monkey off your back and call an insurance agent today.

Do you have life insurance?

http://thestir.cafemom.com/in_the_news/108752/4_ways_life_insurance_pays

Life Insurance Payouts: Are You Earning Enough on the Money?

By Jane Bryant Quinn
Did you get a payout from a life insurance policy? Is it sitting in a special checking account provided by the insurance company?

A class action lawsuit, filed recently and amended today, slams the Prudential Insurance Company of America for taking financial advantage of beneficiaries. Pru earns 5 to 6 percent on that money, the complaint says, while crediting the accounts with an interest rate of only 0.5 to 1.2 percent. The families think that all the earnings should belong to them.

Whether Pru owes more money is up to a judge and jury to decide. At present, these accounts provide the same service that you’d get from a bank money market account and are paying about the same amount of interest. They make sense as a way of managing large lump sums, short term.

What I question is whether families are unfairly steered into this insurance-company deal when it might have been better to ask for a check in the mail.

But first, a word about the lawsuit. It got a lot of press because the policies were issued under the Servicemembers’ Group Life Insurance program, available to military men and women and administered by Prudential. Jeffrey M. Lucey, who died in 2004, named his parents, Joyce and Kevin, as beneficiaries of his $250,000 policy. Scott W. Eiswert, who died in 2008, left his wife, Tracy, $400,000. They could choose a lump-sum payout or spread it out over many months. Four other military families have joined the complaint.

Pru, like most insurance companies, automatically put the lump-sum payouts into what’s known as a retained-asset account. It’s a holding pen for cash — for military and nonmilitary families alike. Beneficiaries get checkbooks and can write checks or (”drafts”) on those accounts at any time and for any amount, including the lump sum. The Luceys took out their money gradually, over five years. Ms. Eiswert took hers within eight months.

Retained-asset accounts are invested along with the insurers’ general pool of money. The company fixes your interest rate and can change it at any time.

Currently, Pru pays 0.5 percent. That’s the same as my bank pays on money market accounts of at least $50,000. Some banks and credit unions pay more (yes, I should change my bank). Money market mutual funds yield about 0.2 percent today. So for cash you can tap at any time, the insurance company looks okay. If you die while holding a retained asset account, the interest as well as the principal goes to heirs untaxed.

The advantage of a retained-asset account is that it saves you from thinking about money at an emotionally difficult time. It also saves mistakes. “We don’t think that a check in the mail is the best settlement option for beneficiaries,” says Pru spokesperson Bob DeFillippo. “It might be dropped into a drawer and forgotten, or mislaid.” It’s also convenient for paying current expenses.

On the other hand, you might want that lump sum immediately, to invest in a higher paying certificate of deposit.

The claim form for military policies tells the families that lump sums are paid through retained-asset accounts. It doesn’t mention putting checks directly into the mail. DeFillippo says that Pru will send checks but families have to call and ask about it.

“The client decides on the options,” DeFillippo says. “The Department of Veterans Affairs tells us what to do.” Questions left with the DVA weren’t answered by the time I filed this column. Pru and the department are currently in discussions about handling these accounts.

On nonmilitary payouts, you might or might not be told about direct pay. In the past two years, Pru has disclosed this option when beneficiaries make a claim, but only in a separate brochure. The simple, one-stop and recommended choice is the insurance account.

There are two potential drawbacks to retained-asset accounts compared with bank options. They aren’t insured by the Federal Deposit Insurance Company. If the insurance company failed, you’d be covered for $300,000 in most states ($500,000 in some) by the industry-backed State Guaranty Funds. Bank and credit union accounts are insured for up to $250,000, but you can multiply your coverage by using different types of accounts or dividing your money among different banks.

Also, liability isn’t clear if someone forges your name on the check. In two lawsuits against MetLife, reported by Bloomberg magazine, the insurance company and the bank that administered the accounts pointed fingers at each other and both declined to pay. (Eventually, judges ruled that banks might have liability and the parties settled). If you had your own account, the bank would be liable for cashing a forged check.

Regardless of the new lawsuit’s merits, it’s stirring up some state insurance regulators. Kentucky prohibited insurance companies from putting money into retained-asset accounts automatically. They first have to first disclose the terms and get the beneficiary’s consent. If there’s no reply, the check is mailed out. A number of other states are considering similar proposals.

Retained-asset accounts are a reasonable and convenient choice, and will be better if better disclosed. But don’t leave the money there long. For long-term support, you want the payout invested for higher income and growth.

http://moneywatch.bnet.com/investing/blog/make-money/life-insurance-payouts-are-you-earning-enough-on-the-money/438/n

Nicholas Ellis, disbarred for insurance fraud, has been reinstated to Massachusetts bar

In In re Nicholas J. Ellis, 45 7 Mass. 413 (2010), the Supreme Judicial Court ruled last month that Nicholas Ellis, who had been disbarred in 1997 for insurance fraud, could be reinstated to the practice of law.

Ellis had been disbarred for knowingly submitting fraudulent medical records to insurance companies. His actions were part of a larger scheme by his personal injury law firm, Ellis & Ellis, to defraud insurance companies.

The SJC has found that Nicholas has been rehabilitated.

The court found that when Nicholas joined Ellis & Ellis he was new to the practice of law. The firm was established by his father and "tightly controlled" by his brother. Nicholas' wrongdoing was minor compared to the wrongdoing of the firm and his brother.

The court weighed Nicholas' wrongdoing against his post-disbarment activities, which included being the at-home parent to his children while his wife worked, attempting to become a teacher (he was unable to obtain employment because of his convictions), coaching youth teams, and charitable work through his church. He also expressed remorse about his wrongdoing.

I have mixed feelings about the ruling. It irks me that Nicholas gets brownie points for staying home with his kids. If he were a woman, would the SJC give him rehabilitation points for doing that, or for coaching a kid's team, or for doing volunteer work with a church? And I'm not too impressed with his studying to be a teacher when no school in its right mind would hire him.

It also bothers me that the SJC states that his new practice areas are sufficiently distinct from his old personal injury practice. One of his new practice areas is social security disability law. Forged medical records work just as well with the government as with insurance companies.

On the other hand, I like the idea of rehabilitation. I applaud the notion that each of us can grow beyond whatever stupid, wrong or unethical ideas we were indoctrinated with by our families, even if that growth comes in middle age.

So I give Nicholas the benefit of the doubt. Welcome back to the practice of law. I hope you prove worthy.

Property Valuation - Insurance Valuation

I was cleaning out some file drawers last week and found a document that I must have placed in the file when I first started in the insurance business, 30 years ago.



It's from Millers Mutual Insurance Company. The paper describes the different ways that property can be valued. No author is listed, so I cannot give proper attribution. I am borrowing (and updating) the ideas here.



The paper describes a commercial property.



Original Cost: $1,500,000

Fair Market Value: $2,500,000

Orderly Liquidation Value: $1,500,000

Forced Liquidation Value: $750,000

Replacement Cost: $4,000,000

Net Book Value: $500,000

Actual Cash Value: $3,000,000 (The article is so old it calls this "insurable value.")



To the above we could add "Functional Replacement Cost," the cost to replace the structure to its function.



Let's say that is $3,500,000.



Insurance is concerned with Replacement Cost (the cost to replace using current cost of materials and labor), Actual Cash Value (the replacement cost minus depreciation), and functional replacement cost.



Original Cost, Market Value, Liquidation Value, and Book Value are of no importance in 99.9% of property insurance policies.



Most property insurance policies are written to Replacement Cost.



When I started in the insurance business, I recall arguing with an underwriter who would not write replacement cost insurance. He said it was against the principles of insurance, as it put an insured at a place better off from where he was the day before the fire.



I recall hearing that some Western state banned replacement cost coverage.



Talk with your insurance advisor about how the property on your insurance is valued. Consider what you would do if your building was destroyed. Share your plans with your advisor so she can structure your policy correctly.

New York trial court orders reinsurers to pay USF&G $246 million plus interest

Insurance attorneys talk about reinsurance cases in the same manner that divorce attorneys talk about probate court: it's a world unto itself, with its own language, rules and folkways, and not a place where one necessarily wants to wander without a guide.

Reinsurance is insurer's insurance. An insurer purchases reinsurance to protect itself from unusually high losses. For example, an insurer providing property coverage to many insureds in an area devastated by a hurricane might turn to its reinsurer to cover aggregate losses over a certain amount.

This week a major reinsurance decision was issued by a New York trial court. Although Massachusetts law is not discussed, I am writing about it here because the case illustrates issues that often come up in long-tail loss cases, including lost policies, business successions, allocation and trigger disputes, and cost-benefit analyses by insurers about when to stop fighting and start settling. And because anyone interested in the insurance world should be aware of a case in which a court orders this much money to change hands from one insurer to another.

Between 1948 and 1960 insurer USF&G issued a number of liability policies to Western Asbestos, which sold products containing asbestos.

In the mid-1960's, Western MacArthur purchased most of the assets of Western Asbestos and took over its business.

In the late-1970's, individuals injured by asbestos began suing Western MacArthur in its own right and as successor to Western Asbestos.

In 1993 Western MacArthur inititated in California a coverage action against USF&G and two other insurers, seeking coverage for the asbestos cases.

USF&G argued that Western MacArthur did not have standing to assert coverage under policies issued to Western Asbestos. To defeat that argument, Western MacArthur found a former officer of Western Asbestos and persuaded him to sign an assignment of insurance rights to Western MacArthur. Western MacArthur also convinced a California court to "revive" the long-defunct Western Asbestos to ratify the agreement. Western Asbestos intervened in the coverage litigation as plaintiff. The court ruled that USF&G lacked standing to challenge the purported assignment of insurance rights to Western MacArthur.

Neither Western MacArthur nor USF&G could locate the policies at issue. The plaintiffs presented "secondary evidence" that USF&G's lost policies provided products coverage without aggregate limits.

As a side note, Michael Aylward of Morrison Mahoney LLP circulated this fascinating, quirky article on how the plaintiffs proved coverage under lost policies.

At that point USF&G decided to engage in global settlement discussions.

In June, 2002 the parties reached a settlement agreement under which USF&G agreed to pay $975 million plus interest.

USF&G then sought coverage from its reinsurers, American Re and ECRA. That brings us to state court in New York, in the case of United States Fid. & Guar. Co. v. Am. Re-Ins. Co..

This week the court denied summary judgment to the reinsurers and granted summary judgment to USF&G, and ordered the reinsurers to pay USF&G $246 million plus 60 percent interest.

Although I'm not going to discuss the court's reasoning, I would be happy to forward a copy of the decision to anyone who wants it (thanks again to Mike Aylward who forwarded it to me and the rest of the people on the Massachusetts Reinsurance Bar Association email list).

No obligation to seek clarification of a non-party witness

Arunasalam v. Guglietti Estate, [2010] O.J. No. 3303 (S.C.J.)

The question to be answered in this motion with respect to refusals on examination for discovery was this: when counsel provides a summary of the anticipated evidence of a witness, is counsel required to seek clarification or further information from that witness?

Master Short held that although counsel must provide a summary of the substance of the evidence of a non-party witness, that obligation does not extend to obtaining further particulars and clarification. If the non-party witness is unwilling to provide clarification or further information to counsel opposite, it may be appropriate to bring a motion under Rule 31.10 in order to compel discovery of the non-party.

First Circuit holds that under Maine law, a claim for reimbursement of educational expenses is a claim for money damages

Andrew Caplan of Gilbert & Renton, LLC sent me this case, decided by the First Circuit Court of Appeals last week:

In School Union No. 37 v. United Nat'l Ins. Co., __ F.3d __, 2010 WL 3260113 (1st Cir.), the court decided the scope of an Educator's Liability Policy.

The plaintiff, School Union 37, sought from its insurer costs incurred in defending a claim for reimbursement of non-tuition expenses, such as room, board and transportation, under the federal Individuals with Disabilities Education Act (IDEA).

The insurance policy required the insurer to "pay on behalf of the Insureds loss and defense expenses . . . for any claim due to a Wrongful Act to which the policy applies." The policy defined "claim" as "any written demand for money damages to which the policy applies."

At issue was whether the third-party claim for reimbursement was a claim for "money damages," which was undefined in the policy.

The court first held that the common law definition of money damages under IDEA is irrelevant to the definition of money damages in an insurance policy. Rather, the definition would be determined by the Maine law of contract interpretation.

The court held that, interpreting ambiguous language against the insurer, the term "money damages" encompassed the reimbursement at issue. The insured was therefore entitled to the attorney's fees it incurred.

Massachusetts Appeals Court holds that foreclosing mortgagee is not entitled under mortgagor's policy to lost rent

Pereira owned a multi-unit rental property. Greenpoint was the mortgagee. (For those of you who have trouble keeping straight which is the mortgagor and which is the mortgagee, as my property law professor used to say, "The mortgagEE [the bank] has the monEY.")

A fire rendered all of the rental units uninhabitable. GreenPoint subsequently transferred and assigned the mortgage and associated agreements to Casco Bay. The decision does not address whether Casco Bay was aware that it was acquiring the mortgage of a destroyed property.

Pereira defaulted on his mortgage loan. Casco Bay foreclosed and purchased the property. Unsurprisingly, a large deficiency remained.

Casco Bay sought to recover lost rent on the property from Pereira's business owner's insurance policy. In Casco Bay Fin. Co., LLC v. Quincy Mut. Fire Ins. Co., 77 Mass. App. Ct. 913 (2010, the Massachusetts Appeals Court held that the standard mortgage clause, mandated by Mass. Gen. Laws ch. 175 § 88, Twelfth, does not provide coverage to a mortgagee for lost rent where the mortgagor has executed an assignment of rent to the mortgagee. The mortgage clause provides, "We will pay for covered loss of or damage to real estate to each mortgageholder . . . " The court held that rent is not included in the meaning of "real estate."

The court also held that Casco Bay could not recover under the policy's coverage for loss of business income. It held that that coverage is limited to loss of business income sustained by Pereira and was for his benefit only. Pereira's assignment of rents to the mortgagee did not give the mortgagee the right to recover, because the policy provides that the insured's rights and duties may not be transfered without the insurer's written consent.

Thanks to Mike Tracy of Rudolph Friedmann LLP for bringing this case to my attention.

non genesis support for creation

Creation v. Evolution Part 9 of 12

Ignoring Genesis?

It has been said that there is a “battle going on for Genesis.” In fact, strenuous debate about the first book of the Bible abounds all over the web. Ministries like Answers in Genesis (www.AnswersinGenesis.org ) and Institute for Creation Research (www.ICR.org) have become lightening rods in the issue.

However, the threads of an act of Creation actually run throughout the whole of Scripture. These “non-Genesis” verses often surround other unquestioned passages near and dear too many believers. For instance, the well-known gospel verse John 3:16 is proceeded by John 1:1-5 which speaks of all being made in the beginning by Christ. Some of these non-Genesis verses undergird His traits from our Salvation to the Second Coming. Notice that Creation is not referred to as forming gradually over time, but as a act.

Therefore, after reading just these few selected verses referencing Creation, one may well conclude that folks with a problem with a literal Genesis, might have serious concerns with most of the rest of Scripture itself. Judge for yourself:

Creation in seven literal days as a historical model:

Leviticus 25:3-5 Six years you shall sow your field, and six years you shall prune your vineyard, and gather in their yield; but in the seventh year there shall be a Sabbath of complete rest for the land, a Sabbath for the LORD: you shall not sow your field or prune your vineyard. You shall not reap the after growth of your harvest or gather the grapes of your unpruned vine: it shall be a year of complete rest for the land. (Based upon the creation week).

Control over all Creation as evidence of His Sovereignty:

Deuteronomy 10:14 Heaven and the heaven of heavens belong to the LORD your God, the earth with all that is in it.

1 Chronicles 29:11 Yours, O LORD, are the greatness, the power, the glory, the victory, and the majesty; for all that is in the heavens and on the earth is yours; yours is the kingdom, O LORD, and you are exalted as head above all.

His planned Creation as evidence of His greatness:

Job 38:1-7 Then the LORD answered Job out of the whirlwind: "Who is this that darkens counsel by words without knowledge? Gird up your loins like a man, I will question you, and you shall declare to me. Where were you when I laid the foundation of the earth? Tell me, if you have understanding. Who determined its measurements-- surely you know! Or who stretched the line upon it? On what were its bases sunk, or who laid its cornerstone when the morning stars sang together praise."

Job 38:25-27 "Who has cut a channel for the torrents of rain, and a way for the thunderbolt, to bring rain on a land where no one lives, on the desert, which is empty of human life, to satisfy the waste and desolate land, and to make the ground put forth grass?"

Job 38:28-30 "Has the rain a father, or who has begotten the drops of dew? From whose womb did the ice come forth, and who has given birth to the hoarfrost of heaven? The waters become hard like stone, and the face of the deep is frozen." (Job was likely penned during the ice age that followed the volcanic eruptions of the flood)

Creation testifies, even now, to the Glory of God to the lost.

Psalm 19:1-4 The heavens are telling the glory of God; and the firmament proclaims his handiwork. Day to day pours forth speech, and night to night declares knowledge. There is no speech, nor are there words; their voice is not heard; yet their voice goes out through all the earth, and their words to the end of the world. In the heavens he has set a tent for the sun,

Psalm 24:1-2 The earth is the LORD's and all that is in it, the world, and those who live in it; for God has founded it on the seas, and established it on the rivers.

Romans 1:20 For since the creation of the world God's invisible qualities—his eternal power and divine nature—have been clearly seen, being understood from what has been made, so that men are without excuse.

Creation is evidence of our hope of Salvation:

Psalm 65:5-13 By awesome deeds you answer us with deliverance, O God of our salvation; you are the hope of all the ends of the earth and of the farthest seas. By your strength you established the mountains; you are girded with might. You silence the roaring of the seas, the roaring of their waves, the tumult of the peoples. Those who live at earth's farthest bounds are awed by your signs; you make the gateways of the morning and the evening shout for joy. You visit the earth and water it, you greatly enrich it; the river of God is full of water; you provide the people with grain, for so you have prepared it. You water its furrows abundantly, settling its ridges, softening it with showers, and blessing its growth. You crown the year with your bounty; your wagon tracks overflow with richness. The pastures of the wilderness overflow, the hills gird themselves with joy, the meadows clothe themselves with flocks, the valleys deck themselves with grain, they shout and sing together for joy.

Creation as evidence of God’s power:

Psalm 104:1-6 Bless the LORD, O my soul. O LORD my God, you are very great. You are clothed with honor and majesty, wrapped in light as with a garment. You stretch out the heavens like a tent, you set the beams of your chambers on the waters, you make the clouds your chariot, you ride on the wings of the wind, you make the winds your messengers, fire and flame your ministers. You set the earth on its foundations, so that it shall never be shaken. You cover it with the deep as with a garment; the waters stood above the mountains.

Creation as evidence of God’s provision for even the lowest beast:

Psalm 104:14-21 You cause the grass to grow for the cattle, and plants for people to use, to bring forth food from the earth, and wine to gladden the human heart, oil to make the face shine, and bread to strengthen the human heart. The trees of the LORD are watered abundantly, the cedars of Lebanon that he planted. In them the birds build their nests; the stork has its home in the fir trees. The high mountains are for the wild goats; the rocks are a refuge for the coneys. You have made the moon to mark the seasons; the sun knows its time for setting. You make darkness, and it is night, when all the animals of the forest come creeping out. The young lions roar for their prey, seeking their food from God.

Matthew 6:26-29 "Look at the birds of the air, that they do not sow, neither do they reap, nor gather into barns, and yet your heavenly Father feeds them. Are you not worth much more than they? And which of you by being anxious can add a single cubit to your life's span? And why are you anxious about clothing? Observe how the lilies of the field grow; they do not toil nor do they spin, yet I say to you that even Solomon in all his glory did not clothe himself like one of these."

Creation of mighty Dinosaurs--along with Man at the beginning:

Job 40: 15-24 Look at the behemoth, which I made along with you and which feeds on grass like an ox. What strength he has in his loins, what power in the muscles of his belly! His tail sways like a cedar; the sinews of his thighs are close-knit. His bones are tubes of bronze, his limbs like rods of iron. He ranks first among the works of God, yet his Maker can approach him with his sword. The hills bring him their produce, and all the wild animals play nearby. Under the lotus plants he lies, hidden among the reeds in the marsh. The lotuses conceal him in their shadow; the poplars by the stream surround him. When the river rages, he is not alarmed; he is secure, though the Jordan should surge against his mouth. Can anyone capture him by the eyes, or trap him and pierce his nose?

Job 41:1- 34 Can you pull in the leviathan [a] with a fishhook or tie down his tongue with a rope? Can you put a cord through his nose or pierce his jaw with a hook? Will he keep begging you for mercy? Will he speak to you with gentle words? Will he make an agreement with you for you to take him as your slave for life? Can you make a pet of him like a bird or put him on a leash for your girls? Will traders barter for him? Will they divide him up among the merchants? Can you fill his hide with harpoons or his head with fishing spears? If you lay a hand on him, you will remember the struggle and never do it again! Any hope of subduing him is false; the mere sight of him is overpowering. No one is fierce enough to rouse him. Who then is able to stand against me? Who has a claim against me that I must pay? Everything under heaven belongs to me." I will not fail to speak of his limbs, his strength and his graceful form. Who can strip off his outer coat? Who would approach him with a bridle? Who dares open the doors of his mouth, ringed about with his fearsome teeth? His back has rows of shields tightly sealed together; each is so close to the next that no air can pass between. They are joined fast to one another; they cling together and cannot be parted. His snorting throws out flashes of light; his eyes are like the rays of dawn. Firebrands stream from his mouth; sparks of fire shoot out. Smoke pours from his nostrils as from a boiling pot over a fire of reeds. His breath sets coals ablaze, and flames dart from his mouth. Strength resides in his neck; dismay goes before him. The folds of his flesh are tightly joined; they are firm and immovable. His chest is hard as rock, hard as a lower millstone. When he rises up, the mighty are terrified; they retreat before his thrashing. The sword that reaches him has no effect, nor does the spear or the dart or the javelin. Iron he treats like straw and bronze like rotten wood. Arrows do not make him flee; sling stones are like chaff to him. A club seems to him but a piece of straw; he laughs at the rattling of the lance. His undersides are jagged potsherds, leaving a trail in the mud like a threshing sledge. He makes the depths churn like a boiling caldron and stirs up the sea like a pot of ointment. Behind him he leaves a glistening wake; one would think the deep had white hair. Nothing on earth is his equal— a creature without fear. He looks down on all that are haughty; he is king over all that are proud."

Creation as evidence of His majesty:

Psalm 104:24-30 O LORD, how manifold are your works! In wisdom you have made them all; the earth is full of your creatures. Yonder is the sea, great and wide, creeping things innumerable are there, living things both small and great. There go the ships, and Leviathan that you formed to sport in it. These all look to you to give them their food in due season; when you give to them, they gather it up; when you open your hand, they are filled with good things. When you hide your face, they are dismayed; when you take away their breath, they die and return to their dust. When you send forth your spirit, they are created; and you renew the face of the ground.

Isaiah 40:12 Who has measured the waters in the hollow of his hand and marked off the heavens with a span, enclosed the dust of the earth in a measure, and weighed the mountains in scales and the hills in a balance?

Creation revealing truths 3000 years before science does:

Isaiah 40:22 He sits enthroned above the circle of the earth, and its people are like grasshoppers. He stretches out the heavens like a canopy, and spreads them out like a tent to live in. (spherical earth)

Job 26:7-14 He spreads out the northern skies over empty space; he suspends the earth over nothing. (Note: see satellite pictures for confirmation). He wraps up the waters in his clouds, yet the clouds do not burst under their weight. (Note: barometric pressure). He covers the face of the full moon, spreading his clouds over it. He marks out the horizon on the face of the waters for a boundary between light and darkness. The pillars of the heavens quake, aghast at his rebuke. By his power he churned up the sea; by his wisdom he cut Rahab to pieces. By his breath the skies became fair; his hand pierced the gliding serpent. And these are but the outer fringe of his works; how faint the whisper we hear of him! Who then can understand the thunder of his power?

Creation as evidence of individual life giving:

Isaiah 42:5 Thus says God, the LORD, who created the heavens and stretched them out, who spread out the earth and what comes from it, who gives breath to the people upon it and spirit to those who walk in it:

Jesus’ continuing power over Creation evidence of His Deity:

Mark 4:37-41 A great windstorm arose, and the waves beat into the boat, so that the boat was already being swamped. But Jesus was in the stern, asleep on the cushion; and they woke him up and said to him, "Teacher, do you not care that we are perishing?" He woke up and rebuked the wind, and said to the sea, "Peace! Be still!" Then the wind ceased, and there was a dead calm. He said to them, "Why are you afraid? Have you still no faith?" And they were filled with great awe and said to one another, "Who then is this, that even the wind and the sea obey him?"

Creation and Jesus were in the beginning:

John 1:1-5 In the beginning was the Word, and the Word was with God, and the Word was God. He was in the beginning with God. All things came into being through him, and without him not one thing came into being. What has come into being in him was life, and the life was the light of all people. The light shines in the darkness, and the darkness did not overcome it.

Creation of first Adam tied to coming of Christ:

Romans 5: 12-14 Therefore, just as through one man sin entered into the world, and death through sin, and so death spread to all men, because all sinned— for until the Law sin was in the world, but sin is not imputed when there is no law. Nevertheless death reigned from Adam until Moses, even over those who had not sinned in the likeness of the offense of Adam, who is a type of Him who was to come.

Creation’s birth pains call for His second coming:

Romans 8:22-23 We know that the whole creation has been groaning in labor pains until now; and not only the creation, but we ourselves, who have the first fruits of the Spirit, groan inwardly while we wait for adoption, the redemption of our bodies.

Creation all belongs to Jesus, the Creator, and is for Him and His:

Ephesians 1:8-10 With all wisdom and insight he has made known to us the mystery of his will, according to his good pleasure that he set forth in Christ, as a plan for the fullness of time, to gather up all things in him, things in heaven and things on earth.

Colossians 1:15-16 Jesus is the image of the invisible God, the firstborn of all creation; for in him all things in heaven and on earth were created, things visible and invisible, whether thrones or dominions or rulers or powers-- all things have been created through him and for him.

1 Corinthians 8:6 yet for us there is one God, the Father, from whom are all things and for whom we exist, and one Lord, Jesus Christ, through whom are all things and through whom we exist.

Revelation 4:11 "You are worthy, our Lord and God, to receive glory and honor and power, for you created all things, and by your will they existed and were created."

Creation shows He will be a Creator yet again, and His Second Coming:

Isaiah 65:17-19 For I am about to create new heavens and a new earth; the former things shall not be remembered or come to mind. But be glad and rejoice forever in what I am creating; for I am about to create Jerusalem as a joy, and its people as a delight. I will rejoice in Jerusalem, and delight in my people; no more shall the sound of weeping be heard in it, or the cry of distress

Isaiah 65:21-25 They shall build houses and inhabit them; they shall plant vineyards and eat their fruit. They shall not build and another inhabit; they shall not plant and another eat; for like the days of a tree shall the days of my people be, and my chosen shall long enjoy the work of their hands. The wolf and the lamb shall feed together, the lion shall eat straw like the ox; but the serpent-- its food shall be dust! They shall not hurt or destroy on all my holy mountain, says the LORD.

Revelation 21:1-5 Then I saw a new heaven and a new earth; for the first heaven and the first earth had passed away, and the sea was no more. And I saw the holy city, the new Jerusalem, coming down out of heaven from God, prepared as a bride adorned for her husband. And I heard a loud voice from the throne saying, "See, the home of God is among mortals. He will dwell with them; they will be his peoples, and God himself will be with them; he will wipe every tear from their eyes. Death will be no more; mourning and crying and pain will be no more, for the first things have passed away." and the one who was seated on the throne said, "See, I am making all things new." Also he said, "Write this, for these words are trustworthy and true."

I believe all of the Bible to be “trustworthy and true.” This includes the many non –Genesis verses about Creation and the Creator, Jesus Christ. Do you? If not, are you truly comfortable substituting man’s ever-evolving opinions in place of His Divine revealed and unchanging Word?

All prior articles in this series can be found by searching my blog at insurance-coveragelaw.Blogspot.com.

The Duty to Defend

Cadillac Fairview Corp v. Olympia Sanitation Products Inc., [2010] O.J. No. 3306 (S.C.J.)

In the context of slip and fall actions, there is often both an owner/occupier of a property as well as a company hired to maintain the premises. Frequently there is a dispute over whether the contract between the two entities requires the contractor to assume the defence of its principal.

In this decision, the main action arose out of an alleged slip and fall occurring at the Promenade Mall. Cadillac Fairview hired Olympia as part of a cleaning contract in which Olympia agreed to insure and indemnify Cadillac Fairview for any losses arising out of Olympia’s contractual responsibilities. The incident report completed after the fall described that the plaintiff had fallen over something and described the cause of the injury as a “trip and fall” as opposed to a “slip and fall”. Some of the allegations in the Statement of Claim involved allegations of improper design and disrepair of the accident location.

Justice DiTomaso held that Olympia was not required to assume the defence and indemnity of Cadillac Fairview. The Riocan case was distinguished in the circumstances as there were independent allegations of negligence beyond the scope of Olympia’s cleaning contract. In Riocan, the Court held that the true nature of the plaintiff’s allegations fell within the scope of the hold harmless clause, so the contractor was obliged to defend. Justice DiTomaso in this case was unable to determine one particular claim that fell within coverage captured the true essence of the action, and further, it was possible that the plaintiff was injured in a way that was totally unconnected to Olympia’s responsibilities.

This case shows the complicated nature of the duty to defend and indemnify. Cases are determined on the specific facts and allegations made in the Statement of Claim in addition to the contract between the parties. Generally, where there is some allegation of independent negligence plead by the plaintiff, the independent contractor will not be required to assume the defence and indemnify its principal.

Home Safety

Home Can Be A Dangerous Place

Every week, I see homeowners insurance claims that could have been prevented. Here are some risks to consider, along with some steps to take, to reduce your risk.

1. Watch that tub.

Falling is the leading cause of home injury deaths. Surprisingly, nearly 6,000 lives per year are lost in simple falls. The bathtub is the leading culprit. Some install grab bars on the walls, or grip strips in their tub to reduce risk. Given the hard surfaces hit when one falls in the tub, any steps to make it safer are welcome.

2. Check the medicine cabinet.

The second-leading cause of accidental home injury deaths is accidental poisoning. Almost 5,000 lives are lost each year. One might expect this to be mostly children drinking a poison from under the sink, which certainly happens. However, it is often a mixing of alcohol and prescription drugs. Sometimes it is as simple as a husband sleepily taking his wife pills rather than his own in the middle of the night. Steps can be taken to make these medicines very different from one another in packaging.

3. Watch that stove.

Home fires and burn injuries kill over 3,000 people annually, and thus are the third-leading cause of accidental home injury deaths. Do your smoke alarms work? Change batteries when you change daylight saving times. Train your children in actual fire drills how to get out and to never reenter during a fire. Some families hold actual fire drills twice a year. Never put water on a grease fire, and make sure everyone knows that. In a new home, check the price of having fire sprinklers installed. (Unlike television and the movies, only the sprinkler that is getting hot actually sprays water). Finally, watch those bonfires and lighters. Kids love to spray lighter fluid like Dad does.

4. Choking hazards like your blinds.

Choking, suffocation and strangulation, claims about 1,000 lives a year. It is the fourth-leading cause of accidental home injury deaths. Younger children are most at risk. You might see choking hazard warnings on toys these days as recognition of this serious threat. Empty out the crib when you put a baby down, and cut the cords to your blinds. Smaller toys, Legos, coins, marbles and candy can choke any child. If choking, they cannot scream to tell you.

5. 5. Watch that water:

Over 800 people die each year in drowning accidents. The depth of the water is less important than supervision. Kids drown every year in bathtubs, let alone pools and ponds. Local codes require a fence at least 4 feet high with a self-closing and self-latching gate around their pool. Teach children to swim early on. If you wish, get your family trained in CPR to help with emergencies.

6. Beware of dogs.

Almost 800,000 bites per year -- one out of every 6 -- are serious enough to require medical attention. Dog bites send nearly 368,000 victims to hospital emergency departments per year (1,008 per day). Every year 2,851 letter carriers are bitten. Getting bitten by a dog is the fifth most frequent cause of visits to emergency rooms caused by activities common among children.

Homeowners claims and, more importantly, injuries and deaths, can be reduced with these simple steps.

Watch Out!

Motorcycle Safety

“Only a biker knows why a dog sticks his head out of a car window.”

~Author Unknown

Whether you ride or not, we all need to be more aware of motorcycle safety. Harleys and other brands have seen a resurgence in popularity in recent years. Higher gas prices also encourage cycling. Many more bikes are on the road. This interaction can be deadly for our friends on bikes.

Clearly, some bike accidents are the fault of daredevils kicking up wheelies on the interstate. These folks will probably kill themselves before a car ever gets involved. About 25% of the crashes in one study involved a single motorcycle that either struck a fixed object and/or ran-off the road. This behavior is especially troubling in Arkansas where no helmet is required. They would do well to recall this famous quote:

“What do you call a cyclist who doesn't wear a helmet?”

“Organ donor. “ ~David Perry

However, it has been my experience in a decade and half of handling injury and death cases that cars (we non-riders) are actually the culprit in most crashes! This might surprise you. Nearly 75% of the crashes in that same study were motorcycles involved in a collision with another vehicle, which was mostly a passenger car.

We see it so often in my injury law practice that we call them a “standard motorcycle wreck.” Here is what it looks like:

The most frequent impact configuration is the motorcycle proceeding straight ahead and the car making a left turn in front of the oncoming motorcycle at an intersection. Usually, the driver of the other vehicle violated the motorcycle’s right of way and caused the crash. The failure of motorists to detect and recognize motorcycles in traffic was the predominating cause of motorcycle-car accidents. The driver of the other vehicle did not see the cycle before the collision, or did not see the motorcycle until too late to avoid the collision.

“I just didn’t see him!”

~Most at fault drivers

Not noticing the motorcycle is a critical factor in multiple vehicle accidents. Thus, motorcycle headlamps (on even in daylight) and the wearing of high visibility yellow, orange or bright red jackets reduces accident involvement.

One study concluded that the typical motorcycle accident allows the motorcyclist just less than 2 seconds to complete all collision avoidance action. Motorcycle riders in these accidents showed significant collision avoidance problems. Most riders would over brake and skid the rear wheel, and under brake the front when greatly reducing collision avoidance deceleration. The ability to counter steer and swerve was essentially absent.

The likelihood of injury is extremely high is these motorcycle accidents-98% of the multiple vehicle collisions and 96% of the single vehicle accidents resulted in some kind of injury to the motorcycle rider; 45% resulted in more than a minor injury.

“Everyone crashes. Some get back on. Some don't. Some can't.”

~Author Unknown

Bottom line, watch your left turns more carefully. Some folks actually plan their route to avoid them where possible. Let’s all be more careful, because your riding neighbor’s very life may depend on your glance.

controversial mosque

Mosque at Ground Zero?

Does it really surprise anyone that putting a mosque at Ground Zero is going to be controversial? Really?

While we all believe in free expression of religion, it is simply unsettling that this mosque would be considered at this location. Recall that on 9/11/01, nineteen radical Muslims turned loaded passenger planes into missiles, crashing them all and killing thousands of innocents in the World Trade Centers alone.

For eight long years, the Greek Orthodox Christian church that stood in the shadow of the Towers has still not yet been approved to be rebuilt. However, this temple of Islam seems to be on the fast track, as of this writing.

To put this in context, it might be helpful to create some other inappropriate examples:

What if the Japanese wished to put a Japanese War Memorial honoring Admiral Yamamoto in the shadow of Pearl Harbor?

What if the United States wanted to place U.S. Atomic Bomb Memorials in Hiroshima and Nagasaki?

What if a white supremacist group wanted to place their meeting house next door to Abe Lincoln’s homestead?

No, these are not exactly the same. Most Muslims are clearly fine people. Many opposed the acts of these Muslim extremists. However, the association in the American psyche between Islam and 9/11 is just too strong to ignore.

While we may have the freedom to do something, it is not always prudent, helpful or proper. The Bible says it this way: “All things are lawful unto me, but all things are not expedient…” (I Corinthians 6:12- KJV).

In short, while this movement may indeed be legal, it is not helpful or expedient toward any worthwhile goal.

It does serve to make it clear that some Muslims will not act with any class, and some politicians like Speaker Nancy Pelosi and President Barrack Hussein Obama, are completely out of touch with “we the people.”

What do you think?

Just for fun, mostly

This comes via Linda Weaver's Armadillo Club newsletter. She attributes it to Mike Halverson of Halverson Consulting in Maryland. As Linda wrote, "since there aren't many coverage jokes floating around . . . "

Two coverage attorneys are hanging out in a bar. One gets a call from his wife and starts talking to her, but his phone goes dead. The other says, "Hey, I learned a trick for this. The wire that connects the battery to the circuitry gets corroded, see? But you rub a little salt where the wire is, and it neutralizes the corrosion and the phone starts working again. Seriously, try it." So he opens up the compartment, grabs the salt shaker off the table and starts doing it. A bouncer sees this from across the room and runs over in a fury and says: "Get the h___ out of here! Now!" And the lawyer's like: "What for? What did I do?" And the bouncer says: "Bar rules. We got a salt-in-battery exclusion!"

If you're a coverage attorney and you don't know about the Armadillo Club, I recommend that you check it out here. Based in Chicago, it has a growing membership nationally. One of the requirements for membership is that "you have to be fun, not worry about things that don't matter and not take yourself too seriously (or at least be working toward those goals)."

I belong to a lot of liability insurance groups through LinkedIn, but unless I'm having a really slow work day I generally delete all the emails without looking at them. I always open my Armadillo Club emails, though. In addition to being fun, they have good job leads and genuinely useful information.

Dog Bite Claims Top $400M in 2009; Rise 30% in Last 6 Years

Dog bite claims cost the insurance industry $412 million in 2009, an increase of 6.4 percent from 2008.



Dog bites account for more than one-third of all homeowners insurance liability claims paid out in 2009, says the Insurance Information Institute (I.I.I.).



An analysis of homeowners insurance data by the I.I.I. found that the average cost of dog bite claims was $24,840 in 2009, up slightly from $24,461 in 2008.



Full Article Here From Insurance Journal

Superior Court holds that Massachusetts has personal jurisdiction over New York insurer

James Nolan brought a tort action against Rochester. When Rochester's insurer, Dryden, refused to defend or indemnify it Rochester brought a coverage action against Dryden. Dryden moved to dismiss on the grounds that Massachusetts courts may not exercise personal jurisdiction over it. In Nolan v. Barr & Barr, Inc., 2010 WL 2762682, Superior Court judge Kenton-Walker disagreed.

Dryden has a principal place of business in New York and is licensed to issue insurance policies in New York. P & J is a carpet-installation business located in New York. Dryden issued a general liability policy to P & J. The policy did not limit coverage to New York.

P & J teamed with Rochester, another New York carpet-installation company, to install carpeting at the Williams College Theater in Massachusetts. P & J added Rochester to the Dryden policy as an additional insured.

Judge Kenton-Walker held that Massachusetts courts may exercise personal jurisdiction over Dryden. Although on its insurance application P & J had represented that none of its business took place outside of New York, the policy did not exclude coverage for claims outside of New York. Judge Kenton-Walker held that it was reasonably foreseeable that the insureds would be sued in Massachusetts, and Dryden should have known that it would be required to defend them in Massachusetts.

Scott's Rules of Insurance - Rule 4 - Insurance Is A Process, Not An Event

Rule 4 -  Insurance is a process, not an event.



Managing your insurance is not just about your policy renewals.  As your business changes, your insurance must change.



Your insurance is determined by your exposures.



Certainly the renewal process is important.  However, there needs to be a regular chance to review and update coverage during the policy year.



You buy insurance as a part of a plan to manage risks - insurance does not create risk - insurance is a tool to mitigate the impact of risk.  For example, you have the exposure of employees causing an accident while driving their personal car on company business.  You transfer that risk to your insurer when you buy non-owned auto insurance.



As your exposures evolve, your insurance should evolve.



Open claims should be reviewed at least quarterly.  Halfway through your workers' comp year, you need to push adjusters to reduce open claim reserves.  



Monthly walk-throughs help to identify hazards that have developed.  



If nothing else, talk with your insurance advisor a few times a year to update him on changes you have made to your operation.  You'll also hear of emerging insurance issues - if your advisor is any good.  You can get help with budgeting for the future.

Posting a comment on this blog

Readers, please feel free to post comments on this blog. To do so, click on the title of the blog post. At the bottom of the post click on Post a Comment. Type your comment and fill out the rest of the information requested.

Your comment will not appear immediately. Because this blog was getting so many spam comments I have to moderate posts. I will post any comment, positive, negative, agreeing or disagreeing with what I have written, as long as I am sure it is not spam.

Scott's Rules of Insurance - Rule 3 - Preventing A Loss Is Better Than Being Insured

Rule 3 - Preventing a loss is better than being insured. Limiting a loss is the next best thing to preventing it.



I consider any loss as a failure in some system. Build operations and procedures to prevent and limit loss. Place backups. Create stop-gaps and fail-safes.



Inspect your electrical systems annually. Install water-usage alarms to notify you of a burst pipe. Test your evacuation plan. Install a security system. Build a video surveillance system. Perform regular inspections of your facilities. Look for unsafe conditions, hazards, maintenance issues.



In a heavy rain, inspect for water flow around your property. Where is water collecting? What could prevent water from draining away from your buildings?



Consider "what if" scenarios. What if our computer crashed? What if our main supplier shut down? What if we lost power for 5 days? What if our best customer cancelled?



Redundancy is an often overlooked tool. I have a home phone, cell phone, and Skype subscription so I am sure to be able to get and make calls. I backup my computers on-line to a server in the mid-west. I also backup my computers on a separate harddrive. I have a generator at my office in case the power goes out. Much of my work is online so I can work from almost anywhere.



Build a communications plan. Have an accessible, updated list of customers, employees, suppliers, and service providers.



Any disruption is expensive. Plan to prevent disruptions and to limit them.

Superior Court describes formula to apportion insufficient insurance limit among multiple claimants

I frequently write about the importance of having adequate insurance coverage, to protect the personal assets of the insured and to protect victims of mistakes -- or worse -- that the insured might make.

There are times, however, when even what seems to be adequate coverage is not enough to compensate injured people. The Superior Court described such a situation in Providence Mut. Fire Ins. Co. v. Morancy, 2010 WL 2763255.

Morancy involved a a teenager who got drunk at a party at Morancy's house and then crashed his car into a tree, injuring his four passengers. He had auto insurance with limits of $100,000 per person and $300,000 per accident. Those insurance funds were distributed among the passengers. The insurance did not come close to compensating the passengers for their injuries, one of whose medical bills alone exceeded $900,000.

The passengers then turned to Morancy's homeowner's insurance for additional compensation. The homeowner's policy had a limit of $500,000. That limit, in addition to the auto policy limit, was insufficient to fully compensate the passengers for their injuries. The insurer requested that the court allocate the limit among them.

There was little evidence presented to the court of the passengers' future medical cost or future lost earnings. The court chose to disregard pain and suffering damages. It used only the medical costs incurred by each passenger to determine the proper allocation.

The court subtracted from the medical costs the amount each claimant had received in settlement from the auto policy. It totalled those uncompensated damages and computed each passenger's percentage share in that total by dividing the individual uncompensated damages by the total uncompensated damages. It then distributed the $500,000 limit according to those percentages.

The public service portion of this post:

The passenger who was most severely injured was a tenth grade honor roll student. She worked part-time after school and was a cheerleader. Now she has serious mental impairments that affect her cognitive skills; she has lost vision in one eye; she cannot drive and has difficulty reading and using a computer; she is currently repeating twelfth grade in an attempt to pass the MCAS; it is unlikely that she will ever be able to work; and she cannot be left home alone.

The takeaway:

1. Don't drive drunk.
2. Don't get into a car with someone who is driving drunk.
3. Don't serve alcohol or let your kid serve alcohol to someone who will drive.
4. Tell your teenagers that if they can't get home safely you will come and get them, no questions asked.

Scott's Rules of Insurance - Rule 2 - Insurance Is For The Big Stuff

Rule 2 - Insurance is for the big stuff - you take care of small stuff.



Stuff happens. Life and commerce include ups and downs. Bumps in the road should be paid for out of your own pocket. Catastrophes is where insurance comes in.



Use deductibles to limit the involvement of the insurance company in minor losses.



Look to the other side of a loss - the total amount. Use deductibles to decrease premium and put that premium towards higher limits of coverage and broader perils. Consider adding coverage for events that are normally excluded, like flood and earthquake, that could be catastrophic.

A really bad week leads to decision on res judicata effect of arbitrator's award on related action

Anthony Liquori suffered personal injuries in an automobile accident with Zachary Wyman on September 24, 2004, and was injured again in an accident with Robert Pelley on September 27, 2004.

Liquori settled his claim against Wyman for Wyman's $20,000 policy limits. He then sought underinsured motorist coverage from his own insurer, Travelers. In an arbitration of the underinsured motorist claim he submitted medical bills totalling $10,716.10.

The arbitrator ruled that based on the materials submitted, it was impossible to determine which medical bills were solely attributable to the Wyman accident and not to the Pelley accident. She held that the Wyman accident was not responsible for more than one third of his nine percent impairment rating, and awarded $4,752.93.

Liquori's claim against Pelley continued. He submitted to the court the medical bills he had submitted in the Wyman arbitration, plus some addiditonal bills.

Pelley moved to exclude from evidence the medical records and bills that had been submitted to the Wyman arbitrator, on the ground that the arbitrator's award was res judicata as to Liquori's total damages.

In Liquori v. Pelley, 2010 WL 2010875 (Mass. App. Div.) the Massachusetts Appellate Division held that there was no issue preclusion, because there was no identity of issues between the Wyman arbitration and the Pelley trial. In the Pelley trial the issue was the amount of Liquori's damages for injuries caused by the Pelley accident. In the Wyman arbitration the issue was the amount of Liquori's damages caused by the Wyman accident. The Wyman arbitration did not determine Liquori's total damages from both accidents. Even if the arbitrator implicitly determined damages from the Pelley accident, such finding was not essential to the arbitrator's determination.

Scott's Rules of Insurance - Rule 1 - Insurance Is All Fine Print

Rule 1 - Insurance is all fine print - work to understand it.



Insurance policies are written by insurance companies to cover specific risks and exposures.  Every word is carefully placed to clarify, expand, and restrict coverage.  There are no hidden meanings.  There is no subterfuge.  Ambiguity in insurance contracts can be disastrous for the insurance company as courts always read confusing language in favor of the insured.



Courts, too, help define insurance contract language.  Precedent moves insurers to further clarify language.



A basic understanding of insurance is not a Herculean task.  For almost 5 years, I have made 480 posts trying to explain insurance concepts and issues to insurance buyers.  Your insurance agent is available to help too.  Heck, helping insurance buyers is why I'm in business.  All you have to do is call.

The Simmonds Business Insurance Index™ - August

The Simmonds Business Insurance Index™ August, 2010

Renewal Premiums -5% to Flat

Renewal Coverages Liberal Terms

Buyer's Outlook Long-Term: Prices Flat

Notes for August, 2010



The best way to describe the current insurance marketplace is confused.



Underwriters want more premium. However, competition is preventing them from inching premiums up. At the same time, uninformed buyers are in a mode where they almost expect premiums to go up based on the overall sour economy.



That attitude allows insurers to bump premiums by 5% with very little push-back. However, if there was pressure on the underwriter, the premium increase would go away.



Uninformed buyers are allowing their premiums to increase.



I continue my advice from prior months: If you have not bid your insurance in a few years, get out there. You will pay too much for your insurance this renewal without some competition - even if it is just rattling your agent's cage a bit.



Start the renewal process early - 120 days minimum. If you are not bidding, tell your agent that you expect your renewal rates to drop by 5% and that you want confirmation of this by 90 days before renewal. Without that assurance, go to bid.

Another plug for liability insurance

I participate in a large listserve for local parents. One of the recent threads concerned problems with cakes from a local bakery. There was a long discussion about whether it was okay to post the name of the bakery or if doing so would create the risk of a libel lawsuit. One of the posters responded that for an additional $8.00 a year she added a rider to her homeowner's policy providing coverage for slander and libel. (In insurance terms slander and libel generally come within what is called "personal injury" coverage, an entirely different coverage from "bodily injury" even though the two are synonymous in other contexts.)

Years ago I defended a couple who was sued when they publicly opposed a telephone sex company renting space in the mixed use commercial and residential condominium building where they lived. After several years of litigation they not only prevailed but were awarded their attorney's fees. Had they not had personal injury insurance, however, the process could easily have bankrupted them or forced them into an unfair settlement.

Liability insurance provides not only indemnity (payment of damages to the claimant after the insured loses at trial or settles the case) but also defense, which is sometimes called lawsuit insurance. Because there is always a risk of being sued even when you have done nothing wrong, having such insurance can save you from the tens of thousands of dollars it can cost simply to have a groundless lawsuit dismissed.

Definition of "Struck by" or "Hit by" in Auto Insurance

The Court of Appeal for Ontario has decided that coverage under one's own policy for being "struck by" or "hit by" an unidentified automobile includes walking into an unnoticed steel pole protruding from a parked truck. Lewis v. Economical Insurance Group, [2010] O.J. No. 3158 (C.A.).

The facts are described as follows: "On a spring day in 2003, Bonnie Lewis walked out of a variety store and struck her head on a steel pole protruding from a truck parked the wrong way on the street in front of the store. The pole was unmarked, grey and nearly invisible. Ms. Lewis did not see the pole until she hit it. The pole struck her above her right eye near her temple. She fell to the ground, unconscious. She suffered a serious head injury, which has left her cognitively impaired."

Since the truck could not be identified, Ms. Lewis sued her own insurance company for damages for personal injuries. Both her automobile policy and the OPCF Family Protection Endorsement, which was additional insurance she had purchased, provided coverage for personal injuries resulting from an accident involving an unidentified or uninsured automobile. As Ms. Lewis was not an occupant of an automobile when she was injured, she was entitled to coverage only if she was "struck by" or "hit by" an unidentified automobile.

A motions judge concluded that Ms. Lewis was not "struck" or "hit by" the truck, or the pole that protruded from it, because the truck was not moving at the time. Instead, it was Ms. Lewis who struck or hit the pole.

The Court of Appeal concluded otherwise and finds that she is entitled to coverage.

Laskin J.A. added that "my interpretation of these words [struck or hit by] would not open the floodgates to injury claims by persons who walk into unidentified parked cars. This is a case about coverage, not liability or negligence. If the owner or driver of a parked car was not negligent, the claimant would have no legal entitlement to damages."

Whether the plaintiff is now entitled to damages "depends on her being able to prove that the unidentified owner or driver of the truck was negligent."

It seems that the Court is saying that if the plaintiff is not entitled to damages then it should be determined on the issue of negligence and not coverage. Coverage should be interpreted broadly whereas negligence must be proven strictly.

A crisis that will affect insurers, insureds, and everyone else

The Massachusetts court system is facing a massive budget crisis, and it's going to impact all of us in all kinds of ways. Because this is a blog about insurance law I won't go into how it will affect accused criminals and victims of crime, people trying to get divorced or to buy or sell a house, businesses, customers, employees, and . . . well, everyone in every aspect of their life.

Getting a firm date for a civil trial in Massachusetts has always ranged from frustrating to really, really frustrating. But now it's worse than ever. The last trial I had in Superior Court received about eight continuances, all but the first one at the initiation of the court, and several of them because there was no judge assigned to the courtroom.

It used to be that when I decided what county to file a case in, I would think about which courthouses had the best rotation of judges for the particular issue. Now I think about which county my case is most likely to ever see the light of day in a courtroom.

And, folks, that was the condition before the most recent round of budget cuts. Massachusetts Lawyers Weekly reports that the current round of budget cuts will require that 250 to 300 court jobs be eliminated and that 14 courthouses be closed.

How will these cuts affect insurance? Here's a minor example: Last week the Supreme Judicial Court, in Papadopoulos v. Target Corp., 457 Mass. 368 (2010), overturned well over a century of established law about when a landowner can be liable for someone slipping and falling on ice or snow.

The SJC replaced a fairly cut and dry standard -- natural versus unnatural accumulation -- with the standard of reasonableness. That means that there is whole new body of law that needs to be developed before plaintiffs can determine whether they have a viable claim and before general liability and homeowners insurers can know whether they should settle a case or defend it.

And that body of law can't be developed without judges with the resources to hear cases. Almost all the slip and fall on snow and ice cases that ten years ago would have gone before a judge, either on summary judgment or at trial, will now go to mediation or arbitration. That means no body of law will develop, and that means everybody--claimants, insureds, insurers, and the general public, will be acting on guesswork. One of the most important bases of our legal system --stare decisis--the system under which judges are bound by precedent, cannot occur without that precedent being made by the courts. If you walk outside in the wintertime; or if you are an insurance adjuster trying to determine the settlement value of a claim, a landowner or a businessowner or a homeowner trying to decide whether you need to put salt or sand on your sidewalk if there is a dusting of snow; of you are a plaintiff's attorney or a defense attorney trying to do the best job you can for your clients, you are the loser here.

For information about help court officials are requesting, click click here. You can check for periodic updates from the courts here.