– April 28, 2011
Let’s face it, there are no easy answers to that basic question every claims handler needs to ask: Is it covered? Nonetheless, it is a basic question that is sometimes fraught with trepidation. As you all know, there is no one source of coverage law interpreting your standard CGL form. 50 states means 50 different view points.
How is one supposed to cope?
While hiring counsel may be the quick and dirty answer, it’s not always the best solution. Regardless, as the well informed claims professional you are (as all of our readers are), you need to have a good understanding to know what the best solution is to address the problem. Not addressing a coverage issue can result in paying for claims that are not covered. Addressing a coverage issue improperly could result in a bad faith action and damage to your company’s reputation. Either way – knowledge is king.
So How Does One Keep Up?
Grab a copy of General Liability Insurance Coverage by Randy Maniloff and Jeffrey Stempel. This is truly a book that should be at every claim handler’s side. Unlike other treatises on insurance coverage, this is a relatively manageable paper back in under 500 pages. There is no attempt to get at every issue in the ever changing world of coverage. As the authors state in the preface that “despite the relative uniformity of policies, states can differ widely in their interpretation and application of insurance policies.” Nonetheless, the authors provide a great overview needed to understand the issue at hand so one can make a decision to pursue a matter further.
Each chapter begins with an overviews of the subject followed by a state by state survey. Even the physical book design is pleasing with flaps built into the cover and end page to use as a bookmark. Covering the key elements and issues in a CGL policy, the book is broken into the following 21 chapters:
- Commercial General Liability Insurance – an Overview
- Choice of Law for Coverage Disputes
- Late Notice Defense Under “Occurrence” Policies: Is Prejudice to the Insurer Required?
- Duty to Defend Standard: “Four Corners” or Extrinsic Evidence
- Insured’s Right to Independent Counsel
- Insurer’s Right to Reimbursement of Defense Costs
- Prevailing Insured’s Right to Recover Attorney’s Fees in Coverage Litigation
- Number of Occurrences
- Coverage for Innocent Co-Insured: “Any” Insured vs. “The” Insured and the Severability of Interests Clause
- Is Emotional Injury “Bodily Injury”
- Is Faulty Workmanship an “Occurrence”
- Permissible Scope of Indemnification in Construction Contracts
- Qualified Pollution Exclusion
- “Absolute” Pollution Exclusion
- Trigger of Coverage for Latent Injury and Damage Claims
- Trigger of Coverage for Construction Defects and Non-Latent Injury and Damage Claims
- Allocation of Latent Injury Damage Claims
- Invasion of Privacy: Guidance from “Junk Fax” Claims
- Insurability of Punitive Damages
- First- and Third- Party Bad Faith Standards
- The “Reasonable Expectations” Approach to Insurance Policy Interpretation
The book is organized well, making it easy to find answers to issues in the state you are concerned about. Want to know how to address the absolute pollution exclusion in Alabama? Go to page 29 where you will learn that the Supreme Court of Alabama did not preclude coverage because a “reasonably prudent insured might have concluded in 1991 that the presences of lead paint flakes…would not qualify as a discharge, dispersal, release or escape of a pollutant.”
Very simply laid out, and written with a claims person in mind, the book explains complex coverage issues plainly. For example, they begin Chapter 4 on the Duty to Defend Standard by saying “If coverage issues were stocks, the duty to defend would be Blue Chip. Just as investors purchase such stocks in hopes of steady and consistent returns, the rules concerning an insurer’s duty to defend have long been unwavering.” Really a great way to advise of the foundational importance of this issue.