Insurance Policy Interpretation and Coverage Determination

We advise claims professionals on the scope of coverage based on an objective assessment of applicable law and relevant facts. Because the LGWM coverage team renders coverage advice and services for carriers on claims across the United States, we strive to maintain current knowledge of all coverage-related developments in the law. Our coverage experience and knowledge of coverage law is multi-jurisdictional, as must be the case when rendering coverage advice, based on the ever present choice of law issues that accompany coverage disputes.

Our attorneys also are asked to review current wordings for modification. We have contributed to the drafting of coverage forms and endorsements, working with our clients to develop language addressing emerging liabilities.

The Insurance Coverage Practice Group at LGWM frequently is retained by carriers to review claim files, interpret policy forms, and render coverage analyses. Typically those assignments include requests to draft coverage letters to insureds, reservation of rights letters, and coverage declinations as the case may require. Our coverage attorneys are experienced and well-versed in interpreting a wide variety of coverage forms. That experience allows us to get right to the point as quickly and efficiently as possible. The ability to render coverage opinions and advice efficiently yet thoroughly is important to our clients. We understand the legal and contractual obligations imposed on carriers, and the consequences in many jurisdictions when claims decisions and coverage letters are not timely issued.

Cases of Note

• Represented excess insurer in response to the reporting of potential claims against an insured investment management firm arising out of the Madoff Ponzi scheme. Analyzed coverage for claims subsequently made against the insured for alleged wrongful acts in failing to notify investors of the risks of investing in Madoff and various feeder funds.
• Represented insurer in large scale coverage litigation and mediations involving coverage available to insured private equity firm for lawsuits filed after insured’s bankruptcy. The bankruptcy, and subsequent lawsuits and insurance claim, arose out of the collapse of the market for investments in residential mortgage-backed securities in heavily leveraged transactions financed by repurchase loan agreements. Representation of insurer included analysis of manuscript professional services exclusion, the filing of a successful motion to dismiss based on same, and the defense of insurer’s position on appeal.
• Advised insurer on coverage available for DOJ investigation of insured contractor for violation of the Fair Housing Act and Americans with Disabilities Act at multiple properties in the southeast U.S. over the course of 25 years. Analyzed multiple coverage issues including claim reporting and notice obligations, application of retroactive dates, insured status issues, and the impact of defense and settlement without insurer consent.
• Represented commercial general liability insurer in connection with a multimillion dollar construction defect claim asserted against insured product manufacturer, additional insured distributor and installer, and multiple other non-insured parties. Representation included analysis of trigger issues under Alabama, North Carolina, and Missouri law, evaluation of batch endorsements and resulting impact on self-insured retention obligations, and analysis of complex additional insured issues. Negotiated on behalf of client with insured and other carriers to ensure proper allocation of any defense or indemnity contribution ultimately made to resolve the claim.
• Advised insurer on coverage for insurance claims reported by insured international manufacturing company in response to SEC investigation of financial reporting practices and subsequent class actions filed against the insured in the U.S. and Canada. Representation involved analysis of the U.S. Securities Exchange Act and its Canadian counterpart, the Ontario Securities Act.
• Represented D&O insurer in arbitration with insured who was arrested and indicted on ten counts of securities fraud under the Alabama Code. Insured sought coverage for multi-million settlement reached in the underlying action. After identifying numerous coverage defenses, the coverage case was resolved for a fraction of the insurer’s policy limit at mediation.
• Advised insurer on coverage implications for lawsuit against insured investment fund based on insured’s alleged involvement in a Ponzi scheme, which defrauded $50 million in real estate assets from a single client. Negotiated favorable resolution of claim for insurer with insured contributing 30% of settlement payment to client from its own funds.
• Represented insurer in dispute involving an insured temporary employment agency and client-employer after injury to worker on client’s job site. Representation required analysis of limitations on scope of additional insured coverage available to client-employers with whom temp employees are placed, analysis of the client-employer’s own insurance policy, and negotiation with client-employer’s carrier for contribution to resolve claim.
• Represented insurer in connection with an underlying lawsuit involving acquisition of a West Virginia coal mining operation. The insured was sued for various securities violations. Our coverage investigation revealed misrepresentations by the insured to the insurer, ultimately resulting in a successful disclaimer of coverage.
• Represented excess insurer in connection with $193 million tower limits demand made against insured executive under professional indemnity insurance policy regarding alleged fraud to conceal trading losses. Case was successfully resolved through mediation.
• Represented D&O insurer in connection with claims resulting from the collapse of a failed casino project. Provided coverage advice to insurer under directors and officers liability and run off insurance policies following insured’s bankruptcy. Successfully negotiated a global settlement with the bankruptcy trustee. Advised insurer on complex insurance claim by insured financial services company after multiple claims were asserted against the insured by national banking institutions following the U.S. mortgage crisis. Identified and analyzed significant coverage issues including late reporting, trigger of prior policy years, interrelation, misrepresentation on insurance applications, and prior knowledge defenses. Represented insurer in subsequent coverage litigation and assisted insurer in negotiating favorable settlement.
• Counseled various insurers on commercial property coverage issues associated with hurricanes in the Gulf of Mexico.