RESOLVING INSURANCE COVERAGE AND CLAIMS DISPUTES

Workshop T1 Tuesday, November 11 10:20 a.m. 12:10 p.m. and 2:40 4:30 p.m. RESOLVING INSURANCE COVERAGE AND CLAIMS DISPUTES Presented by Workshop T1 Bill Wilson Assoc. VP, Education & Research Independent Insurance Agents & Brokers of America Insurance practitioners in the real world quickly learn that often there are no clear-cut answers to coverage questions. Although most insurance claims are straightforward, from the standpoint of coverage, there are many claims where coverage exists (or does not exist) only as a matter of perspective or expectations. This workshop will present a structured approach to policy interpretation and claims negotiation from the insured's perspective. The program focuses on commercial lines policy provisions that are often in dispute or litigated and illustrates how seemingly esoteric legal principles can be practically applied to resolve real-world coverage disputes. To print on both sides of the page, set your printer for duplex printing. Copyright 2014 International Risk Management Institute, Inc. 1 www.irmi.com

OUR STARS ARE NEVER OUT OF REACH. Our network of offices and dedicated insurance professionals are always in reach and ready to provide you with the best in class underwriting, risk control, and claims services. We are local. We are national. We are ORCPG. Pasadena New York Chicago Dallas Atlanta Kansas City (626) 683-5200 www.orcpg.com Old Republic Construction Insurance Agency, Inc. CLS#0799319 Old Republic Construction Insurance Agency of New York, Inc., LS#668042

Bill Wilson Assoc. VP, Education & Research Independent Insurance Agents & Brokers of America Mr. Wilson is the associate vice president of education and research and founder and director of the Virtual University of the Independent Insurance Agents & Brokers of America (IIABA), the country s largest trade association of independent insurance agents. He is the former director of education and technical affairs for the Insurers of Tennessee and, prior to that time, he was employed by Insurance Services Office, Inc. (ISO). Mr. Wilson is a graduate of the Illinois Institute of Technology with a B.S. degree in fire protection and safety engineering. Mr. Wilson has conducted hundreds of technical seminars, workshops, and convention presentations in 46 states. He has been the top-rated presenter at several CPCU national conventions, and his programs are always highly rated by attendees. He has presented to groups as large as 5,000 attendees. Mr. Wilson has researched, developed, written, and published dozens of technical articles, manuals, and CDs/audiotapes, and has authored articles in business and industry trade periodicals, as well as mainstream publications such as Readers Digest, Kiplinger s, Money, and the Wall Street Journal, and he has been cited as an expert resource/interviewee for local television and radio media. He has also served as an expert witness in litigation. Workshop T1 3

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When Words Collide Resolving Insurance Coverage and Claims Disputes Presented by: Bill Wilson, CPCU, ARM Assoc. VP, Education & Research Workshop T1 Independent Insurance Agents & Brokers of America When Words Collide Resolving Insurance Coverage and Claim Disputes Presented by Bill Wilson, CPCU, ARM Assoc. VP, Education & Research Independent Insurance Agents & Brokers of America This appeal draws us deep into the catacombs of insurance policy English, a dimly lit underworld where many have lost their way. Insurance Co. of N. Am. v. Home & Auto Ins. Co. 2 5

Disclaimer & Copyright Notice I am not an attorney. I did not sleep in a Holiday Inn Express last night. I am not offering legal advice. If you try to sue me, I ll hide where you ll never find me (I m from Tennessee it ll be easy). Really, don t sue me. See, I m so concerned about being sued, I made sure to use the symbol above so Holiday Inn won t sue me. Copyright 1996-2014 by the Independent Insurance Agents & Brokers of America, Insurors of Tennesse, and Professional Insurance Education, Inc. All rights reserved. 3 When Words Collide Resolving Insurance Coverage and Claim Disputes In the beginning 6

When Words Collide Resolving Insurance Coverage and Claim Disputes Dedication To the agent/broker To the adjuster To the insured To the legal system Workshop T1 Why are Claims Denied? They re not covered There s a legitimate difference of opinion Lack of training or qualifications One of the parties is committing fraud Cranitis rectal inversio 6 7

Scales of Justice A preponderance of the evidence 7 Policy Interpretation I ve always heard that What is the rule of thumb for? They said it doesn t cover Does a CGL policy cover A guy in a bar told me 8 8

Legal Principles Ambiguities Contextual ambiguities Syntactical ambiguities Ejusdem generis Noscitur a sociis Duty to read the policy Unconscionable Advantage Reasonable Expectations Detrimental Reliance More 9 Workshop T1 Legal Principles (cont d) Waiver & Estoppel Nonwaivers and reservation of rights letters Declaratory judgments Reformation & Rescission Breach of Contract Entirety of Contract and Subsequent Actions Duty of Utmost Good Faith Substantial Performance Statutory Supersession Agency Accommodation 10 9

Policy Interpretation Insuring Agreement Insureds Coverage Duty to Defend 11 Definitions For example Insured Occurrence Employee Loading and Unloading Your work Pollutant Circular Definitions 12 10

Undefined Terms Auto (in a personal auto policy) Care, Custody or Control Equipment Favorable and Likely Infestation Ownership and insurable interest Permanent Improvements and betterments Racing Vacant 13 Workshop T1 Invisible Words For example Age Licensed Products and Completed Operations Professional Liability 14 11

Exclusions Ambiguous Unconscionable Illegal Intentional Unintended Manual, Endorsed, and Invisible Exceptions to exclusions Examples Jumper cables Roofing contractors Tree service companies GEICO Sanitation workers and bars Legionnaire s Disease Spray painting and V&MM Flat roof exclusion Satellite dishes and golf clubs More 15 Other Considerations Conditions Coinsurance Insurable interest Other Insurance Subrogation Suit against insurer Endorsements Policy Edition Dates Eligibility 16 12

Never Assume! 17 Workshop T1 4 Steps to Resolution Step 1: Read the Policy Step 2: Interpret the Policy Step 3: Research the Interpretation Step 4: Plead Your Case 18 13

4 Steps to Resolution Step 1: Read the Policy Does the insuring agreement apply? Is the person an insured? Do any exclusionary provisions apply? 19 4 Steps to Resolution Step 2: Interpret the Policy Does the policy provision seem ambiguous? What is the apparent intent of the language? What is the insured s reasonable expectation of coverage? 20 14

4 Steps to Resolution Step 3: Research the Interpretation Is there an authoritative support for your interpretation? Are there any precedent-setting court cases that may govern? Are there any superseding statutes? 21 Workshop T1 4 Steps to Resolution Step 4: Plead Your Case Appeal to the insurer Appeal to your agents association Appeal to your regulators Last resorts. 22 15

Interpersonal Effectiveness 23 Resources IRMI, FC&S, PF&M, PLRB, CPCU, etc. ISO, AAIS, NCCI, ACORD, etc. Court cases attorney newsletters, Google scholar, www.findlaw.com, www.versuslaw.com Black s Law Dictionary Underwriting and claims departments How to Draft and Interpret Insurance Policies Master the Meaning and Legal Consequences of any Provision by Ken Wollner, Rich Scislowski, and Jeff Woodward (IRMI) 24 16

Thanks! Big I Virtual University www.bigivu.com Bill Wilson bill.wilson@iiaba.net If you actually attend this session at the IRMI conference, I will explain how to get a detailed 34-page manual of the content of this program. 25 Workshop T1 17

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