There is a difference between an insurance policy and an insurance coverage. A policy is a group of documents forming the contract of insurance. Within any policy, there may be numerous different kinds of coverages. In this series, we discuss some of the most common types of policies, and the different coverages each policy typically provides. Part 1 addressed property coverages. This second installment discusses different kinds of liability coverages.Read More »
There is a difference between an insurance policy and an insurance coverage. A policy is a group of documents forming the contract of insurance. Within any policy, there may be numerous different kinds of coverages. In this series, we discuss some of the most common types of policies, and the different coverages each policy typically provides. This first installment discusses different kinds of property coverages.Read More »
A typical insurance policy is not a single, cohesive document that can be read start to finish. Instead, it is a grouping of independent documents that all work together to define the insurer’s and the insured’s obligations under the insurance contract. Understanding an insurance policy requires an understanding of all the different pieces that make up the policy, and how those pieces relate.Read More »
Getting the most out of your insurance claim requires a clean and clear presentation of covered costs and expenses. Adjustors and even coverage lawyers have dozens of claims to sort through each day, and if the adjustor can’t understand each dollar claimed immediately, it’s much easier for the adjustor to deny that dollar rather than pay it. Correctly categorizing, itemizing, and backing up each dollar of an insurance claim is critical to a favorable adjustment or settlement of claims. Here’s how, in 3 simple steps.
1. Prepare A “Claim Summary” Cover Sheet. This is a one-page cover sheet, typically a spreadsheet, that sums up your claim with a total at the bottom. This isn’t where you itemize every invoice; instead, the Claim Summary gives the bigger picture, and shows only the total for each category of damages. Categories may include Repair Costs to Date, Estimated Costs to Complete Repair, Business Income Losses, Investigation and Design Costs, Attorney Fees and Costs, and Treble/IFCA/Punitive Damages. Unless your claim is a complicated amalgam of estimates, business losses, sunk costs, and more, the Claim Summary shouldn’t be more than a half page.
3. Include Organized Backup. Now that the claim is presented, it must be substantiated. To do this, attach backup documentation for each and every line item of damages prepared in no. 2 above, in the same order as the list prepared in the last step. Sometimes, where damages are estimated or not yet incurred, the backup will consist of written estimates or expert reports; regardless, it’s critical to have some sort of backup for each and every dollar claimed.
The Declarations of a standard CGL policy will generally list at least four different kinds of policy limits. The first is the General Aggregate Limit. This general aggregate limit is the most the insurance company will pay out for the policy period, regardless of how many different accidents or events are at issue (called an “occurrence” in insurance policy lingo) or individuals are involved. As an example, say that a business’s aggregate limit is $2 million, and the business experienced three different accidents in one policy period: (1) a customer slips and falls on business property, claiming $600,000 in damages; (2) a product sold or installed by the business causes a fire and damages a customer’s building, causing $1,100,000 in damages; and (3) an article on the business’s website and a series of commercials for the business are defamatory of a competitor’s business, and the competitor’s damages are $500,000. In this situation, assuming no exclusions or other limits apply, the aggregate limits would be enough to cover the first two accidents, which together total $1,700,000, since this is less than your $2 million aggregate limit. By the time the third accident occurs with a price tag of $500,000, however, there is only $300,000 left in the aggregate limit to cover additional claims. So, coverage for the third claim would be limited to $300,000, and there would be no coverage for subsequent claims. Graphically, the coverage is as follows:
New law in Oregon would void any provision in a construction contract that waives a party or an insurer’s right of subrogation. The prohibition only applies where subrogation is waived for death, bodily injury, or property damage, and it must be caused in whole, or in part, by the negligence of another person. Notably, public contracts and proceeds of property policies are excluded from this prohibition.
The waiver of subrogation can be a valuable tool for all parties involved in a construction contract, and it remains to be seen how this provision will affect those parties. Among other things, waivers of subrogation frequently help parties settle disputes by bringing finality to a settlement, ensuring that no third parties or their insurers will come back to seek further reimbursement for the same loss in the future. The waiver of subrogation occurs where parties to a contract waive claims against each other, but only to the extent those claims are covered by insurance. Frequently, a party to a construction contract will also waive claims against an architect, owner, or general contractor, even where those entities are not a party to the agreement.
The benefits of the law are not entirely clear. Although the bill was initially introduced in a dramatically different form and touted as an equalizer for subcontractors bargaining with powerful general contractors, the final bill underwent numerous revisions and appears to benefit insurance companies most of all.
(Wn. App. Div. 1)
Immunex and others were sued in several cases alleging that certain drug manufacturers artificially inflated their wholesale prices. Immunex notified its umbrella and excess insurer, National Surety, of related issues, but did not notify National of the lawsuits or provide copies of the complaints until approximately five years after the complaints were filed. National filed a declaratory judgment action, seeking a ruling to determine whether National had a duty to defend Immunex. The trial court (Judge Steven Gonzalez) held that National had a duty to defend until the trial court ruled that there was no coverage, unless National could prove that Immunex’s late notice of the lawsuits actually prejudiced National. Division 1, in an opinion authored by Judge Appelwick, affirmed. The ruling was based on the court’s reasoning that the duty to defend was broader than the duty to indemnify; therefore, where the allegations of the complaint triggered a duty to defend, that duty to defend remained in effect until the court issued its final declaration of no coverage.