Thursday, December 17, 2020

Massachusetts legislature votes down bill that would have provided retroactive insurance coverage for business losses from the pandemic


As I discussed here, the Massachusetts legislature had been considering a bill creating retroactive insurance coverage for business income losses due to the pandemic, with losses adjusted by insurers and paid by the commonwealth.  The Massachusetts Senate has voted against the bill.  



Wednesday, November 11, 2020

Invitation to Insurance Library Lunch & Learn on December 17 where I'll be presenting: The Good Faith, The Bad Faith, and the Ugly


The Insurance Library in Boston is a phenomenal resource for anyone who ever needs a deeper understanding of any insurance issue from commonplace to obscure.  From educational programs to absolutely top-notch reference librarians to insurance-related social events like a screening of Double Indemnity to an opportunity (in non-pandemic times, at least) to just soak in the historical insurance artifacts, maps, policies, and books available at the library, this institution is a gem for the insurance cognoscenti and wannabes alike.  

I am thrilled to be presenting a Zoom Lunch & Learn for the Library on insurance bad faith issues, "The Good Faith, the Bad Faith and the Ugly," on December 17, 2020 from 12:30 to 1:30.

You can register for the Lunch & Learn here.

Here's a full description:

The Good Faith, the Bad Faith, and the Ugly! 
About this Event 
The requirement that insurance companies act in good faith with respect to policyholders and claimants--codified in Massachusetts in Chapters 93A and 176D of the Massachusetts General Laws--can raise issues that are nuanced and complex. Veteran lawyer Nina Kallen, a specialist in insurance coverage and bad faith cases, will lead a discussion covering such topics as how an insurer should respond to a demand for coverage when coverage is questionable, or a demand for settlement when liability or damages are unclear and what are common pitfalls in responding to a 93A demand letter. 
How do I attend the event? 
The Library will send you a link to the Zoom login prior to the event. 
Do I have to have video? 
We think video will make the event feel more like an in-person gathering, so we are encouraging people to share video. We plan to record the event and make it available to members who are unable to attend the live event. We will also take screen shots during the event and may use them on our website and in social media posts after the event. 
If I can’t attend the event in real time, can I still submit a question I might have? 
Attendees appreciate the organic discussion that occurs during our virtual events. If you have a question you’d like addressed but you are unable to make it to the live meeting, please send it in advance and we will do our best to ask your question for you, email: 
How can I contact the organizer with any questions? 
Email Sarah Hart at:


Monday, November 9, 2020

A plea to insurance defense firms to do better on diversity

I recently put together a panel on Insurance Issues for New Insurance Defense Attorneys for the Boston Bar Association's subcommittee on Insurance Law.  I was thrilled to find panelists who were knowledgeable and engaging.  In light of a commitment I have made to look for opportunities to amplify voices of people of color, I had hoped to find an additional panelist who was an attorney of color at an insurance defense firm interested in an opportunity to educate newer associates.

I reached out to affinity groups at bar associations, senior partners at insurance defense firms, and more general networking groups.  A couple of names popped up -- the same names over and over again.  I reached out to those people and did not hear back, I can only assume because they are so overwhelmed with people who want them to add diversity to panels and the like that they simply can't respond to all the offers.

This situation is a shame.  Early in my career I was lucky enough to work for two excellent insurance defense firms.  Racial diversity among the attorneys was virtually non-existent -- but that was a long time ago.  I am disheartened that the situation does not appear to have changed.

Here's the thing:  insurance defense is a fantastic start to a practice in civil litigation.  Associates can expect to be arguing in court within a few weeks of starting out and to take depositions within a few more weeks.  Trial work (increasingly hard to come by in civil practice) follows.  I had oral argument in the US Court of Appeals as a second year associate.  Big firms don't offer these opportunities.  Many plaintiffs' side firms spend a large percentage of their time on pre-litigation activities.  I constantly recommend to law students and young attorneys that they consider insurance defense firms.  

The hiring partners at insurance defense firms should be actively recruiting, and making a plan to hire, young associates who are people of color.  It's good for a firm that represents diverse people (anyone who gets sued after a car accident will have an insurance defense firm representing them) to have a diverse staff.  It's good for the profession to provide excellent litigation opportunities to everyone.  And, in this day and age (in every day and age), it's just the right thing to do. 


Friday, October 2, 2020

Invitation to a panel I'm moderating on Insurance Issues for New Insurance Defense Attorneys

The Boston Bar Association's Insurance Subcommittee (which I co-chair) is hosting a panel on Wednesday, October 7, 2020 at 10 AM on Insurance Issues for New Insurance Defense Attorneys.  You can register here

Here's the blurb:

New insurance defense associates quickly learn how to evaluate liability and damages in claims against the defendants they represent. But the insurance company is also their client. Associates need to understand the implications of this “tripartite relationship” and how it affects their representation. This webinar will cover the basics, including:

·        The difference between the duty to defend and the duty to indemnify.

·        How an attorney should handle a case that the insurer is defending under a “reservation of rights.”

·        The attorney’s duty to both the insured and the insurer, and conflicts of interest that may arise.

·        The responsibility of the insurer (and insurance defense counsel) to protect the interests of the insured, and how that plays out in defending a case and negotiating settlement.

This webinar is intended for attorneys who have been working as insurance defense associates for 0 to 4 years, but is also a refresher for more experienced attorneys. 


TanyaT. Austin of Boyle / Shaughnessy Law 

Alexis P. Theriault of Conn Kavanaugh Rosenthal Peisch & Ford, LLP

And I'll be moderating.  

Friday, September 4, 2020

Massachusetts Superior Court holds that insurance broker has limited liability to insured

Strega Realty Trust, which was operated by Linda Cappuccio, rented property in Salem to Red Lulu Salem for the purpose of Red Lulu operating a restaurant there.  However, Red Lulu never opened the restaurant.  In 2012 Strega Realty sued Red Lulu.  That lawsuit settled, with the provision that Red Lulu would vacate the premises by October 31, 2013. 

Red Lulu’s proprietors vandalized the property around the time that they vacated the premises.  Cappuccio informed Raymond Kameras, the president of its insurance brokerage, Allan Insurance. 

Cappuccio and Kameras discussed filing an insurance claim to recover the damage.  They now dispute whether Kameras suggested filing a claim with both Strega Realty’s own policy and with Selective Insurance, Red Lulu’s policy, but  Cappuccio notified only Selective.  Selective denied coverage because its policy excluded coverage for vandalism committed by its insured. 

On November 6, 2015, Cappuccio submitted a claim for the property damage to Public Service.  Public Service issued a reservation of rights letter asserting that Cappuccio had failed to notify the company of the loss within two years.  The policy also had a vandalism exclusion. 

Cappuccio then sued both Public Service and Allan Insurance.  In  Cappuccio v. Public Service Ins. Co., 2020 WL 4581672 (Mass. Super.), the Essex County Superior Court granted both defendants' motionis for summary judgment. 


Allan Insurance Company’s motion for summary judgment

                Insurance broker had no duty to secure specific coverage

The court noted that generally an insurance broker is not under a duty to secure a policy that includes adequate coverage for the insured’s needs – but there are circumstances that might create such a duty.  Such circumstances can include a prolonged business relationship, frequent contact between the broker and the insured, and a broker’s advice with respect to the complexity of the policies.  The court held that no special circumstances existed between Cappuccio and Allan Insurance.  They had a new business relationship, there were no complex issues with respect to the coverage she wanted to purchase, and they did not have an in-depth discussion.  Cappuccio told Allan Insurance she wanted to renew her policy, and Allan Insurance did so. 

Cappuccio pointed to statements on Allan Insurance’s website setting forth that its agents were experts and would provide the best policy to fit the customer’s individual needs.  The court held that Cappuccio had offered no evidence that she relied on such statements or was even aware of them. 

The court also held that Cappuccio had offered no evidence of breach of duty.  She did not establish that Allan Insurance could have secured a policy for her that would have covered acts of vandalism by a tenant.               

No damage from failing to advise Cappuccio to file claim with Public Service, because coverage was excluded by the vandalism exclusion

The court also granted summary judgment to Allan Insurance on the claim that it negligently advised Cappuccio not to file her claim with Public Service when she discovered the vandalism.  Allan Insurance denied giving such advice, but argued that even if it had there was no harm because the policy excluded criminal acts by anyone to whom the insured entrusted its property.  The court held that that exclusion unambiguously applied to vandalism by a tenant even after eviction proceedings had begun.

 Public Service’s motion for summary judgment: Notification to broker is not notification to insurer

Cappuccio alleged that Public Service failed to resolve her claim for roughly 3 ½ years after she notified Allan Insurance of the loss, a delay which constituted a bad faith settlement practice. 

Public Service argued that Cappuccio’s notification to Allan Insurance was not a notification to Public Service, and that it was not notified of the loss until more than two years after the occurrence.  The court agreed that notification to the insurance broker did not constitute notification to the insurer, as the undisputed facts showed that Allan Insurance was not an agent of Public Service. 


                Short limitations period for first-party property damage claims

This case highlights a trap for the unwary: almost all Massachusetts insurance policies have a two year contractual limitations period for first-party property damage claims (a claim filed by the policyholder against its own insurer, not against a tortfeasor or tortfeasor’s insurer).  This limitations period applies to homeowners' policies as well as general liability policies.  Although not made clear by the decision, this is not the time limit for bringing a claim to the attention of the insurance company; it is the period by which a lawsuit against the insurer for breach of the policy must be filed in court.  Unlike with a bad faith settlement practices claim under Mass. Gen. Laws chs. 93A and 176D, the time does not begin running on the date that the policyholder should reasonably know that the insurance company is not adequately adjusting the claim; it begins on the date of loss. This is obviously significantly shorter than the six year statute of limitations that applies to most breach of contract claims. 

Property policies have other quirky provisions, such as the requirement of a reference proceeding – a type of arbitration – for disputes over the amount of loss.  I would advise anyone who has a property damage claim against their own insurer to speak with an attorney who really understands the nitty-gritty of these policies. 

                     Limited duty of insurance broker 

Another issue highlighted by this case is that an insurance broker does not have a general duty to secure a policy that includes, as the court put it,  adequate coverage for the insured’s needs.  That seems counterintuitive – you expect your broker to help you get the policy that you need.  But most policies have standard language and, as the court pointed out, an insurer is unlikely to be willing to negotiate over whether or not a relatively low value policy will include a vandalism exclusion. 

There can, however, be special circumstances when the insurance broker’s duty is expanded.  Those circumstances include a prolonged business relationship with the client, frequent contact between the client and the agent, and when a client relies on the advice of the agent because of the complexity of the policy.  Essentially, as you move into a  higher value policy there is more negotiation between the policyholder (through the broker or a risk management company, generally) and the insurer.