Welcome to the Cavalcade of Risk. This is the 138th time that the Cavalcade of Risk has gathered blog postings from around the web on topics relating to risk.
The submissions to this Cavalcade were across-the-board thoughtful and informative. I've put them in order from the most general risk (for example, world-wide collapse) to most personal risk (for example, your own insurance rates going up).
The global risk of too much investment diversification:
Jason Shafrin goes against conventional wisdom and argues that on the large scale investment diversification increases risk: When does diversification Increase Risk posted at Healthcare Economist.
The risk from too few women in power at insurance companies and elsewhere:
At Risk Management Monitor, Morgan O'Rourke presents an excerpt of an interview with Bermuda Premier Paula A. Cox, Bermuda Premier Paula A. Cox on the Lack of Women Leaders in insurance and government. Although the article does not address insurance issues per se, it contains a link to a more comprehensive piece in which Cox talks about Bermuda's efforts to retain captive and reinsurance business and the effect of the many recent natural catastrophes on Bermuda's insurance industry.
The risk from insurers failing to recognize improvements in healthcare technology:
Jaan Sidorov at Disease Management Care Blog writes about "Software Eating the World of Healtcare." He reflects on the implications of a software-based health care world. It sounds pretty good to me.
The risk to disability and other insurers from failing to recognize changes in demographics:
Russell Hutchinson presents Insuring Older Lives: It's about employment, pricing, and claims management posted at Chatswood Consulting Moneyblog.
Hutchinson considers the termination age of 65 for a number of insurance benefits to be too young in the light of continuous improvements in mortality and an increasing number of people working past age 65. He considers other ways insurers could design the product termination.
The risks that have caused rising worker's comp insurance rates and what business owners can do to keep their own rates down:
Nancy Germond has a comprehensive post on why worker's comp rates are rising, and how business-owners can keep their costs down: Are work comp costs eating your lunch? posted At Risk Management for the 21st Century.
The risk to mental health workers of inadequate workplace protections:
Julie Ferguson presents Inadequate: Protections for mental health workers posted at Workers' Comp Insider.
The risk of your auto insurance premiums increasing as a result of accidents that may or may not be your fault.
On Dough Roller there's a very informative post on How Do Points Affect Your Auto Insurance Rate? The article points out the wide variation from one state to another about how both at-fault and not-at-fault accidents can hike your rates.
The risk of assuming you don't have insurance coverage
Free Money Finance posts Your Insurance May Cover More than You Think It Does. The moral of this post: Don't assume your insurance doesn't cover a specific loss. If the cost is high enough, it's worth asking if the company will pay.
The risk of having a really bad day
And, finally, ending with a smile, my favorite post of this Cavalcade: Henry Stern, LUTCF, CBC presents Why you need disability insurance posted at InsureBlog.
The next Cavalcade of Risk will be hosted by Emily Holbrook at Risk Management Monitor.
Wednesday, August 24, 2011
Tuesday, August 16, 2011
For all you civil procedure buffs . . .
Greg Straughn filed a lawsuit alleging that he was injured in a construction site accident while employed by James Czech because the general contractor, Williams Building Company, failed to maintain safe conditions.
Western World Insurance Company had issued a general liability policy to Czech under which Williams was an additional insured. It sought a declaratory judgment that it had no duty to defend or indemnify Williams because Czech had stated on his policy application that he had no employees. Williams filed a counterclaim seeking a declaration that Western World is obligated to defend it.
Czech did not answer the declaratory judgment complaint and was defaulted. Western World moved to dismiss Williams' counterclaim on the ground that the default judgment established that Czech's misrepresentation on his application caused the policy to be rescinded.
Williams opposed the motion on the grounds that the default judgment was improperly entered by the clerk rather than the court, and that the default judgment is interlocutory in nature.
In Western World Ins. Co. v. Czech, __ F.R.D. __, 2011 WL 2460934 (D. Mass.), the court held that a motion for declaratory judgment on the issues of defense and indemnity under an insurance policy are not for a "sum certain," and therefore the clerk was not empowered to enter the default judgment. It also held that in a multi-defendant case a court should withhold granting a default judgment against one defendant until a decision is reached on the merits against the remaining defendants.
Western World Insurance Company had issued a general liability policy to Czech under which Williams was an additional insured. It sought a declaratory judgment that it had no duty to defend or indemnify Williams because Czech had stated on his policy application that he had no employees. Williams filed a counterclaim seeking a declaration that Western World is obligated to defend it.
Czech did not answer the declaratory judgment complaint and was defaulted. Western World moved to dismiss Williams' counterclaim on the ground that the default judgment established that Czech's misrepresentation on his application caused the policy to be rescinded.
Williams opposed the motion on the grounds that the default judgment was improperly entered by the clerk rather than the court, and that the default judgment is interlocutory in nature.
In Western World Ins. Co. v. Czech, __ F.R.D. __, 2011 WL 2460934 (D. Mass.), the court held that a motion for declaratory judgment on the issues of defense and indemnity under an insurance policy are not for a "sum certain," and therefore the clerk was not empowered to enter the default judgment. It also held that in a multi-defendant case a court should withhold granting a default judgment against one defendant until a decision is reached on the merits against the remaining defendants.
Saturday, July 30, 2011
Monday, July 25, 2011
US District Court holds that due process claims regarding tax lien "arose from" prior litigation regarding the lien
In my last post I wrote about Saugus v. Zurich Am. Ins. Co., __ F.2d __, 2011 WL 2311873 (D. Mass.),in which the town of Saugus sought insurance coverage for claims that it had wrongfully demolished a house after a fire and collected costs associated with the demolition.
In addition to the Zurich policy discussed in the last post, the town had also been issued a claims-based policy by Maryland Casualty. That policy contained an exclusion for claims "arising from all pending or prior litigation as of the policy effective date and all future claims arising from such litigation." Maryland asserted that the exclusion applied because the underlying plaintiffs had sought relief from the Board of Assessors, the Appellate Tax Board and the Massachusetts Appeals Court on matters relating to the costs of demolition.
The town argued that due process claims alleged by the underlying plaintiffs under §1983 were different from and unrelated to the prior litigation involving tax abatement. The underlying plaintiffs alleged that the town demolished the remains of the property without proper notice, imposed an illegal lien on the property, added non-existent debt to the real estate tax bill, forced them to pay an illegal special assessment, and refused to return the special assessment.
The United States District Court held that the § 1983 claims 'arose from" the prior litigation, so that the exclusion applied.
In addition to the Zurich policy discussed in the last post, the town had also been issued a claims-based policy by Maryland Casualty. That policy contained an exclusion for claims "arising from all pending or prior litigation as of the policy effective date and all future claims arising from such litigation." Maryland asserted that the exclusion applied because the underlying plaintiffs had sought relief from the Board of Assessors, the Appellate Tax Board and the Massachusetts Appeals Court on matters relating to the costs of demolition.
The town argued that due process claims alleged by the underlying plaintiffs under §1983 were different from and unrelated to the prior litigation involving tax abatement. The underlying plaintiffs alleged that the town demolished the remains of the property without proper notice, imposed an illegal lien on the property, added non-existent debt to the real estate tax bill, forced them to pay an illegal special assessment, and refused to return the special assessment.
The United States District Court held that the § 1983 claims 'arose from" the prior litigation, so that the exclusion applied.
Thursday, July 21, 2011
US District Court holds that continuing violation of rights occurred at the time of the original violation
In 2006, a house owned by the underlying plaintiffs was damaged by a fire. They later filed a complaint against the town of Saugus alleging that the town unlawfully demolished the house and in 2007 illegally collected costs associated with the demolition. The town sought coverage for the claim from Zurich Casualty, who denied any duty to defend.
The Zurich policy was an occurrence policy in effect from July 1, 2009 to July 1, 2010. The town argued that there was a claim of an independent due process violation (failure to abate the costs paid by the underlying plaintiffs to the town).
In Saugus v. Zurich Am. Ins. Co., __ F.2d __, 2011 WL 2311873 (D. Mass.), the United States District Court for the District of Massachusetts held that the occurrence was the actions of the town shortly after the fire, and continuing claims arising out of that occurrence did not affect the date of the occurrence. (I would have to give some thought to how that fits into a triggers of coverage analysis.) It also held that the claims were a known loss when the policy period began.
The Zurich policy was an occurrence policy in effect from July 1, 2009 to July 1, 2010. The town argued that there was a claim of an independent due process violation (failure to abate the costs paid by the underlying plaintiffs to the town).
In Saugus v. Zurich Am. Ins. Co., __ F.2d __, 2011 WL 2311873 (D. Mass.), the United States District Court for the District of Massachusetts held that the occurrence was the actions of the town shortly after the fire, and continuing claims arising out of that occurrence did not affect the date of the occurrence. (I would have to give some thought to how that fits into a triggers of coverage analysis.) It also held that the claims were a known loss when the policy period began.
Wednesday, July 6, 2011
Appeals Court holds that 93A claim can proceed after insurer rectifies failure to pay PIP damages
Marie Chery was injured in a car accident while she was a passenger in a car insured by Metropolitan. She submitted her PIP claim to Met, which failed to pay the medical bills within the time prescribed by Mass. Gen. Laws ch. 90 § 34M. Chery then sued for breach of the statute and Mass. Gen. Laws ch. 93A.
Six months later Met paid the medical bills. It then moved for summary judgment on the ground that an insured cannot prevail on a PIP claim if the disputed amount is paid prior to judgment entering; and that the 93A claim should be dismissed because Chery suffered no damages.
Chery did not dispute the first assertion. (See my post on that issue here.) She argued that Met had not paid a bill she submitted after she filed the complaint. That argument was ineffective because she had never amended the complaint to include reference to that bill.
In Chery v. Metropolitan Prop. & Cas. Ins. Co., 79 Mass. App. Ct. 697 (2011), the Massachusetts Appeals Court held that her 93A claim could survive summary judgment. It held that Metropolitan has caused her injury by failing to settle her claim after its liability was reasonably clear and forcing her to bring suit to receive benefits to which she was entitled.
The court also found support in the record for the claim that Chery had suffered emotional distress from having to prosecute the lawsuit and concern for the effect the unpaid bills would have on her credit.
Six months later Met paid the medical bills. It then moved for summary judgment on the ground that an insured cannot prevail on a PIP claim if the disputed amount is paid prior to judgment entering; and that the 93A claim should be dismissed because Chery suffered no damages.
Chery did not dispute the first assertion. (See my post on that issue here.) She argued that Met had not paid a bill she submitted after she filed the complaint. That argument was ineffective because she had never amended the complaint to include reference to that bill.
In Chery v. Metropolitan Prop. & Cas. Ins. Co., 79 Mass. App. Ct. 697 (2011), the Massachusetts Appeals Court held that her 93A claim could survive summary judgment. It held that Metropolitan has caused her injury by failing to settle her claim after its liability was reasonably clear and forcing her to bring suit to receive benefits to which she was entitled.
The court also found support in the record for the claim that Chery had suffered emotional distress from having to prosecute the lawsuit and concern for the effect the unpaid bills would have on her credit.
Labels:
93A,
93A injury,
PIP
Friday, July 1, 2011
Risks of car-sharing
Hank Stern at InsureBlog has posted on the risks to car-owners who sign up with car-sharing companies, which coordinate the very short-term rental of private individuals' cars to local people who need to, say, make a grocery run. (These companies should not be confused with Zipcar, which rents out its own cars.)
I strongly agree with Hank's basic point, which is that you should be cautious about insurance issues before signing up with a car-sharing company, because there may be no coverage under your policy if the car is involved in an accident while rented out.
Hank points out that one car-sharing company states that it provides liability coverage to renters, and therefore presumably not to the owners. If he's right then the car-sharing company has demonstrated a shocking lack of judgment, and no one should sign up with it. It is not worth the risk.
I strongly agree with Hank's basic point, which is that you should be cautious about insurance issues before signing up with a car-sharing company, because there may be no coverage under your policy if the car is involved in an accident while rented out.
Hank points out that one car-sharing company states that it provides liability coverage to renters, and therefore presumably not to the owners. If he's right then the car-sharing company has demonstrated a shocking lack of judgment, and no one should sign up with it. It is not worth the risk.
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