A Policyholder's Primer on Commercial Insurance in the United States
Attorneys from Blank Rome’s Insurance Recovery group authored an update to A Policyholder’s Primer on Commercial Insurance in the Unites States, an InfoPAK published by the Association of Corporate Counsel ("ACC"). This in-depth practical guide is a continuation of our Firm's longstanding partnership with the ACC to provide valuable resources to its members. The guide is intended to give in-house counsel background to assist them in identifying insurance issues that may arise, participate in substantive insurance discussions relating to those issues, and assist risk managers in maximizing the protection afforded by insurance.
Introduction:
Insurance is a valuable corporate asset that can protect companies from man-made crises and natural disasters, but it is an asset that often is underused. The continuing development of mass tort and product liability litigation, the persistent threat of class action and derivative claims, and the property damage and business interruption (“BI”) losses caused by natural disasters are all examples of circumstances that highlight the importance of developing and maximizing the value of insurance assets. Accordingly, every in-house lawyer should have an understanding of, or at least be able to identify, basic insurance issues so that she can assist the company’s risk manager/risk management department in making sure that (1) insurance purchased by the corporation is drafted in a way to maximize coverage, (2) insurance is pursued for potentially covered claims, and (3) claims are submitted to insurers in a way that will maximize recovery. This is more crucial now than ever, as insurance companies appear increasingly determined to contest even plainly covered claims.
Risk managers tend to focus heavily on two financial aspects of insurance: the premiums charged and the limits provided. In-house counsel can provide benefits with respect to other aspects of the insurance transaction that can have a significant impact on the asset’s value, such as the legal implications of the language contained in various policy terms and whether the policyholder should accept certain provisions (e.g., arbitration and choice of law). Counsel also can assist in the submission of claims, including ensuring adherence to the notice and cooperation provisions in the policy. Counsel’s understanding of the potential underlying liability or loss that the company could suffer can also be used to maximize coverage.
This InfoPAK does not address every issue that may arise in an insurance coverage dispute. Rather, it introduces basic insurance concepts so that in-house counsel can identify those issues and assist risk managers, as well as identify those circumstances in which outside insurance coverage counsel may be helpful or necessary.
Section II is a practical guide for in-house counsel that introduces the basic structure of an insurance program, what to do when a claim comes in, and practical considerations for corporate counsel. Section III provides a discussion of the key documents that form an insurance agreement and the principal sections of an insurance policy.1 Sections IV – VI provide a more detailed treatment of different types of third-party insurance. Section VII provides a similar discussion of first-party insurance. Sections VIII – X discuss bad faith, broker liability, and insurance and transactions. Sections XI – XIV provide a bibliography of useful insurance resources, and provide information on the authors and Blank Rome’s Insurance Recovery Practice.
To view the InfoPAK on the ACC's website, please click here.
“A Policyholder’s Primer on Commercial Insurance in the Unites States,” by John A. Gibbons, Omid Safa, Justin F. Lavella, James S. Carter, Kyle P. Brinkman, and Dominique A. Meyer was published by the Association of Corporate Counsel on July 12, 2019.