Tuesday, March 1, 2016 Houston, TX. 3:30 5:00 p.m. SIGNIFICANT INSURANCE LAW DECISIONS AND THEIR IMPACT ON A CHANGING RISK LANDSCAPE

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1 Tuesday, March 1, 2016 Houston, TX 3:30 5:00 p.m. SIGNIFICANT INSURANCE LAW DECISIONS AND THEIR IMPACT ON A CHANGING RISK LANDSCAPE Presented by William Helander John D. Shugrue Executive Vice President JLT Specialty Insurance Services Inc. Partner Reed Smith LLP This session will evaluate the impacts of legal decisions arising from recent events from both a retrospective and prospective viewpoint. The panel will discuss significant legal decisions and their impact on the risk management landscape, examining how insurance policies and coverages have evolved in response. Attendees will learn how judicial decisions have interpreted the coverage available for major pollution incidents, how insurers have reacted to Deepwater Horizon by amending policy terms and conditions, and important areas of focus for risk management/insurance professionals as they structure their insurance programs and place coverage in light of these developments. Copyright 2016 International Risk Management Institute, Inc. 1

2 Notes This file is set up for duplexed printing. Therefore, there are pages that are intentionally left blank. If you print this file, we suggest that you set your printer to duplex. 2

3 William Helander Executive Vice President JLT Specialty Insurance Services Inc. Mr. Helander is executive vice president of JLT Specialty Insurance Services Inc. Mr. Helander earned a B.S.C. degree in Business and Spanish from Washington and Lee University. He commenced his career with Catlin Syndicate at Lloyd s of London in 2002, underwriting professional liability and excess casual liability. He was a founding member of Catlin s Bermuda offices in 2004, where he underwrote casualty treaty business until going on secondment to Singapore to author a white paper on the Southeast Asian and Australian professional liability marketplaces. After underwriting facultative business for Catlin s Houston office, Mr. Helander joined Lockton Houston in He joined Aon in 2008 and served as the private equity practice leader for the Southwest Region. He joined JLT Houston in November John D. Shugrue Partner Reed Smith LLP Mr. Shugrue is a partner in the Insurance Recovery Group and affiliate member of the Energy and Natural Resources Group in Reed Smith s Chicago office. His practice focuses on representing policyholders in complex litigation and insurance coverage matters involving general and excess liability, directors and officers, errors and omissions, cyber liability, OEE/energy package, product recall, first party property/business interruption, and pollution liability coverage. In addition to wide experience with all major US insurers, he is experienced in litigation, mediation, and arbitration with Lloyd s and other London and Bermuda market insurers. After receiving his B.A. with honors from the University of Denver followed by his J.D. with honors from the University of North Carolina School of Law in 1987, Mr. Shugrue began his legal career at Jenner & Block in Chicago, focusing on insurance coverage matters for policyholders. He was one of the principal attorneys involved in developing Jenner & Block s insurance recovery practice on behalf of policyholders and became a partner at Jenner & Block in In 2000, he joined Zevnik Horton, a national policyholder firm, as a partner in its Chicago office and chair of its insurance recovery practice. In 2003 when Zevnik merged with Morgan, Lewis & Bockius, he opened Morgan s Chicago office and became the managing partner there. In 2007, he was made cochair of Morgan s Insurance Recovery Group. Mr. Shugrue is recognized as one of the top policyholder insurance practitioners in the country by Chambers USA, The Best Lawyers in America, The Legal 500, and Who s Who Legal. He writes and lectures often on insurance coverage topics, including business interruption claims, cyber liability and data breach insurance, D&O liability insurance issues, environmental insurance coverage, coverage for onshore and offshore oil and gas E&P activities, and special issues relating to Lloyd s and the London insurance market. He coauthored the treatise Insurance Coverage Disputes, published by Law Journal Press. 3

4 Notes This file is set up for duplexed printing. Therefore, there are pages that are intentionally left blank. If you print this file, we suggest that you set your printer to duplex. 4

5 Significant Insurance Law Decisions and Their Impact on a Changing Risk Landscape Presented by: William Helander, JLT Specialty Insurance Services Inc. #IRMI2016 John D. Shugrue, Reed Smith LLP Overview: Significant Insurance Law Decisions and Their Impact On A Changing Risk Landscape Important Developments In Additional Insured Coverage Professional Services Exclusions Corporate Succession and Rights to Coverage Policy Construction and Interpretation Rules Privilege Considerations involving Policyholders, Insurers, and Brokers Consent to Settlement #IRMI

6 Important Developments in Additional Insured Coverage - In Re Deepwater Horizon, 470 S.W. 3d 452 (Tex. 2015) - Ironshore Specialty Insurance Co. v. Aspen Underwriting, Limited, 788 F.3d 456 (5 th Cir. 2015) #IRMI Important Developments in Additional Insured Coverage - Drafting considerations for insurance requirements in contracts - Drafting/negotiation considerations for policy language - Certificates of Insurance - Informational only not binding! #IRMI

7 Professional Services Exclusions Nicklos v. ACE Insurance Co., No.. V Memorandum and Order (S.D. Tex. 2015) Hartford Cas. Ins. v. DP Engineering, LLC, 2015 WL (N.D. Tex. 2015) - Broadly applied professional services exclusion Drafting/negotiation considerations for professional services exclusions #IRMI Corporate Succession and Rights to Coverage Fluor Corp. v. Superior Ct., 61 Cal. 4 th 1175 (2015) Anti-assignment clause in liability policy does not bar coverage for post-loss assignment of insurance claim Implications for disposition of insurance in corporate transactions #IRMI

8 Policy construction and interpretation rules The sophisticated insured fallacy - Texas Supreme Court Deepwater decision avoiding the question (despite insurers urging otherwise) - Texas Supreme Court s RSUI decision applying accepted rule of construing ambiguities against insurers RSUI Indemnity Co. v. The Lynd Co., 466 S.W.3d 113 (Tex. 2015) Choice of Law and Alternative Dispute Resolution clauses in policies consider the impact on policy interpretation - London market move towards NY law - Bermuda market standard : NY law, UK arbitration #IRMI Privilege Considerations between Policyholders, Insurers, and Brokers Texas Supreme Court decision In Re XL Specialty, 373 S.W. 3d 46 (Tex. 2011) New York Appellate Court decision Nat l. Union Fire Ins. Co. v. TransCanada Energy USA, Inc., 119 A.D. 3d 492 (N.Y. App. Div. 2014) When are policyholder/broker communications privileged? How to avoid waiver of privilege #IRMI

9 Consent to Settlement Consent to Settlement - Babcock & Wilcox Co. v. Am. Nuclear Insurers, 2015 WL , A. 3d (Pa. 2015) - When insurer is defending under ROR, insured may enter into reasonable settlement over insurers objection without forfeiting coverage - Practical implications for insured-insurer cooperation/coordination on settlements in ROR context #IRMI QUESTIONS & ANSWERS #IRMI

10 Contact: William Helander John D. Shugrue JLT Specialty Insurance Services Inc. Reed Smith LLP 5847 San Felipe Road 10 South Wacker Drive Suite th Floor Houston, TX Chicago, IL #IRMI

11 To enter the drawing for a cash prize, affix your personal bar code label here or complete this evaluation online. T7. SIGNIFICANT INSURANCE LAW DECISIONS AND THEIR IMPACT ON A CHANGING RISK LANDSCAPE Rating scale for all questions: 4 = Excellent 3 = Very Good 2 = Average 1 = Somewhat Disappointing 0 = Very Disappointing Overall rating for this workshop? William Helander Preparation and quality of information Energy and enthusiasm of delivery Educational focus (not a sales pitch) John D. Shugrue Preparation and quality of information Energy and enthusiasm of delivery Educational focus (not a sales pitch) Comments: