What Every Business Tort Lawyer Needs To Know

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Insurance coverage issues for business litigators.

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  • 1. What Every Business Tort Lawyer Needs to Know about Insurance CoverageVERONICA BATESMICHAEL HUDDLESTONHEATHER KUBIAK ERNEST MARTIN AMY ELIZABETH STEWART, MODERATOR TEXAS BAR CLE3RD ANNUAL BUSINESS TORTS INSTITUTE OCTOBER 14, 2011

2. Types of Policies Commercial General Liability Directors and Officers Liability Fiduciary Liability Errors & Omissions Liability Employment Practices Liability Intellectual Property Liability Cyber Liability 3. Whats Covered? Commercial General Examples Liability Bodily Injury Business disparagement Property Damage Defamation Malicious prosecution Advertising Injury Copyright infringement Personal Injury Misappropriation of style ofdoing business Invasion of privacy Misappropriation ofadvertising ideas Wrongful eviction False arrest/imprisonment 4. Whats Covered? Errors & OmissionsExamples Wrongful Acts (in Any professional connection the negligence claim insureds profession) Bankers Accountants Real estate agents Lawyers Architects Engineers Definition ofprofessional services 5. Whats Covered? Directors & OfficersLiability Examples Wrongful Actsacts, Breach of duty errors or omissions Misleading statements Errors & omissions Mismanagement 6. Whats Covered? Fiduciary Liability Examples Wrongful Acts Breach of fiduciary duty under ERISA Other breaches of fiduciary duty [Sometimes] negligence in administration of benefit plan 7. Which Policy Applies Policy Period Claims-made v. Occurrence Primary v. Excess Named Insured v. Additional Insured 8. Claims-Made Policies Prior acts and retro dates o Policy may require wrongful act within specific time Definition of claim o Claim requires demand for money o Must be in policy period 9. Claims-Made Policies Incident notice o Can invoke coverage before claim is made o Can freeze coverage in a policy period different from actual claim No coverage for previously reportedincidents o Form of known or loss in progress provision Was tail coverage purchased? Claims made and reported? 10. Notice to the Insurer Notify all potential insurers Check policy for when and where As soon as practicable or promptly During policy period or within X days Prejudice Cooperation 11. Practical Considerations As plaintiff, seek a copy of any reservation ofrights letters Take inventory Get parent, subsidiary and associated primary andexcess polices Make sure you have complete policies Use certificates to run down the actual policies Read the policies carefully Involve the broker 12. Practical Considerations Pay attention: different forms andendorsements can change the coverage o Get coverage from the inception with current carrier o Renewal additions can be eliminated o Check form approval with the TDI Err on the side of giving notice Never assume someone is or will providenotice and do it correctly for you 13. Insurers Response Unqualified defense Reservation of rights Denial Untimely or lack of response 14. Duty to Defend Triggered by allegations Allegations taken as true Extrinsic evidence not considered? Doubts resolved in favor of insured Broader than duty to indemnify 15. Independent CounselUnder certain circumstances, an insurermay not insist on its right to control thedefensewhat are those circumstances?What is a reasonable rate andwho decides? 16. Declaratory Judgment Actions Jurisdiction/Venue Parties Prohibitions 17. Trends in Texas Stowers o Duty not to settle. Pride Transp. v. Continental Cas. Co., 2011 WL 1197306 (N.D.Tex., Mar 31, 2011) Settlement o Gandy/Atofina Entity ChangesConversions andMergers and Acquisitions o VRV o Ford Bacon o Keller Foundations o Nautilus 18. Trends in Texas Gilbert and blended tort/contract claimsversus Lamar Homes Nokia oUsing the legal obligation to pay as damages to expandcoverage oPotentially coveredpartial or incomplete pleadings D&Oo Stanford fallouto Disgorgement/ill-gotten gains 19. Practical Advice How to deal with a difficult insurer Resolution strategies Ideas for maximizing coverage 20. Questions? 21. THANKS!