Representative Matters: Insurance Coverage
Insurers have sought the Firm's counsel on several complex claims involving over $500+ million of potential client exposure, and on dozens of cases potentially involving $20 - $100 million of potential client exposure. To date, these high-stakes matters have consistently been resolved in the client’s favor.
An insured bottle manufacturer was denied coverage by its general liability insurer for a suit by a cosmetic company for losses sustained due to defective bottles supplied by the insured. The Firm prepared correspondence responding to the insurer's denial letter than explained why the insurer's denial based on an alleged lack of property damage and on the application of the "Damage to Your Product Exclusion" were wrong. The insurer promptly withdrew its denial and paid the insured's defense fees and indemnity for the claim.
In a title insurance case, the client insurance company faced potential exposure of $1.5 million. The insured's suit for damages was based on the difference between offers it received on an undeveloped parcel – the higher offer was received before and the lower one after a covenant was discovered that prohibited for five years the operation of a hotel on the land. The Firm obtained an appraisal, and based on the appraisal denied coverage for lack of damage to the insured. The claim settled without litigation for less than $100,000.
A furniture manufacturing company's president and principal owner was initially denied coverage for a lawsuit alleging the loss of an employee's limb in a drill press accident. After the Firm prepared one letter to the company's workers' compensation insurance carrier, the insurer gave up its argument that the loss was an uncovered claim under the applicable statute, and the Firm obtained coverage for the president under the policy.
In a number of cases involving insured lenders seeking reimbursement for mechanics' liens under their lenders' title policies, with the mechanics' liens ranging from a few hundred thousand to several million dollars, the Firm's recommendation to deny coverage was followed and the lenders accepted the basis of denial that we explained in the letters we sent to them.
For a title policy issued for a property located in Mexico, the client insurance company faced liability for a missed reservation in a grant of a parcel. The Firm recommended that coverage be denied on the basis that the insured owner settled the claim without the insurer's consent. The claim was denied, and to avoid the uncertainties and costs of litigating a claim in Mexico, the Firm filed a declaratory relief action in California that resulted, before an answer was filed, in the $500,000 claim being settled for $5,000.
In several title insurance cases, the Firm determined that the title agents were at fault and that their negligence caused the loss under the title policies. By preparing appropriate demand letters to the agents, the Firm, without filing suit, obtained payment of the limits of the agents' E&O policies.