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Yearly Archives: 2017

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Unraveling the Gordian Knot

Tue May 2nd, 2017 on     Articles,    

THE INSURANCE COMPANY’S OPTIONS WHEN SETTLING AFTER RESERVING ITS RIGHTS Assuming coverage, or at least its ostensible existence, insurance companies are supposed to settle third-party claims against their insureds lest the anodyne of bad faith liability be unleashed. Insurance companies often do not agree wholeheartedly with the policyholder that coverage exists. A potent weapon in the arsenal of rights preserved to insurance companies by their insurance policies and statutory and common law is the reservation of rights letter, in which it offers to defend the insured while preserving its right to ultimately deny coverage. However, where the underlying case is capable of being settled within the policy limits, a reservation of rights letter creates difficult choices for both the insurance company and the policyholder. Succinctly, this election by the insurance company can result in far darker concerns than either coverage or policy limits: Bad faith. Under Florida Law, an insurer which fails to act in good faith may be severely punished. This article will briefly plumb the options available to the insurance company, thereby serving simultaneously to educate insurance company and policyholder alike concerning the consequences of the failure to make the right decision. Florida law generally recognizes that where an insurance company takes control of a policyholder’s defense, the insurance company has an obligation to exercise ordinary care and prudence in the defense of its insured, which “amounts to a fiduciary duty requiring the exercise of good faith.” Doe f/b/o Doe v. Allstate Ins. Co., 653 So. 2d 371, […]

AVOIDING THE BYTE OF THE MILLENIUM BUG: INSURANCE COVERAGE FOR Y2K

Mon May 1st, 2017 on     Uncategorized,     Brenton N. Ver Ploeg

“Nobody expects the insurance industry’s response to claims of coverage for a problem of the magnitude of Year 2000 liability to be open arms.” Europe in the year 999 approached the millennium’s end in barely concealed panic. Many of the nobility, in furtherance of the widespread religious belief that the world would come to a close along with the first millennium, deeded their entire lands and material goods to the church with the expectation of a greater reward to come. Jan. 1, 1000, dawned as before, however, and not much changed on history’s timetable except that the church had a very good year financially. This time we might not be so lucky. With the close of the second millennium only a bit more than an orbit away, present-day prophets of doom anticipate not planetary death but global paralysis because early programmers, in an effort to save precious space, decided to represent years with two digits instead of four. As the international computer network confronts the year 2000 flaw, also known as the millennium bug, data will become unreliable and systems will shut down. The problems may last well into the next decade, impeding or halting the communications, travel and electrical power even of those who wouldn’t recognize a computer should it byte them on the leg. The ensuing commercial chaos is sometimes projected to include the collapse of many companies and perhaps whole industries and economies dependent upon the global network. This article is not about the technical problems. It […]

Florida-based insurance class action lawsuit settles for $39M

Mon May 1st, 2017 on     Insurance Claims,    

Anyone who has ever been involved in what proves to be a relatively minor car accident knows that one of the biggest headaches from the entire ordeal comes from the damage to their vehicle.

Indeed, the headache rapidly reaches migraine proportions if their vehicle, which was otherwise in good working order, was totaled, such that they’re left looking for a new means of suitable transportation.

Why more South Florida property owners may be going with Citizens

Mon Apr 24th, 2017 on     Homeowners Insurance,    

Just five years ago, Citizens Property Insurance Corporation, the state-run insurer of “last resort” for those Florida property owners unable to secure coverage on the private market, saw the ranks of policyholders mushroom to 1.5 million.

However, thanks to everything from the ten-year absence of hurricanes to the state’s “depopulation” program that created incentives for private insurers to start taking on more Citizen’s policyholders, this number has since fallen to 450,000.

Understanding the protection provided by D&O insurance – II

Mon Apr 17th, 2017 on     Bad Faith Insurance,    

Last time, our blog began discussing how many businesses make the strategic decision to purchase directors and officers liability insurance, otherwise known as D&O insurance, to insulate their corporate leaders from liability for claims made against them while serving in this official capacity.

Specifically, we examined how the D&O insurance purchased by everyone from privately held firms and for-profit businesses to non-profit organizations and educational institutions is comprised of elements known as “Sides.” We’ll continue our examination of this topic in today’s post.

Understanding the protection provided by D&O insurance

Mon Apr 10th, 2017 on     Bad Faith Insurance,    

It goes without saying that for any business, the primary objective is always improving the bottom line, meaning its net earnings. While this, of course, can be accomplished by simultaneously growing revenue and cutting costs, it can also be realized to a certain extent through defensive measures like securing the necessary business insurance policies.

While these business insurance policies safeguard the enterprise itself, it’s important to understand that this coverage does not extend to individual company officers, meaning they may be left personally exposed to financial losses stemming from a lawsuit.

Florida’s PIP requirement under attack in Tallahassee

Mon Apr 3rd, 2017 on     Insurance Law,    

As we’ve documented on this blog, the state’s infamous personal injury protection or no-fault requirement, which mandates that all Florida drivers must carry a minimum of $10,000 worth of medical coverage to cover injuries regardless of liability, has long been the subject of scorn, with detractors calling it an unnecessary system that facilitates fraud and results in higher auto insurance premiums.

As we’ve also discussed on our blog, the PIP requirement has nevertheless managed to hold on for nearly 40 years now despite a cavalcade of bills being introduced over the years calling for its elimination. Recent reports suggest, however, that the end of PIP is perhaps now closer to becoming a reality than ever before.

Are animal sanctuaries required to carry liability insurance?

Mon Mar 27th, 2017 on     Insurance Law,    

There are certain attractions here in Florida that hold universal appeal, meaning chances are good that you’ll go out of the way to pay them a visit regardless of whether you’re a resident, a tourist or even a snowbird. While this, of course, includes the major theme parks, spring training complexes and miles of sandy beaches, it also means historic sites, nature preserves and even animal sanctuaries.

Indeed, our state’s perpetually sunny skies and temperate conditions make it a prime location for animal sanctuaries hosting all manner of mammals, reptiles, fish, insects and birds.

Financial analysis firm declines to lower ratings of Florida property insurers

Mon Mar 20th, 2017 on     Homeowners Insurance,    

An alarm bell was sounded in the insurance sector last month when Demotech, the Ohio-based independent financial analysis firm, indicated that it was strongly considering lowering the financial strength ratings of six to eight Florida homeowners insurance carriers to below an A.

Why this might not seem like too much of a concern to the average person, it was actually rather distressing news to the 250,000 customers of these insurance carriers, as most mortgage lenders — including federal lending agencies Freddie Mac and Fannie Mae — require borrowers to secure homeowners’ insurance from an A-rated insurer as a condition of financing.

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