Insurance & Reinsurance

Defense and enforcement of rights under liability insurance policies has been a key focus of Clark Hill’s practice since the firm was founded. Over the years and continuing to the present, we have successfully litigated precedent-setting cases concerning liability coverage. In doing so, we have played a leading role in shaping insurance law around the country. 

The firm has provided advice and representation for insurers in literally thousands of matters involving virtually every type of liability coverage. Our insurance group has litigated individual coverage cases involving billions of dollars in underlying claims. This includes, for example, liability coverage disputes involving asbestos and other toxic exposure claims, environmental damage, class action employment discrimination, intellectual property, construction defects, and professional liability exposures. The insurance group is composed of top-rated insurance coverage advisors and litigators. We represent numerous longstanding insurance industry clients.

National Scope

• We have litigated liability coverage issues in numerous federal and state courts throughout the United States. We have served as National Coordinating Counsel for a major insurer’s environmental liabilities, and the firm has served as Claims Counsel and Administrator in processing, evaluating and monitoring thousands of underlying claims against particular insureds. 

Environmental and Mass Tort Liabilities

• The firm has played an active role in litigating coverage issues arising from toxic tort and environmental liabilities, as well as large loss liability claims of all types. We have been in the forefront of a number of major insurance coverage trials, and we have served as appellate counsel in arguing cutting edge issues as “trigger of coverage”, “known loss”, “as damages”, and interpretation of pollution exclusions.
• We also serve as insurance coverage counsel for underlying mass tort and catastrophic losses, including toxic tort and environmental contamination exposures. We provide coverage evaluation and recommendations involving liability claims spanning multiple sites and locations throughout the country. For example, we have advised insurers concerning claims arising from asbestos exposure injuries, medical device defects, manufacture of defective construction materials, and environmental contamination at thousands of major oil company locations.  

Construction Losses and Construction Defect Litigation

• Our insurance group has particular knowledge and extensive experience in addressing literally hundreds of coverage issues arising from construction project losses and construction defect litigation under liability policies issued to owners, developers, general contractors, professionals and subcontractors. This includes numerous aspects of insuring clauses, many standard and manuscript exclusions, self-insured retentions, cooperation clauses and other policy conditions, aggregate limits issues, contribution and allocations among insurers, and many others. 
• We regularly represent insurers in state and federal court coverage actions, and are frequently on the front lines in the litigation of coverage issues arising from construction claims. We have successfully obtained court rulings on state-of-the-law coverage aspects of construction defect litigation such as the meaning of “property damage” and “occurrence,” numerous policy exclusions, time on risk allocations and additional insured endorsements.  

Breadth of Knowledge

We regularly advise insurers concerning rights and obligations with respect to claims arising under a broad spectrum of liability coverages, including:

• Commercial General Liability
  • Large losses such as construction accidents and construction defect claims, contaminated food and chemical exposure claims.
• Professional liability
  • Policies issued to architectural and engineering firms, law firms, environmental consultants, and other professions.
• Employment practices liability
  • Wrongful termination and employment discrimination claims
• Specialty insurance products, including forms of:
  • Pollution liability issued, for example, to premises owners, contractors, professionals, and public entities
  • Transportation liability such as trucking companies and other carriers
  • Cyber liability
• Directors and officers liability and management liability coverages
• Excess and umbrella liability coverages
• Personal lines liability coverages
• We provide carefully analyzed coverage opinions and practical advice and recommendations. This includes capabilities in new and recurring liability insurance issues, such as the scope of coverage, duty to defend, application of policy limits and self-insured retentions, application and enforcement of policy exclusions, and claims made coverage conditions.  
• We regularly advise insurers concerning procedures and strategies to avoid payment of meritless claims and exposure to extracontractual liability.
• Our insurance group also provides clients with timely updates on developments in insurance coverage law and e-mail alerts concerning court decisions of particular importance and potential impact. In addition, we regularly provide seminar presentations focusing on liability claim handling issues and procedures.

Claims between Insurers

• We regularly handle and, if necessary, litigate claims between insurers for contribution or indemnity. Our experience extends to complex issues concerning loss allocation involving different layers of coverage and/or multiple policy periods.

Attorney Fee Review and Arbitration

• The firm has been retained to review and evaluate attorneys’ fee submissions by insured-retained defense counsel. We advise insurers concerning rights and obligations under statutes dealing with selection of defense counsel, and we represent insurers in arbitration of attorney fee disputes.

Bad Faith litigation has been a core component of Clark Hill’s practice since the firm was founded. We have played a leading role in shaping insurance law by successfully litigating some of the most complex and significant insurance cases in both the trial and appellate courts. For instance, we have successfully argued precedent-setting cases establishing the rights of excess insurers (Signal Ins. Co. v. Harbor Ins. Co.), defeating insurance coverage for punitive damages (Ford v. Home Ins. Co.), enforcing pollution exclusions (Hydro Systems v. Continental Ins. Co.) and defining the timing of an “occurrence” (Hallmark Ins. Co. v. Superior Court) among several prominent examples.

The firm’s Bad Faith Litigation team is composed of top-rated insurance litigators with literally decades of trial experience. We are proud that our team includes members of the prestigious American Board of Trial Advocates (ABOTA), peer-nominated Super Lawyers, and Martindale-Hubbell AV-Preeminent rated trial lawyers. The group’s attorneys have a proud tradition of successfully representing and defending numerous prominent and longstanding insurance industry clients.

As important as our trial experience is, however, we are equally committed to work closely with our clients at the inception of a case, before costs have mounted and the parties have become entrenched in their positions, in order to thoroughly assess the case’s strengths and weaknesses and to develop a comprehensive and cost-effective case strategy appropriate to the client’s goals. Common agreed strategies include, for example: (1) to settle the case early on, (2) to resolve the case quickly with a dispositive motion (such as a Motion for Summary Judgment), or (3) to try the case to jury verdict (and, if necessary, defend those verdicts in the courts of appeal).

Once the strategic vision has been developed and agreed upon, the next step is to work with our client to design a tactical litigation plan specifically tailored to accomplish that strategic goal, so that our agreed litigation efforts and costs are well-focused and purposeful, rather than reactionary.

Because litigation is a dynamic and ever-changing environment, we also work hard to keep our clients closely informed as their case develops, and to partner with them as we frequently update the agreed strategic and tactical plans as needed. That way, surprises are avoided, and costs and risks are affirmatively managed.

Representative Matters

As a result of our attorneys’ dedication to our clients, attention to detail, and commitment to professional success, they have amassed an impressive and winning track record of litigating and trying coverage and bad faith cases. Over the decades, we have litigated and tried cases involving claims arising from:

• Commercial and business interruption losses
• Fire, smoke and soot arson
• Fraud
• Theft
• Vandalism
• Earth movement and earthquakes
• Various types of water and / or flood losses
• Wind damage
• Collapse
• Construction defects
• Environmental damage
• Drug and chemical exposures
• Employment-related torts
• Intellectual property infringement
• Medical device malfunction
• Tenement house conditions
• Entertainment industry losses (including feature film production losses)

Industry Involvement

Our attorneys’ deep knowledge of the insurance industry allows us to understand the needs of, and challenges faced by, our clients. Our knowledge of the insurance industry and litigation impacting the industry is enhanced by our active service in the following organizations, boards, and committees:

• American Board of Trial Advocates (ABOTA) Trial Attorneys of America
• Defense Research Institute (including service on the Insurance and Construction Committees, and as frequent Presenters at DRI Educational Conferences)
• Property Loss Research Bureau (including service on the National Conference Planning Committee, and as frequent Presenters at PLRB’s National and Regional Educational Conferences)
• Loss Executives Association (Member)
• Claims and Litigation Management Alliance
• International Association of Special Investigation Units
• National Fire Protection Association
• International Association of Arson Investigators (including service on the Expert Witness Class program re-write Committee, on the Attorney Advisory Committee, and as Subject Matter Experts on various modules of the CFITrainer.net educational program)
• California Conference of Arson Investigators (including long term service as Legal Advisors, Board Members, Seminar Instructors, and Expert Witness Class and Courtroom Instructors)
• Professional Liability Underwriting Society (including service on the Western Chapter Steering Committee)
• American Bar Association (including Co-Executive Editor, Tort Trial & Insurance Practice Section Law Journal, active participation in the Trial Practice, Litigation, Tort & Insurance Practice Sections, and the ABA / TIPS Property Insurance Law Committee, and Chair-Elect of the ABA / TIPS Admiralty and Maritime Law Committee)
• Maritime Law Association (including service on the Marine Insurance Committee and Continuing Legal Education Committee)
• American Bar Foundation (Fellow)

Industry/Professional Honors and Awards

• Additionally, our attorneys have received numerous professional and industry distinctions, honors, and awards including:
• Super Lawyers” (several of our attorneys have been designated as “Super Lawyers”, a distinction bestowed by peers and Judges honoring the top 5% of lawyers in the region)
• “AV-Preeminent” trial lawyers (several of our attorneys have received this highest rating bestowed by the prestigious Martindale-Hubbell professional peer review rating service)
• Top Rated Lawyers in Insurance Law (Martindale-Hubbell, American Lawyer Magazine, and the National Law Journal)
• Bay Area's Best Insurance Lawyers
• "Distinguished Service – CCAI Outgoing Board Member" Award
• PLRB Outstanding Presentations Award (for over a decade of extraordinary presentations at PLRB National Claims Conferences)
• Wiley W. Manuel Pro Bono Award
• America's Most Honored Professionals, Top 5%, The American Registry

Industry-Related Publications

• California Property Insurance: Law and Litigation Treatise (California Continuing Education of the Bar – multiple Chapters, including: Chapter 3 "Insurable Interest," Chapter 4 "Insuring Secured Lenders and Lienholders," Chapter 6 "Special Risk Property Insurance," Chapter 7 "Business Interruption and Other Business Coverages," Chapter 8 "Causation and Common Exclusions," Chapter 11 "The Appraisal Process," and Chapter 12 "Calculating Liability: Measure of Indemnity")
• Scientific Evidence and Expert Testimony (California Continuing Education of the Bar)
• Kirk's Fire Investigation, by Dr. John DeHaan (5th, 6th and 7th Editions)
• Excess and Umbrella Compendium, Defense Research Institute (Regional Editor)
• Insurance Bad Faith: A Compendium of State Law, Defense Research Institute (California, Washington, and Montana Chapters)
• The Reference Handbook on the Comprehensive General Liability Policy (ABA Publishing, Assistant Editor)
• Our attorneys contribute numerous published articles in a variety of professional and industry publications

Insurance coverage litigation has been a core component of Clark Hill’s practice since the firm was founded. We have played a leading role in shaping California insurance law by successfully litigating some of the state’s most significant insurance cases in both the trial and appellate courts.

Our coverage litigation practice extends nationwide and our practice includes coverage cases involving billions of dollars in underlying claims. The firm’s insurance group is composed of top-rated insurance coverage litigators. We represent numerous longstanding insurance industry clients.

National Scope

We have litigated coverage issues in numerous federal and state courts throughout the U.S and have served as National Coordinating Counsel for a major insurer’s environmental liabilities.

Extra Contractual Claims

• The firm has defended a multitude of cases alleging liability against insurers beyond policy limitations.
• We have litigated insurance/bad faith claims arising from: construction defects, environmental damage, drug and chemical exposures, arson, fraud, employment-related torts, intellectual property infringement, medical device malfunction, tenement house conditions, business interruption losses, and entertainment industry losses.

Breadth of Knowledge

• We regularly represent insurers concerning claims arising under a broad spectrum of coverages, including:
  • General liability 
  • Professional liability  
  • Employment practices liability
  • Directors and officers liability 
  • Property insurance 
  • Specialty insurance products, including various forms of pollution coverage 
  • Personal lines coverages 

Environmental Coverage

• The firm has played an active role in litigating coverage issues arising from toxic tort and environmental liabilities on a nationwide basis.
• We have been in the forefront of a number of large insurance coverage trials in this area, and we have served as appellate counsel in arguing cutting edge issues such as "trigger of coverage," "known loss," "as damages," and interpretation of pollution exclusions.

Claims between Insurers

• We regularly handle and, if necessary, litigate claims between insurers for contribution or indemnity.
• Our capabilities extend to complex issues of loss allocation in matters involving different layers of coverage and/or multiple policy periods.

Attorney Fee Review and Arbitration

• The firm has been retained to review and evaluate attorneys’ fee submissions by insured-retained defense counsel.
• We advise insurers concerning rights and obligations under statutes dealing with selection of defense counsel, and we represent insurers in arbitration of attorney fee disputes. 

Suspicious Claims

• Our practice includes litigation of suspicious claims, including arson and fraud.
• The firm is a leader in its knowledge, resources, and development of techniques to assist insurers in fighting fraud and misrepresentation.

Clark Hill's Property Insurance Law attorneys have developed a reputation nationally and internationally for our thoughtful representation of major carriers.

We provide carefully analyzed coverage opinions and practical advice based on our dedication to thoroughly understanding and keeping abreast of the latest legal developments in property insurance law. A hallmark of our practice is our litigation-avoidance and “good faith” counseling service.

We work hard to maintain close individual contact with our clients, to be extremely timely in responding to their needs, and to keep them well informed of new developments that may impact their industry or professional lives.

Our practice includes a full spectrum of services, including:

Personal and Commercial Lines Coverage and Claim Handling

We routinely provide coverage and claim handling advice regarding:

• The full range of coverage and other issues that arise in personal and commercial lines property insurance claims
• Complex disputes involving business interruption, extra expense, additional living expense and other “time element” claims
• Appraisals, as called for in the property insurance contract
• Utilization of and/or need for “White Waivers”
• Environmental, water loss, and mold issues
• Alternatives to litigation (and we represent clients in alternative dispute resolution forums)
• Conduct Examinations Under Oath, pursuant to the conditions of the insurance policy contract
• Loss scene counseling and management, including:
  • Working with appropriate experts to ensure the loss scene is properly documented, the scientific method is stringently utilized, and causation is clearly resolved
  • Ensuring proper collection and preservation of evidence to avoid claims of spoliation
  • Coordination of notice, access, inspections, etc. of all interested parties to the scene

Potentially Fraudulent Claims

We’ve counseled clients regarding literally thousands of potentially fraudulent claims, conducted nearly as many EUOs, and have offered coverage opinions that have successfully withstood the crucible of jury scrutiny.

The advice we give regarding these dangerous claims is informed by our experience trying numerous insurance fraud cases to successful defense verdicts. Because we’ve seen how these issues play out at trial, we are able to help our clients efficiently and successfully resolve these challenging files while avoiding potential pitfalls.

Typical assignments include:

• Legal advice and counsel re investigation of potentially fraudulent claims
• Conduct focused, probing, and effective, yet respectful and truth-seeking Examinations Under Oath, pursuant to the conditions of the insurance policy contract
• Prepare thoughtful analysis and coverage opinions clients can rely upon in resolving such claims
• Testify in defense of the company’s claim handling and decision in any later lawsuit

Superior Technical Knowledge Regarding Fire Cause/Arson

We’ve been deeply involved in the technical aspects of fire investigation for decades, and are intimately familiar with the most current version of NFPA 921 and NFPA 1033. We also have contributed to some of the seminal works in the field of fire investigation, have served as Legal Counsel to the California Conference of Arson Investigators, and also served on CCAI’s Board of Directors.

In recognition of our technical knowledge and experience, we repeatedly have been called upon by the International Association of Arson Investigators and California Conference of Arson Investigators to serve as experts and Instructors.

When counseling insurers faced with a potentially insured-caused arson fire, we often:

• Provide a wide range of loss scene counseling and management services including working with origin & cause investigators and other experts to ensure:
  • Alternative theories of causation are identified, explored, properly eliminated, and thoroughly documented
  • All pertinent evidence is properly identified, collected, and preserved
  • The scientific method is stringently utilized
  • Appropriate professional standards and guidelines are carefully followed
• Provide guidance and legal advice during the claim investigation and work closely with the insurer’s SIU
• Conduct focused, probing, and effective, yet respectful and truth-seeking Examinations Under Oath
• Work with forensic accountants and other experts as needed
• Prepare thoughtful analysis and coverage opinions clients can rely upon in resolving such claims
• Testify in defense of the company’s claim handling and decision in any later lawsuit

Rescission/Fraud in the Application

Again, we’ve tried these kinds of cases to successful jury verdict, so we have a keen appreciation of how these issues play out after the decision to rescind has been made. That experience guides our role as claim counsel, as we:

• Provide guidance, claim handling, and coverage advice regarding policy rescission issues
• Conduct focused, probing, and effective, yet respectful and truth-seeking Examinations Under Oath
• Prepare thoughtful analysis and coverage opinions clients can rely upon in resolving such claims
• Testify in defense of the company’s claim handling and decision in any later lawsuit

Catastrophes

• Coverage and claim handling advice regarding catastrophic losses
• Also experienced in handling major subrogation claims for insurers arising out of wildfires, structure fires, natural gas explosions, earthquakes, levee failures and other disasters

Specialty Coverages

Transportation Coverage (including marine, trucking, and aviation law)

Insurance coverage disputes involving the transportation industry requires a specific understanding of the particularized risks at issue including the various contractual relationships between the parties. Our attorneys have broad experience in the transportation industry representing domestic and foreign insurance carriers, P&I Clubs, ocean carriers, shippers, major railroads and aviation companies. It is this industry knowledge coupled with our renowned insurance practice that makes us an invaluable firm to turn with transportation insurance issues. Recent matters include:

• Coverage litigation involving recall of commercial airline engine parts
• Investigation and advice involving $20 million cargo loss involving cargo and commercial crime policies
• Advice and representation of insurer in multi-fatality oil rig explosion and pollution response
• Representation of trucking insurers in claims involving complex indemnity agreements
• Investigation of suspicious claims involving motor carriers, ocean carriers, yachts and recreational watercraft
• Investigation and coordination of response to pollution claims

Transportation Industry Involvement

Our commitment to the transportation industry is also demonstrated in our membership and involvement in various organizations including the Marine Underwriters of Southern California, the Maritime Law Association of the United States, the American Bar Association’s Admiralty and Maritime Committee and the Women’s International Shipping and Trading Association among other organizations. Our involvement in these organizations allow us to keep abreast of industry and legal updates including legislative and regulatory changes that impact the transportation industry.  

Environmental/Pollution

As concerns over pollution and regulatory measures to address those concerns have expanded, so too have pollution-related risks and insurance products to cover those risks. Initially provided on a claims made basis, some of those coverages are now becoming available on an occurrence basis, with specific products targeted for premises owners, contractors, both generally and on a project specific basis, and professionals, including, in the case of professionals, traditional claims made coverage for errors and omissions arising out of professional services.

Our attorneys have offered advice to insurers in the development of these products, has acted as national counsel for a major insurer in the management of its environmental claims and has represented numerous insurers in all manner of disputes, including litigation, over coverage since the inception of these policies. We are particularly well-suited to do so not only because of the depth of our knowledge and experience in insurance coverage issues but because Clark Hill also has a thriving Environmental Law group with a thorough understanding of the legal, regulatory and practical issues often central to the insurance coverage issues.

SIU/Potentially Fraudulent Claims

We’ve counseled clients regarding literally thousands of potentially fraudulent claims, conducted nearly as many EUOs, and have offered coverage opinions that have successfully withstood the crucible of jury scrutiny.

The advice we give regarding these dangerous claims is informed by our experience trying numerous insurance fraud cases to successful defense verdicts. Because we’ve seen how these issues play out at trial, we are able to help our clients efficiently and successfully resolve these challenging files while avoiding potential pitfalls.

Typical assignments include:

• Legal advice and counsel re investigation of potentially fraudulent claims
• Conduct focused, probing, and effective, yet respectful and truth-seeking Examinations Under Oath, pursuant to the conditions of the insurance policy contract
• Prepare thoughtful analysis and coverage opinions clients can rely upon in resolving such claims
• Testify in defense of the company’s claim handling and decision in any later lawsuit

Superior Technical Knowledge Regarding Fire Cause/Arson

We’ve been deeply involved in the technical aspects of fire investigation for decades, and are intimately familiar with the most current version of NFPA 921 and NFPA 1033. We also have contributed to some of the seminal works in the field of fire investigation, have served as Legal Counsel to the California Conference of Arson Investigators, and also served on CCAI’s Board of Directors.

In recognition of our technical knowledge and experience, we repeatedly have been called upon by the International Association of Arson Investigators and California Conference of Arson Investigators to serve as experts and Instructors.

When counseling insurers faced with a potentially insured-caused arson fire, we often:

• Provide a wide range of loss scene counseling and management services including working with origin & cause investigators and other experts to ensure: 
  • Alternative theories of causation are identified, explored, properly eliminated, and thoroughly documented
  • All pertinent evidence is properly identified, collected, and preserved
  • The scientific method is stringently utilized
  • Appropriate professional standards and guidelines are carefully followed
• Provide guidance and legal advice during the claim investigation and work closely with the insurer’s SIU
• Conduct focused, probing, and effective, yet respectful and truth-seeking Examinations Under Oath
• Work with forensic accountants and other experts as needed
• Prepare thoughtful analysis and coverage opinions clients can rely upon in resolving such claims
• Testify in defense of the company’s claim handling and decision in any later lawsuit

First Party Coverage Litigation

We were recently retained to defend a bad faith action filed by a retired police officer. The officer claimed that a thief had cleaned out a commercial structure where the police officer was storing several hundred thousand dollars’ worth of personal property consisting of fine art and collectibles. The theft claim was covered but, unfortunately, the police officer was drastically underinsured. The police officer contended that there was more than one occurrence based on evidence that the thief entered the property on several occasions over the course of a week. We removed the case to federal court and filed a motion for summary judgment asserting that there was only one occurrence and no bad faith as a matter of law. The motion for summary judgment was granted and our client was completely exonerated.   

In another notable case, the insured’s business claimed $1.6 million in losses alleged to have occurred during civil unrest and riots. Our insurer client’s investigation confirmed that the insured had in fact suffered a loss, but, working with a forensic accountant, also confirmed that the actual loss was substantially less than claimed. Based on those misrepresentations, and others, the policy was declared void, and the claim denied. The insured sued for breach of contract and bad faith. Over the course of six weeks, we tried the case to a complete defense verdict; later we had the insured’s Mercedes seized to satisfy the client’s Judgment Lien for awarded costs.

Water damage and mold cases typically are difficult to resolve on dispositive motion because they often present multiple material questions of dispositive fact (like which of several potential causes – some covered, some not – was the predominant cause of the damage(s) in question). On several occasions, however, we have won Summary Judgments for our insurer clients in such cases. For example, in one case we proffered evidence that the predominant cause of plaintiff’s claimed-damages was earthquake damage to the roof, exacerbated by other excluded causes under the policy. We bolstered that evidence with admissions we had obtained from plaintiff during discovery, as well as testimony she had given in an unrelated divorce case, which together established that she knew of the leaks and mold much earlier than she now claimed. The trial court granted Summary Judgment on the ground that plaintiff’s suit was barred by the one-year Suit Against Us condition, and we successfully defended that Judgment on appeal. Similarly, in another water damage and mold case, we secured several admissions from plaintiffs during their depositions showing their awareness of early manifestations of damage from the same now-claimed multiple causes (some covered, some not). Those admissions were central to a carefully crafted Motion For Summary Judgment in support of a Suit Condition defense. The trial court granted our motion, and we successfully defended the Judgment in our client’s favor on appeal.

In another case, the insured’s property was destroyed by fire only four days after he completed an application for insurance with our client. Our client’s investigation into the insured’s claim revealed that the insured’s application contained numerous false statements and omissions of other critical information. Therefore, the insurer rescinded the policy, and denied the claim. The insured sued for breach of contract, bad faith, bad faith denial of a contract, fraud, negligent misrepresentation, and intentional and negligent emotional distress. In deposition, plaintiff admitted that the critical information in the application (upon which the insurer had relied to rescind the policy) was inaccurate. But, he also asserted that those parts of the application had been completed by someone else sometime after he completed that application with his agent, and he pointed to certain physical aspects of the application that appeared to support those assertions! Despite these (and other) hurdles, at the end of a hard-fought six-week jury trial, the jury returned a complete defense verdict for our client on all causes of action.

The insured claimed that his home was one of several in the general area that burned to the ground as the result of a significant wildland fire. His claim was denied, and the policy declared void, by our client, his insurer, after it concluded that the insured had intentionally set fire to his property in an attempt to make it look like it was a victim of the nearby wildfire, and that he had misrepresented and concealed numerous facts during his presentation and attempted support of his claim. The insured sued, alleging breach of contract, bad faith, negligence, intentional and/or negligent infliction of emotional distress, and defamation. After a 6-week jury trial, our client was vindicated with a defense verdict on all causes of action.

Third Party Coverage Litigation

In a recent case we defended, an insured filed a lawsuit for breach of contract and bad faith against our insurer-client on multiple grounds; (1) that panel counsel retained by our client failed to vigorously defend the insured, (2) that panel counsel failed to keep the insured apprised of developments in the case, and (3) that the insurer breached its obligation to pay Cumis counsel where there was an alleged conflict of interest. Our attorneys convinced the insured that there was no bad faith and that a co-defendant’s insurer should pay the lion’s share of third party’s claim. We settled the case at a mediation with no payment by our client. Not only did our client pay nothing, but the client recovered a substantial sum from a co-insurer in reimbursement for the costs of defending the insured.

In another case, a fire destroyed the business of our client’s insured, and substantially damaged the businesses of each of the other tenants in a Menlo Park strip mall. We represented and counseled that insured’s insurance carrier not only regarding their insured’s 1st party property claims, but also regarding the 3rd party claims asserted against the insured by the other businesses and their insurers, and the owner of the building and its insurer. A thorough investigation and probing EUO revealed substantial evidence that our client’s insured had intentionally started the fire, and had intentionally misrepresented and concealed material facts during the claim investigation. Accordingly, we sought a Declaration from the Court that the policy was void, and the insurer owed nothing. Based on the strength of the sworn admissions we’d obtained during the insured’s testimony, we filed a narrowly tailored Motion for Summary Judgment. The Court granted the MSJ declaring the policy void, and that our client owed nothing – to its insured, or any of the other many claimants.

Insurer v. Insurer Litigation

We represented a primary carrier which was facing an enormous excess-of-policy-limits judgment against its insured. Our client settled the bad faith lawsuit at a mediation after giving notice of the mediation to the excess liability carrier, which obstinately refused to attend. We then sued the excess carrier on behalf of our client, the primary carrier, seeking reimbursement of that portion of the settlement which fell within the excess carrier’s policy. The trial court granted summary judgment in favor of the excess carrier on the grounds that the primary carrier had failed to obtain the excess carrier’s written consent to the settlement. We successfully appealed the summary judgment and subsequently recovered $200,000 from the excess carrier.

Clark Hill’s audit team comprises 6 attorneys and additional support staff, including a paralegal and additional administrative and technical support staff. Our audit experience spans virtually all 50 states. We have audited a wide variety of risks and accounts, including: miscellaneous errors & omissions programs; workers compensation programs; hospitals; allied health risks; correctional health risks and physicians. In addition to our audit experience, the attorneys in our group have experience defending professional liability, general liability, automobile liability and property damage lawsuits through trial. Further, we have represented a number of insurers in coverage disputes in a variety of jurisdictions from state and federal courts to arbitration panels in the U.S., London and Bermuda.

Because of our experience, we can provide a wide range of services with respect to claim audits, including:

Essential Services

Our reviews focus on (a) the characteristics of the insured that affect risk, (b) the quality of its risk management and quality assurance programs, (c) the skill with which the insured, its lawyers and its outside claims service investigate and defend claims and potential claims, (d) legal and judicial factors in the insured's jurisdiction, and (e) the insured's claim history, including our independent evaluation of all open and potential claims.

We routinely audit accounts, with a focus on open claims and potential claims that may present exposure to the insurer or reinsurer. In addition to commenting on pertinent liability and damages issues presented by the claims and potential claims, we advise insurers and reinsurers on coverage questions and alert them to claims that are not being properly defended. In addition, we assess whether claim handling guidelines are being followed, including but not limited to an analysis of: the adequacy and timeliness of reserves; whether the reserves are being set consistent with the organization's claim handling philosophy and best claim handling practices; average length of time from file opening to file closure; and file documentation and organization.

The sampling techniques and methodology employed in our audits generally consist of a few basic factors, including: an analysis of the current reserves (i.e., we will review all circumstances or claims reserve at or above a minimum threshold); an analysis of certain "bad" circumstances or claims, without reference to a reserve based on the facts, the venue and the caliber of the claimant's attorney; and a review of certain closed claims, without reference to the amounts paid, to ensure consistency of claims handling over a particular time period.

In addition to simply performing an audit, we are uniquely qualified to share our findings and work with the organization to achieve better results and collaboratively work on better practices and/or solutions if areas of improvement are identified.

Risk Management and Claim Handling Services

We can provide advice regarding an organization's methods of identifying potential claims, and the effectiveness of its methods of managing and resolving actual claims. To that end, we provide assessments of an insured's overall claims handling practices, and provide necessary counseling and assistance to an insured if improvement is needed.

We have drafted claims handling manuals and redesigned claims handling procedures for numerous organizations across the US. We also provide a detailed analysis of the local environment, verdicts and settlement values, trends and tort refoun status. We audit an organization's risk management procedures and share information regarding best practices that have proven effective in reducing exposures in other programs we monitor.

High Exposure Claims Management Advice

Our experience includes being actively involved in high exposure claims. We work closely with insureds and local counsel to share information from our firm's comprehensive expert database or provide guidance on legal theories or case values we have observed in our dealings with similar cases in a particular venue. As needed, we also participate in settlement negotiations and attend mediations and trials to achieve a favorable case resolution. The number and variety of risks whose claims we review have placed us in a good position to act as an additional resource for the defense in evaluating a claim, selecting counsel and expert witnesses, and structuring settlements.

Coverage Issues

 As noted above, we routinely review all reported losses for any coverage questions and provide detailed analyses of any issues to our clients. We have also been retained to provide coverage advice, and if necessary, litigate coverage disputes on individual claims. In addition to providing opinions on coverage issues, we have also litigated numerous bad faith claim handling cases over the years, as well as disputes with other insurers over allocation.