The FTC’s Negative View of Negative Options – Are Expanded Regulations Coming?

The Federal Trade Commission’s “Negative Option Rule” is up for review, and the FTC is steering toward stricter regulations for automatic renewal plans and subscription programs. The FTC completed its last regulatory review of the Negative Option Rule in 2014 and decided then to retain the rule in its current form. But, will this time be different?

The Rule Under Review

The rule under review is the “Rule Concerning the Use of Prenotification Negative Option Plans,” also referred to as the “Negative Option Rule.” However, the scope of the Negative Option Rule only covers prenotification plans, like book-of-the-month clubs, where the seller sends notice of a book to be shipped and charges for the book only if the consumer takes no action to decline the offer, such as sending back a postcard or rejecting the selection through an online account.

In its current form, the Negative Option Rule does not cover negative option programs as typically defined to encompass continuity plans, automatic renewals, and free-to-pay plans or nominal-free-to-pay plans, where a trial period rolls into an automatic renewal program unless the consumer cancels.

According to the FTC, since the last regulatory review of the Negative Option Rule, “evidence strongly suggests that negative option marketing continues to harm consumers.” In its notice announcing the rule review, the FTC referenced more than 20 recent FTC cases involving negative option marketing as well as state cases challenging negative option marketing. Additionally, the FTC said it received thousands of complaints each year related to negative option marketing, suggesting there is “prevalent, unabated consumer harm in the marketplace.”

Existing Legal Framework for Negative Option Marketing

Notwithstanding the limited scope of the Negative Option Rule, there is an existing, comprehensive framework of laws and regulations that the FTC uses against marketers of membership clubs, automatic renewal plans, subscriptions, and other such arrangements that the FTC deems to be unfair or deceptive. For telephone sales, the Telemarketing Sales Rule (TSR) has long specified disclosures for free trials and automatic renewal offers made by phone. The Restore Online Shoppers’ Confidence Act (ROSCA) notably covers online sales. The Electronic Fund Transfer Act (EFTA) applies when consumers use debit cards for recurring charges and requires the consumer’s written authorization for such charges. Section 5 of the Federal Trade Commission Act, which generally prohibits unfair or deceptive acts and practices, provides an extra, all-encompassing layer that can easily be applied to any aspect of negative option marketing. And, the plentiful collection of stipulated FTC orders in this space provide a roadmap of the FTC’s evolving views about compliance.

The FTC characterizes these various existing components as a “patchwork of regulations” that does not provide consistent guidance to industry or consumers across different media and different offers. Some might differ with the FTC’s view on this point, as the regulations seem quite consistent in providing a solid structure for negative option marketers based on three core principles: making clear and conspicuous disclosures about the material terms of the offer; obtaining explicit, informed consent to the automatic renewal offer; and, providing a simple and easy method for the consumer to cancel out of the negative option offer.

It may be that the FTC is seeking a more prescriptive instruction to marketers on making disclosures, dictating specific words or disclosure placement that would likely remove at least some business judgment, creativity, and differentiation from marketing practices. The FTC specifically raised ROSCA’s requirement of a “simple mechanism” to cancel as problematic because it does not specify which methods would suffice. In enacting ROSCA, Congress concluded that it need not further specify how cancellation should be effected, but the FTC clearly views this rule review proceeding as a way to make such a pronouncement.

Would an Expanded Negative Option Rule Address the FTC’s Concerns?

In our view, no. Many of the companies sued by the FTC for ROSCA and other violations allegedly engaged in practices that no additional laws or regulations would have stopped. For example, as described by the FTC in many recent complaints, those practices included using fake web sites with ROSCA-compliant disclosures and consent mechanisms to obtain payment processing from banks, yet making actual sales through other web pages that had no disclosures at all.

In other words, companies that want to dupe consumers into buying their products and services do not need further instruction on what not to do. Meanwhile, those striving to create long-standing customer relationships and sell useful products and services through the convenience of automatic renewal programs would likely be hindered by more regulations, at significant additional compliance costs and expense with no material benefit to consumers.

An expanded Negative Option Rule also would not serve to preempt the various, often disparate state laws that have cropped up since 2014, including those in California, Virginia, Vermont, the District of Columbia, and others. To the extent there is a “patchwork of regulations,” it is happening at the state level, where things like different font-face requirements and renewal notice timeframes are cropping up. Moreover, there are new MasterCard “regulations” and forthcoming Visa rules that impose additional, new compliance requirements. Failure to comply with those rules runs the risk of losing processing relationships.

There may be other reasons the FTC wants to expand the Negative Option Rule, such as to require pre-billing notices for recurring payments or order confirmation notices like those required by some states. Or, the FTC may be considering whether it could use an expanded rule to obtain enhanced civil penalties for violations. All possibilities should be considered.

The general public, including companies and industry groups, have until December 2, 2019 to comment on the FTC’s proposal to expand the Negative Option Rule. Please let us know if you are interested in this topic or participating in the proceeding.


The FTC’s Negative View of Negative Options – Are Expanded Regulations Coming? syndicated from https://888migrationservicesau.wordpress.com

Midstream Dedications – Colorado Bankruptcy Court Levels the Playing Field

Co-authors Lydia Webb and Rusty Tucker

Until Monarch Midstream v. Badlands Energy, midstream companies facing rejection of their contracts in a producer’s bankruptcy were left with Abraham Lincoln’s last favorite negotiating option: If the both law and the facts are against you, pound on the table. Under Sabine (which we covered here, here, and here) gathering agreements are not covenants running with the land and can be rejected in the producer’s bankruptcy. Sabine was the only law on the books, but now a Colorado bankruptcy court has determined that a gathering agreement was a covenant running with the land.

This opinion makes for a fair fight and gives midstream companies legal authority that agreements dedicating oil and gas reserves should survive bankruptcy unscathed. Still following Mr. Lincoln, they can now pound the law and not the table.

Different venue, different result

E&P debtor Badlands sought to sell its Utah assets in bankruptcy. Midstream company Monarch objected to the sale free and clear of its gathering agreement, arguing that it could not be rejected in bankruptcy because its dedication was a covenant running with the land. Badlands responded with Sabine, but the court was not persuaded. Sabine involved Texas law (albeit construed by a New York court); these assets were located in Utah, and although the two states’ law on covenants was similar, it was different enough to allow for a different conclusion. As with Sabine, the two elements at issue were “touch and concern” and “horizontal privity”.

Touch and concern

The dedication satisfied touch and concern because it burdened Badlands’ interest in the dedicated leases and reserves in place, which are real property interests under Utah law. In Sabine a similar dedication failed to touch and concern real property because the court concluded that it burdened gas “produced and saved,” which the court said was personal property. Although Utah has a slightly broader definition of touch and concern, the court implied that a dedication of reserves, leases, and related lands would satisfy the analysis under Sabine.

Horizontal privity

Horizontal privity was satisfied. Badlands granted Monarch an easement across its leases and adjoining land for the purposes of installing and operating a gathering system. The parties’ simultaneous ownership of property interests on the same land satisfied privity to the extent that it was required under Utah law. Contrast this with Sabine, which construed Texas law as requiring the covenant be created in a conveyance of real property. The Badlands court held the dedication itself—although not a fee estate—constituted a conveyance that burdens Badlands’ real property interest (the leases and reserves), thereby satisfying Sabine if it applied.

Shameless plug

Our Gray Reed attorneys have been at the forefront of this fight since the beginning. They can guide you through the uncertainties that remain in these situations. And here is a more detailed discussion of the case.

If you’ve ever been forced to litigate in a venue not to your liking, this musical interlude is for you.

 

Midstream Dedications – Colorado Bankruptcy Court Levels the Playing Field syndicated from https://888migrationservicesau.wordpress.com

IvI Exclusion’s Carve-Back Preserves Coverage for Entire Claim

The insured vs. insured exclusion is a standard exclusion in most management liability insurance policies. The exclusion precludes coverage for claims brought by one insured against another. The IvI exclusions in most management liability insurance policies typically include a number of exceptions to the exclusion preserving coverage for claims that otherwise would be excluded. In a recent decision, a Texas intermediate appellate court found that the IvI exclusion in an investment management firm’s policy did not preclude coverage for an arbitration award because the underlying dispute arose out of an employment practices claim and therefore the dispute – including even the derivative claims the claimant asserted in the arbitration – came within the exclusion’s coverage carve-back for wrongful employment practices claims. As discussed below, the court’s opinion has a number of interesting features.

 

The Texas court’s August 19, 2019 opinion can be found here. An October 10, 2019 post on the Wiley Rein law firm’s Executive Summary Blog about the decision can be found here.

 

The Underlying Dispute

In 2008, Russ Gatlin and George Stelling formed an investment management firm and several related entities, Prophet Management.  Stelling and Gatlin were the firm’s only two members. As partners, they each had rights to year-end profit distributions and to the firm’s carried interests.

 

In October 2011, Gatlin removed Stelling as Prophet’s COO and as president of a Prophet portfolio company. Stelling sent Gatlin a demand letter alleging wrongful termination and that Prophet and Gatlin were spreading rumors to harm his reputation and damage his career. Stelling’s claims were initially the subject of mediation, which was unsuccessful. Stelling then submitted his claims to arbitration.

 

In the arbitration, Stelling contended that his termination was wrongful. He also asserted derivative claims on behalf of the various Prophet entities. As the appellate court later said in its opinion in the subsequent coverage lawsuit, each count in Stelling’s statement of claim in the arbitration “is rooted in Stelling’s termination or its consequences.” The arbitration resulted in a substantial award in favor of Stelling.

 

The Insurance Coverage

At the relevant times, Prophet maintained a program of management liability insurance that consisted to a primary $5 million layer and two $5 million excess layers. When Stelling first sent his demand letter, Prophet submitted the letter to its management liability insurance carriers. All three carriers initially denied coverage. However, the primary and first level excess carriers ultimately paid their limits of liability in payment of various defense expenses and indemnity amounts. The second level excess carrier (hereafter, the Insurer) declined to pay Prophet’s remaining defense expenses and indemnity amounts.

 

Among other things, the insurer argued that coverage for Stelling’s claims under the management liability insurance policy’s EPL coverage part was precluded by the policy’s insured vs. insured exclusion. The insurer also argued that even if coverage was not entirely precluded by the IvI exclusion, coverage was at least precluded under the exclusion for the derivative claims Stelling had asserted in the arbitration, and therefore that the various defense fees and indemnity amounts had to be allocated between covered and non-covered amounts. The insurer also argued that if the various amounts were properly allocated, it would be apparent that the underlying policies had not been exhausted by payment of covered loss, and therefore that it excess coverage had not been triggered.

 

Prophet filed a coverage lawsuit against the insurer in Texas state court. The parties filed cross-motions for summary judgment. The trial court entered summary judgment in favor of the insurer. Prophet appealed the trial court’s ruling.

 

The August 19, 2019 Opinion

In a detailed opinion written by Justice Bill Whitehill for a unanimous three judge panel, the Texas intermediate appellate court reversed the trial court’s ruling with respect to the IvI exclusion and allocation issues.

 

In addressing the appeal, the appellate court presented the issues involving in a neat and smart flow chart:

 

 

The court found that because the underlying dispute involved a claim by one insured person against another insured person, the IvI exclusion was triggered. However, the parties disagreed about whether the wrongful employment practices claim coverage carve-back in the exclusion preserved coverage for the claim. The court described the parties’ positions as “ships passing in the night.”

 

Among other things, the insurer argued that the carve-back could not apply to preserve coverage for the entire underlying dispute because in the arbitration Stelling had presented derivative claims on behalf of Prophet itself that were not wrongful employment practices claims.

 

In rejecting the insurer’s position, the appellate court found that all of the substantive counts in Stelling’s arbitration statement of claim involved Interrelated Wrongful Acts within meaning of the policy. The court also noted that the policy provides that more than one claim involving Interrelated Wrongful Acts constitute a single Claim — which Claim, the court further found, began when Stelling first sent his October 2011 demand letter to Prophet.

 

The court further noted that the exclusion’s carve-back preserved coverage for “Claims for Wrongful Acts in connection with Wrongful Employment Practices,” observing that the Claim for which the carve-back preserves coverage is not limited only to those acts specifically identified as Wrongful Employment Practices , it also includes Interrelated Wrongful Acts “in connection with” such practices.

 

The court concluded that the Stelling Claim “arose out of” Prophet’s termination of Stelling’s employment. That the claim initially labeled as wrongful termination was subsequently expanded or refined “is of no consequence” because “the substance of all of Stelling’s assertions “was interrelated and made in connection with his Wrongful Employment Practices Assertions.”

 

The court found that “all requisites” of the Wrongful Employment Practices exception to the exclusion had been met, and therefore concluded that Prophet has “satisfied its burden that this exception negates the IvI exclusion.”

 

Finally, with respect to the insurer’s argument based on the need for an allocation between covered and noncovered amounts, the court held that the insurer had failed to carry its burden to distinguish between covered and noncovered amounts.

 

Discussion

It is important to note with respect to the court’s conclusions that the court was applying Texas law, including Texas legal principles governing the interpretation of insurance contracts. These rules of construction were a key part of the court’s analysis. In connection with several policy interpretation issues, the Court, applying Texas rules of construction, held that the policyholder was entitled to prevail because the policyholder had offered “at least one reasonable interpretation” of the relevant terms. The importance of these Texas rules of construction to the court’s analysis may limit the extent to which the Texas court’s interpretations may be persuasive to courts in other jurisdictions that have different rules of construction.

 

There is another aspect of this insurance dispute’s context that arguably is also relevant — that is that the insurer in this dispute was the second level excess insurer that was contesting its obligation to pay even though the two underlying insurers had fully paid out their limits. An excess insurer in this position is never going to be perceived as occupying the high ground and in fact will likely be portrayed as trying to dodge the coverage obligations that the other insurer had fulfilled. And whether or not these kinds of considerations had any effect on the appellate court’s views of this dispute, they certainly are relevant for those of us in advisory positions when counseling insurance buyers about the various insurer’s claims paying reputations.

 

The court’s conclusion that the coverage carve-back preserved coverage for all of Stelling’s claims, including even the derivative claims he asserted in the arbitration proceeding, is interesting for a number of reasons, most importantly because of the way the appellate court read the policy as a whole in order to determine the meaning and scope of the coverage carve-back. The relevance of the policy’s various Interrelated Wrongful Act provisions were instrumental in the court’s conclusion that the coverage carve-back preserved coverage for Stelling’s entire claim. The court’s analysis provides an interesting illustration of the often-stated principle that insurance contracts are to be read as a whole.

 

The court’s conclusion with respect to the coverage carve-back is interesting in another, more general way – that is, that while the IvI exclusion often comes into play, the exclusion has a number of exceptions in the form of the coverage carve-backs that may operate to preserve coverage notwithstanding the exclusion. The carve-backs are not always relevant and therefore may not always apply to preserve coverage. But as this case shows, the exclusion’s coverage carve-backs can be critical in preserving coverage in certain instances. In addition, the court’s analysis shows how important the wording of these exceptions to the exclusions can be.

 

There is an interesting post on the Sua Sponte Dallas Appellate Blog about the Texas appellate court’s opinion, here.

 

For a prior post discussing another one of the standard IvI exclusion coverage carve-backs, please refer here.

The post IvI Exclusion’s Carve-Back Preserves Coverage for Entire Claim appeared first on The D&O Diary.

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Environmental Liability-Related Securities Suit Filed against DuPont Spin-off Chemours

As I have previously noted on this blog, one recurring source of securities class action litigation exposure for publicly traded companies is the companies’ underlying environmental liabilities. In the latest example of this type of litigation, a plaintiff shareholder has now filed a securities suit against The Chemours Company, a chemical company that spun out of E.I. du Pont de Nemours and Company (“DuPont”) in July 2015. One of the extraordinary things about the new securities suit is that it draws heavily on allegations Chemours itself raised in a 2019 Delaware Chancery Court lawsuit it filed against DuPont, in which, among other things, Chemours alleges that when DuPont spun out the company, its environmental liabilities reserves were “spectacularly” inadequate. A copy of the on October 8, 2019 securities class action complaint filed in the District of Delaware against Chemours, its CEO, and its CFO can be found here.

 

Background

Prior to its July 2015 spin out, Chemours had been the Specialty Chemicals division at DuPont. Prior to the spin-off, DuPont had had a series of environmental challenges arising from the manufacture in its Specialty Division of various chemicals, including in particular its manufacture of perfluoroalkyl and polyfluoroalkyl substances (“PFAS”), toxic chemicals that according to the subsequent securities complaint “have become the basis for environmental regulatory actions, governmental prosecutions, personal injury lawsuits, and extensive remediation and other clean-up efforts.”

 

The securities complaint alleges that DuPont had long known about the extent of its environmental liabilities. The complaint alleges that instead of “actually addressing” these liabilities, DuPont developed a plan to “unload the vast majority of its environmental liabilities onto Chemours.” In the Delaware Chancery Court lawsuit that Chemours filed against DuPont in May 2019, Chemours alleged that DuPont set about to “shift as much liability onto Chemours as possible – and at the same time to extract for DuPont a multi-billion dollar dividend payment from the new company.”

 

The securities complaint alleges that in connection with the spin-off, Chemours concealed these facts, instead marketing the spin-off by saying that its environmental liabilities were “well understood [and] well-managed” and that the possibility of incurring environmental liabilities greater than its accruals was “remote.” The complaint further alleges that throughout the Class Period, Chemours had reassured investors that any potential environmental liability exposures exceeding the accrual amounts would not be material to the company’s financial position.

 

The securities complaint alleges that “in reality, the Company’s accruals were woefully insufficient and Chemours knowingly and systematically understated its known environmental liabilities exposure.” In making these allegations, the securities complaint quotes extensively from the complaint that the company filed against DuPont in May 2019, and that the Chancery Court unsealed on June 28, 2019.

 

In the Delaware lawsuit, Chemours claims that DuPont misled the company and its executives about the amount of liabilities the spinoff would be taking on and that Chemours was forced to accept responsibility for what could total billions of dollars. Among other things, the Delaware lawsuit alleges that while Chemours inherited only 19% of DuPont’s business lines, it was spun off with two-thirds of DuPont’s environmental liabilities and 90% of DuPont’s pending litigation by case volumeIn the Delaware lawsuit, Chemours seeks a declaratory judgment that it is not obligated to indemnify DuPont for the full cost of environmental liabilities, as would otherwise be required under the separation agreement that supported the spin-off, or alternatively that DuPont should return the $3.91 billion dividend Chemours paid DuPont at the time of the spinoff.

 

The subsequent securities lawsuit complaint, drawing on the allegations in Delaware lawsuit, alleges that contrary to what Chemours said in its SEC filings that the chances of its environmental liabilities exceeding its $500 million accruals as being “remote,” the company in fact, as it stated in its Delaware complaint, faced environmental liabilities of over $2.5 billion – an amount that does not even take into account the company’s PFAS litigation exposure.

 

The securities complaint, relying on the allegations in the Chancery Court complaint alleges that throughout the class period, Chemours made “misrepresentations to investors” and that it “concealed the true extent of the massive environmental liabilities the Company incurred from decades of producing and releasing a variety of chemicals that have been linked to cancer and other serious health consequences.”

 

The complaint alleges that in the company’s August 1, 2019 press release and its August 2, 2019 SEC filing on Form 10-Q, the company disclosed significant increases in the Company’s estimated liabilities, including with respect to numerous new legal and regulatory actions related to PFAS. The complaint alleges that on these disclosures, the company’s share price declined 19% (after having already declined 10% following the unsealing of the Delaware Chancery Court complaint).

 

The securities lawsuit complaint purports to be filed on behalf of a class of Chemours investors who purchased the company’s securities between February 16, 2017 and August 1, 2019. The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks to recover damages on behalf of the plaintiff class.

 

Discussion

As I noted at the outset, this lawsuit is only the latest example of a securities class action lawsuit arising out of underlying environmental liability exposures. The most recent prior example is the lawsuit filed in August 2019 against 3M, which I discussed in a prior post (here). The interesting thing about these two lawsuits is not only that the both arise from underlying environmental liabilities but that both of the securities suits refer to the defendant companies’ expanding liability exposures relating to PFAS litigation – a significant point that may be of interest to D&O underwriters attempting to develop underwriting criteria relating to applicant companies’ environmental liability exposures.

 

It is interesting to note that while the complaint refers extensively to statements made at the time of the July 2015 spinoff, the beginning date of the purported class period is not the date of the spinoff, but rather is February 16, 2017, the date of the company’s year-end 2016 earnings call, in which the company’s CEO made numerous statements relating to the recent settlement of an Ohio MDL action and in which the CEO make statements about the settlement’s impact on the company’s environmental liabilities exposure. The securities complaint alleges that these various statements were false and misleading.

 

Whether or to what extent these February 2017 statements may support the plaintiff’s liability claims remains to be seen, but the fact is that the earlier statements made in connection with the July 2015 spinoff and cited extensively in the complaint cannot be the basis for liability claims on behalf of an investor class who did not purchase the company shares until on or after February 16, 2019.

 

The most distinctive feature of the new complaint is the extent to which the plaintiff is able to rely on the company’s own allegations in the separate Delaware Chancery Court action. The company’s Delaware complaint is written in particularly vivid language, on which the plaintiff in the securities suit heavily relies. However, most of the allegations in the Delaware complaint relate to disclosures and valuations made in connection with the spin-off — that is, made well before the start of the class period stated in the securities complaint. It remains to be seen how the company might respond to allegations based on the company’s own statements in the Delaware lawsuit, but one probable response is that the company’s own allegations in the Delaware complaint are irrelevant to the securities suit, with its later class period.

 

In any event, as this lawsuit and the prior lawsuit against 3M show, companies’ environmental disclosures clearly will face increased scrutiny. This latest complaint underscores a point that I have made in prior posts, which is that companies’ environmental liabilities and disclosures can be the source of significant management liability litigation exposure, including securities class action litigation exposure. As numerous examples show, the management liability litigation exposures can be serious.

 

D&O insurance underwriters considering companies whose operations may present environmental concerns will want to review the environmental disclosures in the companies’ periodic reports in order to assess the extent to which the disclosures provide a specific and detailed picture of the company’s environmental compliance circumstances. As noted above, exposures to PFAS related regulatory action and litigation may be of particular concern.

 

As for companies that have environmental liability and regulatory exposures, it clearly is going to be important for them to ensure that their D&O policy contains no pollution exclusion (as is the case in many current D&O insurance policies, which, rather than including a pollution exclusion simply carve out environmental remediation costs from the definition of covered loss), or, if they have a pollution exclusion, that the exclusion contains a provision carving back coverage for derivative claims and securities suits.

The post Environmental Liability-Related Securities Suit Filed against DuPont Spin-off Chemours appeared first on The D&O Diary.

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Not Everybody Can Sue the EPA

That’s a good thing if you like what the EPA is doing, not so much if you are its sworn enemy. In Center for Biological Diversity v. US EPA the plaintiff did not have standing so sue the EPA over the granting of a water discharge permit. The court dismissed the suit and would not resolve the substantive issues.

The basis of the suit

The Clean Water Act prohibits discharge of pollutants from any point source without a permit from the EPA. The EPA issued a general permit for various oil and gas operations in the central and western portions of the Gulf of Mexico. The CBD and other organizations petitioned the Fifth Circuit to review the grant of the permit, alleging that it violated the National Environmental Policy Act and the Clean Water Act in several ways.

Standing, the right to sue

Standing for an organization to sue is determined by the “associational standing doctrine”: In a three-part test,

  • An organization’s member must have an injury in fact,
  • that is fairly traceable to the conduct of the defendant, and
  • that is likely to be redressed by a favorable judicial decision.

The question

Could an individual member of CBD show that he or she suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent? Here, they could not.

An injury to the environment is insufficient to establish injury. Sometimes the member’s aesthetic, recreational and scientific interests provide that link. The injuries asserted by the petitioners in this case depend on four conditions:

  • discharge of pollutants in the Gulf,
  • discharges in areas where the petitioner’s members have interests,
  • discharges are present at a time relevant to petitioner’s members’ interests,
  • discharges negatively affect petitioner’s members’ interests.

Was there a geographic nexus?

An interest in an area roughly in the vicinity of a project site is not sufficient. The petitioner’s members must plan to make use of specific sites where environmental effects would allegedly be felt. While one member claimed to plan to visit specific locations, the permit authorizes discharges in a very generalized area. The members’ affidavits did not provide nearly enough information to infer with any degree of certainty that any discharges would geographically overlap with their interests.

Was there a temporal nexus?

An affiant stated that he intended to take boat trips to platforms operating under the permit. But there was no evidence that his boat trips would coincide with timing of discharges.

You can’t commit harikari and then sue the sword maker

Critical to an aesthetic injury is whether an experience was actually offensive to the plaintiff. One affiant said he intended to go looking for oil spills. That doesn’t count. Standing cannot be conferred by a self-inflicted injury.

Is the injury traceable?

The EPA prepared an allegedly inadequate Environmental Impact Statement. The CBD did show that if the EPA had properly prepared and considered an EIS before implementing its plans it might have not issued the permit. But that showing alone was not sufficient. The plaintiff must show that the injury is fairly traceable to the challenged action of the government and not the result of independent action of third parties not before the court. The affidavits supporting the claim had conclusory assertions, which are not evidence.

Musical interludes

A Cajun fiddler for a Louisiana case: D’Jalma Garnier, brother of Bob Dylan’s bassist, grandson of the leader of N. O.’s Camelia Brass Band, born in … Minnesota?

And RIP Ginger Baker.

Not Everybody Can Sue the EPA syndicated from https://888migrationservicesau.wordpress.com

Guest Post: India: The Consumer Protection Act, 2019 – Exposures & Liability Insurance Protection

Umesh Pratapa

In the following guest post, Umesh Pratapa takes a look at the new Indian Consumer Protection Act, 2019. As Umesh discusses below, the Act not only has important implications for the rights of consumers, but it also has important liability insurance, product liability insurance, and professional liability insurance implications in Indian as well. Umesh’s article was originally published in BimaQuest September 2019 issue.  Reproduced with kind permission of the Publisher, National Insurance Academy, Pune, India. I would like to thank Umesh for his willingness to allow me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Umesh’s article.

 

____________________________

The penal law of ancient communities is not the law of crimes, it is the law of wrongs the person injured proceeds against the wrong doer by an ordinary civil action and recovers compensation in the shape of money damaged if he succeeds.” – Sir Henry Maine

 

The long awaited, much debated and well reformed consumer protection legislation is finally in place – The Consumer Protection Act 2019. It attempts to widen the ambit of the legislation and simplify the processes towards achieving the avowed objective of consumer protection.

 

It is heartening to see the law makers discussing the nuances of various provisions of the bill. Some extracts from the Lok Sabha debate are given below.

 

Now to end, I would like to put forward a true example where a woman tried to sue a butter company that had printed the word ‘LITE’ on its product’s packaging. She claimed to have gained so much weight from eating that butter, even though it was labelled as being ‘LITE’. In the court, the lawyer representing the butter company simply held up the container of butter and said to the judge, “My client did not lie. The container is indeed light in weight”. The woman lost the case. From this, it is evident that consumer protection is a crucial and sensitive matter which is to be dealt with proper caution. I hope this Bill will make concerned changes to make itself more promising” – Shrimati Pratima Mondal (Jaynagar)

I can give you a good example about it. One day, a man came to me. He told me that his dhoti is torned due to a nail fitted in railway seat. I asked him to file a complaint against railways. He filed a complaint. The litigation took a long time but at last the court ordered railways to pay the expenses of fares for trips to Mumbai and also to gift of 2 dhotis to the complainant. This is a classic example of alertness and awareness. Government cannot intervene in everything and everywhere. Citizens should be cautious about their consumer rights and also to fight against injustice. You have given the much needed protection to them through this bill. But, I think awareness is the key to all the problems. We should focus more and more on awareness. We should come out with more ‘Jago Grahak Jago like Campaigns’. Lastly, I would like to reiterate that more funds should be allocated for courts. We cannot discuss all the issue of the bill due to paucity of time. But, I think commitment and willingness of the Government is more important.” – Shri Girish Bhalchandra Bapat (Pune)

 

(Source: Loksabha Debates – Tuesday, July 30, 2019/ Shravana 8, 1941 (Saka))

 

One of the major advantages this Act has bestowed upon the consumer is that the aggrieved party can now file the complaint even from where he/she resides unlike earlier where it had to be filed in the jurisdiction where the seller or service provider is located. The earlier provision had significant cost and time implications for the complainant. The latest provision is more beneficial to the consumer because e-commerce and e-transactions are on the rise and the service providers/ sellers may have their registered offices anywhere in the world.

 

Let us now look at some of the salient features of the Consumer Protection Act (CPA), 2019:

 

Consumer: “Who is a consumer” is defined under Sec. 2 (7) of the Act. A consumer is defined as a person who buys any good or avails a service for a consideration. It does not include a person who obtains a good for resale or a good or service for commercial purpose. It covers transactions through all modes including offline and online through electronic means, teleshopping, multi-level marketing or direct selling. It does not include anyone obtaining goods or availing services without consideration.

 

Rights of consumers: The rights which are listed under Sec. 2 (9) include:

 

  1. the right to be protected against the marketing of goods, products or services which are hazardous to life and property;
  2. the right to be informed about the quality, quantity, potency, purity, standard and price of goods, products or services, as the case may be, so as to protect the consumer against unfair trade practices;
  3. the right to be assured, wherever possible, access to a variety of goods, products or services at competitive prices;
  4. the right to be heard and to be assured that consumer’s interests will receive due consideration at appropriate fora;
  5. the right to seek redressal against unfair trade practice or restrictive trade practices or unscrupulous exploitation of consumers; and
  6. the right to consumer awareness

 

Central Consumer Protection Authority: The Act provides for the establishment of an executive agency known as the Central Consumer Protection Authority (CCPA) to promote, protect and enforce the rights of consumers; make interventions when necessary to prevent harm to consumer arising from unfair trade practices and to initiate class action including enforcing recall, refund and return of products, etc. This fills an institutional gap in the regulatory regime.

 

Penalties for Misleading Advertisement: Provision is made for imposing penalties on a manufacturer or service provider who causes a false or misleading advertisement to be made which is prejudicial to the interest of consumers. An endorser of misleading advertisement also can be punished.

 

Consumer Disputes Redressal Commission: The Act provides for several provisions to simplify the consumer dispute adjudication process. The pecuniary jurisdiction for such redressal commissions have been enhanced in comparison with the 1986 Act. The Act provides for establishment of consumer mediation cell as an Alternate Dispute Resolution Mechanism. Consumer Mediation Cell will be attached to the Redressal Commission at the District, State and at the National level.

 

Product Liability: This is a major and significant inclusion in the Act. It codifies the principle of product liability with respect to sale or supply of defective products or delivery of defective services to consumers. It specifies liability of product manufacturer, liability of product service provider, liability of product sellers, exceptions to product liability action. The chapter, dealing with product liability, shall apply to every claim for compensation under a product liability action by a complainant for any harm caused by a defective product manufactured by a product manufacturer or serviced by a product service provider or sold by a product seller. This also specifies the situations in which exceptions to product liability action apply.

 

Definitions of Product liability and Product liability action are given below:

 

Sec. 2 (34): “product liability” means the responsibility of a product manufacturer or product seller, of any product or service, to compensate for any harm caused to a consumer by such defective product manufactured or sold or by deficiency in services relating thereto;

Sec 2 (35) “product liability action” means a complaint filed by a person before a District Commission or State Commission or National Commission, as the case may be, for claiming compensation for the harm caused to him.

 

What do all these mean and hold for liability insurance in India?

 

It is important to note that for the first time a complete chapter is dedicated to product liability in the Act. “Who and when is responsible” is specified with timelines for various actions. Authority also has been given to grant punitive damages if the circumstances dictate. It may be noted that a product manufacturer shall be liable in a product liability action even if he proves that he was not negligent or fraudulent in making the express warranty of a product.

 

The Act provides for both civil and criminal penalties including specifying the amounts. So, all entities in the product supply chain are expected to be proactive and vigilant and put in place best practices in every sphere – be it design, production, labeling, marketing or distribution. Should something go wrong in spite of all the care, caution and best practices, the port of call should be insurance cover.

 

The following covers are considered relevant in this context while a few other covers also may become necessary depending upon circumstances.

 

Product Liability Insurance Policy:

Anyone who makes products available to the public runs the risk of being held responsible for the injuries those products cause. Claims may result from a defect in the product, a deficiency in the packaging, inadequate or wrong labelling on any information relating to the product. Governments all over the world are enacting legislations in this sphere and taking steps for vigorous enforcement of the same.

 

Defects in the product may be due to

  • Manufacturing defect
  • Design defect
  • Faulty packing
  • Incorrect instructions as to the use of the product

 

The purpose of the product liability Insurance is to indemnify the manufacturer, distributor, wholesaler, and retailer against claims of any third-party bodily injury/ property damage resulting from the use or consumption of product manufactured, sold, distributed or handled.

 

In India there is no specific legislation that provides the complete legal framework for product liability claims. There are laws like The Sale of Goods Act 1930 and The Indian Contract Act 1872 besides The Consumer Protection Act 2019 that are relevant for product liability action. The discussion in this article is primarily focused on exposures from The Consumer Protection Act 2019.

 

Product liability insurance offers indemnity in respect of claims from third parties arising out of defects resulting in:

 

  • Personal Injury: Bodily injury (including death and illness), disability, shock, fright, mental anguish or mental injury.

(Relating to the caselaw in this area, of immediate recall value is the judgement of The Delhi High Court on 30 May 2019 directing Johnson and Johnson to pay Rs.25 lakh each to 67 patients in hip implant cases. Earlier, India’s drug regulatory authority had asked J&J to pay Rs.65 lakh and Rs.74 lakh as compensation to two unidentified patients in Maharashtra)

 

  • Property damage: Physical injury or destruction of tangible property including the loss of use thereof.

 

Product liability insurance policy provides indemnity to the insured in respect of:

  • Legal costs in defending proceedings brought against them alleging wrongful acts
  • Any damages awarded to the claimants including out of court settlements

 

 

Product Recall Expenses:

It is possible to cover product recall expenses under product liability policy as an extension or as a separate policy. This covers expenses associated with recalling a product from the market. A product recall is a request to return to the maker, a product or a batch of products usually over safety concerns or design defects or labelling errors that are likely to cause personal injury or property damage to a third party or damage reputation to the manufacturer.

 

Some of the Recalls in India in recent past are:

 

  • Honda Motorcycle recalls 50,000 units of four variants to inspect front brakes
  • Torrent Pharma recalls around 2.30 lakh bottles of high BP treatment tablets from US
  • FDA asks Nestle to recall Maggi noodles from stores

 

Product recall expenses mean the reasonable and necessary costs associated with recalling a product. Indicative list of expenses is given below:

  • Communications to notify such as radio and television announcements and printed advertisements;
  • Shipping cost from any purchaser, distributor or user to the place or places designated
  • Extra expense to rent additional warehouse or storage space
  • The cost to hire additional persons other than the regular employees to assist in the process.

 

As regards Recall of products, Consumer Protection Act 2019 Section 20 states as under:

 

Where the Central Authority is satisfied on the basis of investigation that there is sufficient evidence to show violation of consumer rights or unfair trade practice by a person, it may pass such order as may be necessary, including—

  1. recalling of goods or withdrawal of services which are dangerous, hazardous or unsafe;
  2. reimbursement of the prices of goods or services so recalled to purchasers of such goods or services; and
  3. discontinuation of practices which are unfair and prejudicial to consumers’ interest:

 

Provided that the Central Authority shall give the person an opportunity of being heard before passing an order under this section.

 

Similarly, BIS Act 2016, Drugs and Cosmetics act 1940 read with Medical Devices rules 2017 and Food Safety and Standards Act 2006 also provide for recall of goods.

 

Government mandated recalls are generally excluded under the policy. Even in situations where some coverage is available, it is a qualified and conditional cover.

 

Product liability policy can be also taken as a part of CGL (Commercial General Liability) which includes product liability, premises liability, operations liability and completed operations liability. International Risk Management Institute (IRMI) describes CGL as under:

 

A standard insurance policy issued to business organizations to protect them against liability claims for bodily injury (BI) and property damage (PD) arising out of premises, operations, products, and completed operations; and advertising and personal injury (PI) liability

 

The policy provides indemnity to the insured in respect of:

  • Legal costs in defending proceedings.
  • Any damages awarded to the claimants including out of court settlements

 

Professional Indemnity Insurance:

Professionals have a duty to offer reasonable skill and care, as part of the service they provide. If they fail to exercise this duty and are subsequently proven to be negligent and if any loss is caused, they may be liable for the losses incurred by their customers or other third party. No matter how good professionals are at their jobs or how good their attention is to detail, there is always the possibility for small mistakes to be made. Proving innocence may cost and it pays to be protected.

 

Professional indemnity (PI) insurance offers indemnification to professionals who provide advice or services to their customers against legal liabilities arising from acts, omissions or breaches in the course of discharge of their professional duties. In simple terms, this means that if a professional does something or omits to do something in the course of his/her work, and the principal suffers injury or financial loss as a result, professional indemnity insurance responds. This policy is also known as Errors& Omissions (E&O) Liability insurance policy. The policy provides indemnity to the insured in respect of:

 

  • Legal costs in defending proceedings brought against them alleging wrongful acts.
  • Any damages awarded to the claimants including out of court settlements

 

 Sections under CPA 2019, and Possible Insurance Cover

Major exposures emanating from the provisions of the Act and possible insurance covers are mapped here. Product liability is relevant for tangible products and professional indemnity cover is for services.

 

  1. Section 83: A product liability action may be brought by a complainant against a product manufacturer or a product service provider or a product seller, as the case may be, for any harm caused to him on account of a defective product.

 

Insurance Cover: Product liability/ Professional Indemnity

________________________________________________________________________

 

  1. Section 84 (1): A product manufacturer shall be liable in a product liability action, if—
  2. the product contains a manufacturing defect; or
  3. the product is defective in design; or
  4. there is a deviation from manufacturing specifications; or
  5. the product does not conform to the express warranty; or
  6. the product fails to contain adequate instructions of correct usage to prevent any harm or any warning regarding improper or incorrect usage.

 

Insurance Cover: Product liability / Product Guarantee

________________________________________________________________________

 

  1. Section 84 (2): A product manufacturer shall be liable in a product liability action even if he proves that he was not negligent or fraudulent in making the express warranty of a product.

 

Insurance Cover: Product Liability

________________________________________________________________________

 

  1. Section 85: A product service provider shall be liable in a product liability action, if:
    1. the service provided by him was faulty or imperfect or deficient or inadequate in quality, nature or manner of performance which is required to be provided by or under any law for the time being in force, or pursuant to any contract or otherwise; or
    2. there was an act of omission or commission or negligence or conscious withholding any information which caused harm; or
    3. the service provider did not issue adequate instructions or warnings to prevent any harm; or
    4. the service did not conform to express warranty or the terms and conditions of the contract.

 

Insurance Cover: Professional Indemnity

________________________________________________________________________

 

 

  1. Section 86: A product seller who is not a product manufacturer shall be liable in a product liability action, if:
    1. he has exercised substantial control over the designing, testing, manufacturing, packaging or labelling of a product that caused harm; or
    2. he has altered or modified the product and such alteration or modification was the substantial factor in causing the harm; or
    3. he has made an express warranty of a product independent of any express warranty made by a manufacturer and such product failed to conform to the express warranty made by the product seller which caused the harm; or
    4. the product has been sold by him and the identity of product manufacturer of such product is not known, or if known, the service of notice or process or warrant cannot be effected on him or he is not subject to the law which is in force in India or the order, if any, passed or to be passed cannot be enforced against him; or
    5. he failed to exercise reasonable care in assembling, inspecting or maintaining such product or he did not pass on the warnings or instructions of the product manufacturer regarding the dangers involved or proper usage of the product while selling such product and such failure was the proximate cause of the harm.

 

Insurance Cover: Product liability insurance with appropriate cover widening endorsements like Vendors liability clause, Technical Collaboration inclusion clause, Mixing and Blending clause etc.

________________________________________________________________________

 

  1. Endorser Liability – Section 21:
  • Where the Central Authority is satisfied after investigation that any advertisement is false or misleading and is prejudicial to the interest of any consumer or is in contravention of consumer rights, it may, by order, issue directions to the concerned trader or manufacturer or endorser or advertiser or publisher, as the case may be, to discontinue such advertisement or to modify the same in such manner and within such time as may be specified in that order.

 

  • Notwithstanding the order passed under sub-section (1), if the Central Authority is of the opinion that it is necessary to impose a penalty in respect of such false or misleading advertisement, by a manufacturer or an endorser, it may, by order, impose on manufacturer or endorser a penalty which may extend to ten lakh rupees: Provided that the Central Authority may, for every subsequent contravention by a manufacturer or endorser, impose a penalty, which may extend to fifty lakh rupees.

 

  • Notwithstanding any order under sub-sections (1) and (2), where the Central Authority deems it necessary, it may, by order, prohibit the endorser of a false or misleading advertisement from making endorsement of any product or service for a period which may extend to one year: Provided that the Central Authority may, for every subsequent contravention, prohibit such endorser from making endorsement in respect of any product or service for a period which may extend to three years.

 

  • ——

 

  • No endorser shall be liable to a penalty under sub-sections (2) and (3) if he has exercised due diligence to verify the veracity of the claims made in the advertisement regarding the product or service being endorsed by him. (This is a defence available under the Act itself)

 

Insurance Cover: CGL/ Combination of covers

______________________________________________________________________________

 

It is not that the product seller or product manufacturer is liable in all circumstances. The Act does list exceptions to product liability action under Section 87 providing the primary defence to them.

 

Insurance is not a remedy or solution for all exposures. Insurance is meant for unintentional errors and not for intentional, deliberate and dishonest acts. Insurance is for those aspects of negligence which creep in despite all the care and caution. Further, it must be noted that all insurance policies have exclusions which need to be reviewed carefully before purchasing any policy.

______________________________________________________________________________

 

P. Umesh

Consultant – Liability Insurance

p.umesh@liabilityinsurancepractice.com

www.liabilityinsurancepractice.com

 

Disclaimer: The information contained and ideas expressed in this article represent only a general overview of subjects covered. It is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Insurance buyers should consult their insurance and legal advisors regarding specific coverage and/or legal issues.

The post Guest Post: India: The Consumer Protection Act, 2019 – Exposures & Liability Insurance Protection appeared first on The D&O Diary.

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News Flash: Insurer That Paid Full Policy Limits Did not Breach the Policy or Act in Bad Faith

D&O insurance policyholders sometimes bridle when the insurers take steps to try to rein in burgeoning defense expense. In that situation, the D&O insurers will often try to remind the policyholder that because defense expense erodes the limit of liability, it is in everyone’s interest for defense expense to be monitored closely. An unusual coverage action in the Western District of New York reversed the usual concerns about insurer defense cost control. The policyholder sued its D&O insurer for breach of contract, bad faith, and intentional infliction of emotional distress not for failing to pay defense costs or full defense costs, but rather for allowing the policyholder’s defense expenses incurred in an underlying criminal action to exhaust the applicable limit of liability. While it is hardly a surprise that a court concluded that an insurer that paid out its full limits cannot be held liable for breach of contract – much less bad faith or infliction of emotional distress –there are still a number of interesting aspects to this dispute and to the court’s ruling.  

 

The court’s September 10, 2019 opinion can be found here. An October 4, 2019 post on the Wiley Rein law firm’s Executive Summary Blog can be found here.

 

Background

Marc Irwin Korn is the sole owner of Senior Associates LLC and a number of other businesses operating nursing homes in and around Buffalo, New York. In December 2011, Korn was indicted on several criminal charges, including wire fraud and making a false statement.

 

Korn submitted the criminal matter to the D&O insurer of Senior Associates. The insurer accepted the defense subject to a reservation of its rights under the policy. At that time and in several subsequent communications, the insurer reminded Korn that defense expense erodes the limit of liability.

 

After the prosecutors filed a superseding indictment against Korn adding several additional criminal charges, the insurer affirmed that it would continue to provide Korn with a defense. However because it was determined that the insurer’s regular panel counsel could not handle the criminal matter, the insurer agreed that a non-panel attorney would be retained to provide the defense. Korn requested the insurer’s assistance in obtaining criminal representation and recommended several criminal defense lawyers, noting again that defense costs would erode the limits of liability. Korn selected one of the law firm’s the insurer recommended.

 

The insurer made periodic payments to the defense counsel Korn selected. The insurer contended in the subsequent insurance coverage action that at the time of each payment, the insurer advised Korn of the amount remaining of the limits of liability available. An April 2015 defense expense payment exhausted the remaining limit of liability.

 

In December 2016, Korn filed an action against the insurer alleging breach of fiduciary duty, breach of contract, bad faith, and intentional infliction of emotional distress. The insurer filed a motion for summary judgment.

 

In November 2018, Korn ultimately resolved the criminal matter by pleading guilty to two criminal misdemeanors.

 

The September 10, 2019 Opinion

In a September 10, 2019 Opinion, Judge Christina Reiss, applying New York law, granted the insurer’s motion for summary judgment.

 

Korn’s had first claimed that the insurer had breached its fiduciary duty by its failure to monitor his criminal defense attorneys and failing to keep track of the legal fees. Judge Reiss rejected this claim, holding that New York does not recognize a fiduciary duty or vicarious liability based on the acts or omissions of outside counsel retained by an insurance company for its insured’s defense. While there are rare exceptions when a special relationship between the parties may give rise to a fiduciary duty, the court found that the circumstances justifying the exception were not present here, even if, as Korn alleged, the insurer had “brokered” the attorney client relationship.

 

Korn also alleged that the insurer had breached in the insurance contract by failing to insure that his defense in the underlying criminal action progressed at the proper rate. He also alleged that the insurer breach the insurance contract by failing to follow its own defense counsel guidelines. Finally, he alleged that the insurer breached the contract by adding attorneys and law firms to the defense without his approval.

 

Judge Reiss granted the insurer’s motion for summary judgment on all three of these issues, holding first that the plaintiff had failed to establish a contractual obligation under the policy to ensure a “reasonable rate of progression’ so as to avoid exhaustion of the policy limit. Similarly, Judge Reiss said that the plaintiff had identified no obligation in the policy requiring the insurer to follow its own guidelines for Korn’s benefit. Moreover, Judge Reiss added, even if Korn could establish such an obligation, he had failed to proffer any evidence that it had been breached.

 

Judge Reiss also granted the insurer’s motion for summary judgment on the breach of contract allegation relating to the staffing of the defense. Plaintiff had argued that the insurer had breached the contract by allowing three firms to bill time on the defense – although he did also admit that he did request that additional legal personnel outside of the selected law firm be added to his legal team. Judge Reiss noted that the policy gave the insurer the “sole right and duty to select counsel for the defense, and so it is “immaterial” whether the insurer or Korn or both participated in the staffing of Korn’s criminal defense.

 

Finally, Judge Reiss rejected Korn’s bad faith and emotional distress claims. Judge Reiss said that the plaintiff had failed to establish any legal duty separate from the insurer’s duties under the contract, adding that in any event Korn had failed to proffer any evidence that the insurer had failed to act in good faith. In rejecting the emotional distress claim, Judge Reiss noted that under New York law, emotion distress generally is not compensable in a breach of contract, and that no legal duty independent of the contract had been established.

 

Discussion

As someone who spends far too much of my time wrestling with insurers trying to get them to step up and pay their policyholders’ defense expense, it is somewhat startling to see a policyholder claiming that an insurer breached its policy and acted in bad faith by paying its full out its policy limit in defense. And not just in defense, but in defense of a criminal matter.

 

The underlying facts certainly do underscore the fact that because the payment of defense expense erodes the limit of liability that it is in both the policyholder’s interest and the insurer’s interest for defense expense to be controlled However, the issue of defense cost control usually comes up in a far different context, usually where the policyholder (or the policyholder’s counsel) argues that the insurer’s efforts to control defense expense are undermining the defense of the claim or represents bad faith.

 

So it is quite ironic that in this case that policyholder alleged that the insurer’s failure to control defense expenses breached the contract – indeed, not only breached the contract but constituted bad faith and inflicted emotional distress on the policyholder. Usually it is the other way around, the policyholder is alleging that it is the attempt to control defense costs or to make defense counsel adhere to counsel guidelines that is a breach of the contract or represents bad faith.

 

While one important underlying message of this case is the mutual interest of the policyholder and the insurer in managing defense, there is another important lesson — which is that the enormous expense that the defense of a serious claim can entail is an important consideration to be taken into account when the time comes for the policyholder to decide how much insurance they want to buy. For anyone who has never been involved in a serious D&O claim, it can be hard to imagine how fast defense expenses can mount.

 

All too often, D&O insurance buyers decide to buy the minimum amount of insurance; as this case shows, minimal amounts of insurance may be insufficient to protect a policyholder in the event of a serious claim (in this case, the policy’s limit of liability was $ 1million). Many insurance buyers do not want to hear that if they want to be fully protected against a serious claim, they need to buy additional limits of liability; a frequent perception is that an insurance advisor’s plea that the policyholder consider buying additional limits is nothing more than an incentivized actor’s bid to try and sell more insurance. As this case demonstrates, additional limits of liability could prove indispensable in the event of a serious claim.

 

The post News Flash: Insurer That Paid Full Policy Limits Did not Breach the Policy or Act in Bad Faith appeared first on The D&O Diary.

News Flash: Insurer That Paid Full Policy Limits Did not Breach the Policy or Act in Bad Faith syndicated from https://888migrationservicesau.wordpress.com