Bond…Terminated Bond.

A New York court recently held that the termination condition in a fidelity bond applied to terminate coverage in respect of losses allegedly caused to an insured insurance company by the insured’s managing general agent. The Court found that termination was appropriate because the insured knew of the managing agent’s dishonest acts prior to applying for the bond.

In Starr Insurance Holdings, Inc. v. United States Specialty Insurance Company, Index No. 652164/2016 (N.Y. Supr. Ct. 2019), Plaintiff started insuring Warranty contract. Starr utilized Global …

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The Benefits of Early Notice of a Claim

According to our friends at CPA Gold, LINK, from a purely risk management perspective, bringing your insurer into the claims process is extremely prudent and can save you a lot of money. Here are the reasons you should contact your insurer or agent sooner, rather than later: involvement of counsel, denial of coverage, deductible concerns and risk management. Each of these factors, and others, were addressed by CPA Gold and are absolutely worth considering.

Reporting a potential claim enables your malpractice insurer to work …

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Can a Single Lawsuit = Multiple Claims?

Professional liability insurance is necessary to any responsibly-run professional practice. The limits of coverage available under an E&O policy help to protect professionals against financial loss.  However, the limits of coverage between different policies do not necessarily offer the same protection, even if the face value would appear to be same. For instance, a policy may specify that costs of defense are included in the limits of coverage, a/k/a “burning limits,” which reduces the amount available to satisfy a judgment or pay a settlement as …

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Insurance Applications + Lies = Coverage Denied

Insurers are entitled to make decisions as to the professionals they will insure and the terms of the relationship. To that end, insurers expend considerable energy evaluating risks and assessing the likelihood of a potential claim. The scope of underwriting and the key metrics may vary from carrier to carrier but without exception each insurer relies upon some form of insurance application. Insurers are entitled to rely upon the representations of their applicants and, when faced with a misrepresentation in an insurance application, have the …

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The DOJ on D&O: What You Need to Know

In September the Department of Justice released its new directive on individual accountability for corporate wrongdoing in a revived effort to fight corporate fraud.  The “Yates Memo” by Deputy U.S. Attorney General Sally Quillian Yates, outlines the DOJ’s policy on targeting and pursuing corporate executives in cases of corporate wrongdoing.  With the DOJ’s new guidelines companies should be taking a fresh look at their D&O insurance.

The Memo identifies the following six key steps to strengthen the Department’s pursuit of corporate wrongdoing:

  • To
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Football Insurance? You Bet

Professional athletes are worth a lot of money. When they are on top of their game they are capable of raking in the dough for themselves and their organizations.  However, if they become injured or otherwise unable to perform a lot of money is at stake.  Therefore, it’s not unusual for athletes to obtain disability insurance policies, covering them in the event of a career ending injury.  In fact with respect to collegiate athletes, the NCAA even sponsors a disability insurance program, which provides protection …

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Malpractice: Failure to Report Client’s Claim

There is no upside to failing to report a claim. You’ve been warned of the consequences facing professionals who take a wait and see approach or apply self-help measures before reporting. In some cases the professional may consider the claim meritless and therefore think that it doesn’t give rise to a “reportable” event. Other professionals, usually attorneys, may attempt to handle the claim on their own before notifying the carrier. In these scenarios, the carrier may elect to deny coverage and the insured is left …

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Double Covered but Uninsured

Prudent professionals maintain different types of insurance to protect against various risks. Some typical policies for professionals may include D&O, cyber, and/or E&O policies. The foregoing policies and others may overlap, while others allow gaps for claims that would not be covered. It is incumbent upon each professional to purchase the perfect mix applicable to her practice; there is no one size fits all and more is not necessarily sufficient. Although multiple policies may fit together seamlessly to form a safety net, other policies allow …

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Application of the Innocent Insured Clause

Professional Liability Matters has repeatedly stressed the importance of accurate, timely and careful reporting of potential claims.  Whether it be during the application or renewal process or somewhere down the road, most insureds are contractually obligated to report threatened claims. This requires that the organization solicit responses from all professionals (which can be a logistics problem for larger organizations). Many firms submit a short questionnaire that must be answered by everyone.  But how is coverage implicated for the organization when one bad apple knowingly conceals …

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HOA Lessons from Sanford, Florida

Since Trayvon Martin’s February 2012 death, HOA liability and neighborhood watch groups have become a bit of a hot button topic. Following Martin’s altercation with George Zimmerman in the Florida housing complex known as The Retreat, Martin’s parents initiated a wrongful death suit against the HOA.  Reportedly, that lawsuit recently settled for approximately $1 million. Now, some HOA’s are rethinking risk management strategy and have taken a closer look at neighborhood watch groups in particular.

At its most basic level, an HOA is often …

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