Monday, March 11, 2013
Tuesday, March 5, 2013
A genuinely interesting newsletter on insurance coverage issues
Thursday, February 28, 2013
School permission slips should not have waivers of liability
As regular readers of this blog know, requiring parents to sign releases of liability for their children to participate in activities is a pet peeve of mine. To be clear, I have no problem with a limited waiver with respect to a slightly dangerous activity itself. For example, if my child is doing a gymnastics program signing a waiver releasing liability if the child falls off a balance beam is fine. But signing a waiver releasing liability if a balance beam falls on a child is another matter altogether.
The Boston Public Schools require parents to sign comprehensive waivers of liability in order for their children to participate in field trips. Last night I testified at the open portion of the Boston School Committee meeting to urge that the waiver requirement be removed. The following is the written information I gave to the School Committee members to accompany my testimony (somewhat redacted to protect the privacy of my children):
In the release, parents agree
“to indemnify and hold harmless BPS and any of the individuals and other
organizations associated with the BPS in this field trip from any claim or
liability arising out of my child’s participation in this field trip.”
The Boston Public Schools require parents to sign comprehensive waivers of liability in order for their children to participate in field trips. Last night I testified at the open portion of the Boston School Committee meeting to urge that the waiver requirement be removed. The following is the written information I gave to the School Committee members to accompany my testimony (somewhat redacted to protect the privacy of my children):
RELEASES OF LIABILITY IN FIELD TRIP PERMISSION SLIPS
THE ISSUE: Boston public
school permission slips require parents to sign a release of all rights if their
child is injured on a field trip.
The release includes “any
acts of negligence or otherwise from the moment that my student is under BPS
supervision and throughout the duration of the trip.”
THE LANGUAGE IN THE FIELD
TRIP PERMISSION SLIP (FROM SUPERINTENDANT’S
CIRCULARS #CAO-23 and 24, 2012-2013) (attached):
I assume full responsibility for any risk of personal
or property damages arising out of or related to my/my child’s participation in
this field trip, including any acts of negligence or otherwise from the moment
that my student is under BPS supervision and throughout the duration of the
trip. I further agree to indemnify and to hold harmless BPS and any of the
individuals and other organizations associated with BPS in this field trip from
any claim or liability arising out of my/my child’s participation in this field
trip.
WHY THIS IS A PROBLEM:
If a child is injured as a
result of negligence (unreasonable carelessness) of the BPS or one of its
partners, the child should be entitled to the same recovery under our legal
system that he or she would be entitled to if injured any place else.
Example 1: If a bus driver falls asleep at the wheel and
the bus hits a student standing on a sidewalk, that student is entitled to
recover his or her fair damages from the bus company and its insurer. But if a bus driver falls asleep at the wheel
and students who are on the bus for a field trip are injured, they are not
entitled to recover any damages because their parents signed the release of
liability.
Example 2: If a
student slips on ice on steps leading to a school building and is injured,
whether or not he or she can recover damages will depend on whether the ice was
on the steps as a result of negligence (unreasonable carelessness). But if a student slips on ice on steps
leading to a building at a camp the student is attending for a field trip, there
is no recovery even if the ice was there because of the negligence of the
camp.
THE SOLUTION:
Rather than requiring that
parents sign a release, the BPS should require that its partners have adequate
insurance to cover injuries caused by negligence.
I have spoken with BPS field
trip partners who have adequate insurance and who do not agree with the release
requirement.
ACTIONS TO DATE
I have raised this issue with
the BPS legal department. Tim Nicolette,
chief of staff of the superintendent’s office, responded to me with a telephone
call, in which Doug Heim of the legal department and Bethany Wood (Director of
Global Education; BPS staffer in charge of permission slips) also participated. Tim Nicolette stated that, after research, he
will not recommend that the release be deleted from the permission slip
forms. He gave the following reasons:
1. Releases of liability are legal; do not release liability for
gross negligence; and some other school systems use them.
Response: Those facts
are irrelevant. This is not a legal
issue; it is a moral one. It is
impossible to prevent all accidents.
When the BPS is entrusted with children, in addition to using its best
efforts to prevent negligent accidents, it needs to act responsibly in the
event that an accident happens. That
means allowing injured students the same recourse that any other person would
have if they are injured as a result of negligence.
I researched permission slips
used in other school systems. Many
contain no release of liability.
(Permission slips from Brockton and Chicago are attached.) New York City uses a very limited release,
which says “I agree and understand that I am responsible for the actions of my
child. I release the school from all
claims and liability that arise in connection with the trip, except if due to
the negligence of school officials.”
(Attached.)
Even if many other school
systems did use comprehensive releases, it should not matter. Boston should take a leadership role on this
issue and do the right thing.
2. Children
of parents who do not want to sign the release can opt out of field trips with
no effect on their grades.
Response: That position is unreasonable. It gives different rights to children of
parents who can read and understand the legal ramifications of the release than
to children of parents who cannot do so.
Moreover, field trips are an integral part of school curriculums and it
is unfair to require families to give up basic legal rights in order to
participate in field trips.
3. The
release protects the BPS (through the indemnity provision) if a student on a
field trip injures a third party.
Response: The BPS should not seek to “pass the buck” on a claim
of negligent supervision. Moreover, this
provision is wholly ineffective with respect to a claim by a third party unless
the student’s family happens to be rich or have other resources. It makes much more sense for the BPS to have
insurance or self-insurance.
CONCLUSION
The release of liability
should be removed from field trip permission slips. Instead, the BPS should require that its
partners have adequate insurance to protect students in the event that they are
injured as a result of negligence.
REQUEST FOR RESPONSE
I request that the school
committee get back to me with a response by Wednesday, March 13, 2013.
ABOUT ME
I am a lawyer who specializes
in liability insurance issues (“insurance coverage”). As such, I spend a lot of time thinking about
the purposes served by insurance, about
how risk should be reasonably delegated, and about the devastating impact on
individuals and families when risk is not delegated reasonably.
Tuesday, February 26, 2013
U.S. District Court holds that exclusion for loss involving a particular loan excludes coverage for claims that the loan was misappropriated
Marcia and Joseph Valenti donated $500,000 to the Clark School for Creative Learning. They later sued the school and Jeffrey Clark, the school's director, alleging that the school had not carried through with promises made by Clark in order to induce their gift. Specifically, they alleged that Clark promised to convey to them as security for the gift a security interest in a parcel of real property on which the school is situated, but that the school never acquired rights to the land; and that the funds would be used to develop a new facility for the school's high school, but that Clark conveyed a large portion of the funds to his mother and sister, purportedly as repayment for loans to the school.
The school's insurer, Philadelphia Indemnity Insurance Company, denied coverage on the ground that the allegations of the complaint fell within the policy's exclusion for known circumstances revealed in financial statement. The exclusion excluded claims "arising out of, directly or indirectly resulting from or in consequence of, or in any way involving" any circumstances disclosed in a financial statement that was attached to the policy. That financial statement stated that the school was the recipient of a major unrestricted gift totaling $500,000.
In Clark School for Creative Learning, Inc. v. Philadelphia Indemnity Ins. Co., 2012 WL 6771835 (D. Mass.), the United States District Court for the District of Massachusetts held that the claims were excluded. The court discretely analyzed the phrases "arising out of," "directly or indirectly resulting from or in consequence of," and "in any way involving," and held that under any of the phrases the exclusion applied.
The school's insurer, Philadelphia Indemnity Insurance Company, denied coverage on the ground that the allegations of the complaint fell within the policy's exclusion for known circumstances revealed in financial statement. The exclusion excluded claims "arising out of, directly or indirectly resulting from or in consequence of, or in any way involving" any circumstances disclosed in a financial statement that was attached to the policy. That financial statement stated that the school was the recipient of a major unrestricted gift totaling $500,000.
In Clark School for Creative Learning, Inc. v. Philadelphia Indemnity Ins. Co., 2012 WL 6771835 (D. Mass.), the United States District Court for the District of Massachusetts held that the claims were excluded. The court discretely analyzed the phrases "arising out of," "directly or indirectly resulting from or in consequence of," and "in any way involving," and held that under any of the phrases the exclusion applied.
Tuesday, February 19, 2013
Summary judgment to insurer reversed in Betty Anne Waters civil lawsuit
The story of how Betty Anne Waters obtained a GED, a college degree, and a law license all for the purpose of exonerating her brother, Kenneth Waters, who was wrongfully convicted of murder, was publicized in the movie Conviction.
After Kenneth died in an accident six months after Betty Anne won his release from prison, she sued on behalf of his estate the town of Ayer, Massachusetts for unconstitutional and tortious conduct resulting in Kenneth's wrongful conviction and incarceration. That lawsuit resulted in a settlement in which the town assigned to Betty Anne its rights against its insurer, Western World Insurance Company. (In addition, the estate received $3.4 million from other insurers.)
Betty Anne then sued as assignee Western World, alleging that it breached its duty to defend the town. The Massachusetts Superior Court granted summary judgment to Western World. In Waters v. Western World Ins. Co., 2013 WL 499215 (Mass. App. Ct.) (unpublished), the Massachusetts Appeals Court reversed the granting of summary judgment.
The law enforcement officers liability policies Western World issued to the town of Ayer were in effect after Kenneth's conviction. They provided coverage for negligent acts, errors or omissions, including for false arrest, false imprisonment, and malicious prosecution. The policy had an exclusion for willful violations of a penal statute or ordinance committed by or with the knowledge or consent of the insured.
The underlying complaint alleged that the town had a policy, custom and practice, continuing throughout Kenneth's incarceration, of failing to adequately train and supervise employees with respect to the disclosure of exculpatory evidence; that it failed to undertake any reinvestigation to discover and remedy the fact that undisclosed exculpatory evidence existed; and that it ignored its affirmative duty to disclose information that would have demonstrated Kenneth's innocence.
The Massachusetts Appeals Court held that those allegations implicate acts, errors and omissions during the Western World policy period, and that they leave open the potential for liability to be predicated on covered negligence. In a dig, the court cited to another case in which Western World, as a party, established that supervisory liability under 42 U.S.C. s. 1983 (the federal civil rights act) may sound in negligence.
The court held that Western World could not establish based upon the allegations of the underlying complaint that the exclusion for willful conduct excluded coverage. The complaint contained no explicit allegations of violation of a penal statute or that any insured was ever charged with or convicted of criminal conduct in relation to the matter.
After Kenneth died in an accident six months after Betty Anne won his release from prison, she sued on behalf of his estate the town of Ayer, Massachusetts for unconstitutional and tortious conduct resulting in Kenneth's wrongful conviction and incarceration. That lawsuit resulted in a settlement in which the town assigned to Betty Anne its rights against its insurer, Western World Insurance Company. (In addition, the estate received $3.4 million from other insurers.)
Betty Anne then sued as assignee Western World, alleging that it breached its duty to defend the town. The Massachusetts Superior Court granted summary judgment to Western World. In Waters v. Western World Ins. Co., 2013 WL 499215 (Mass. App. Ct.) (unpublished), the Massachusetts Appeals Court reversed the granting of summary judgment.
The law enforcement officers liability policies Western World issued to the town of Ayer were in effect after Kenneth's conviction. They provided coverage for negligent acts, errors or omissions, including for false arrest, false imprisonment, and malicious prosecution. The policy had an exclusion for willful violations of a penal statute or ordinance committed by or with the knowledge or consent of the insured.
The underlying complaint alleged that the town had a policy, custom and practice, continuing throughout Kenneth's incarceration, of failing to adequately train and supervise employees with respect to the disclosure of exculpatory evidence; that it failed to undertake any reinvestigation to discover and remedy the fact that undisclosed exculpatory evidence existed; and that it ignored its affirmative duty to disclose information that would have demonstrated Kenneth's innocence.
The Massachusetts Appeals Court held that those allegations implicate acts, errors and omissions during the Western World policy period, and that they leave open the potential for liability to be predicated on covered negligence. In a dig, the court cited to another case in which Western World, as a party, established that supervisory liability under 42 U.S.C. s. 1983 (the federal civil rights act) may sound in negligence.
The court held that Western World could not establish based upon the allegations of the underlying complaint that the exclusion for willful conduct excluded coverage. The complaint contained no explicit allegations of violation of a penal statute or that any insured was ever charged with or convicted of criminal conduct in relation to the matter.
Tuesday, February 12, 2013
Hurricane deductibles
AgentsofAmerica.Org has an interesting article called "The Use of Hurricane Deductibles in Northeast States." It talks about ramifications of deductibles applying only to weather events formally labeled hurricanes.
Wednesday, January 9, 2013
Welcome to the 174th Cavalcade of Risk
I am honored to be once again hosting the Cavalcade of Risk, a roundup of risk posts from around the blogosphere.
I'm nicknaming this cavalcade the Cavalcade of Risk of Risk, in honor the many posts that discuss how an obvious risk (drunk-driving, getting sick) leads to a different sort of risk (personal financial disaster; having your medical records kidnapped.)
Risks from healthcare
Risks to life from holding it in
Fearless leader of the Cavalcade of Risk Hank Stern posts at InsureBlog that failure to express anger "can have serious repercussions for a person's physical and mental wellbeing."
Financial risk from drunk driving
Emily Guy Birken writes at PTMoney about the cost of an arrest and prosecution for drunk-driving.
I'm nicknaming this cavalcade the Cavalcade of Risk of Risk, in honor the many posts that discuss how an obvious risk (drunk-driving, getting sick) leads to a different sort of risk (personal financial disaster; having your medical records kidnapped.)
Risks from healthcare
You’re probably aware of the risks of identity theft, but were you aware that medical ID theft is a crime that’s on the rise? That medical records have been held for ransom? Julie Ferguson of Workers’ Comp Insider offers insight in her post “Storm Clouds Ahead: Hackers, Healthcare Data and Medical ID Theft”
Risks to life insurance rates from asthma
Jeff Root posts at Root Financial & Insurance Services about how asthma may or may not affect life insurance rates.
Risks to life insurance rates from asthma
Jeff Root posts at Root Financial & Insurance Services about how asthma may or may not affect life insurance rates.
Risks to life from holding it in
Fearless leader of the Cavalcade of Risk Hank Stern posts at InsureBlog that failure to express anger "can have serious repercussions for a person's physical and mental wellbeing."
Financial risk from drunk driving
Emily Guy Birken writes at PTMoney about the cost of an arrest and prosecution for drunk-driving.
Risks from workplace injuries
At the Workers Comp Resource Center, Michael Stack provides five tips for avoiding or minimizing injuries and, thus, avoiding or minimizing workers compensation claims.
Risks from natural disasters
At Risk Management Monitor, Emily Holbrook posts about the largest natural hazard risks of 2012. She concludes, "As we’ve seen with the natural catastrophes of 2012, it is important for insurers, homeowners and businesses to develop a more comprehensive evaluation of risk — one that includes typically non-traditional locations."
Risks of misdirected risk prevention
David Williams at Healthcare Economist has a promising title to his blog post, "Mental health access is no substitute for gun control." He points out that two of the recent mass shooters had good access to mental health treatment. But he doesn't go to the next step in his article: Improving mental health treatment in this country, while an admirable goal, will not go as far in improving safety as improving gun control will.
Risk of risk management not working
In the most surprising post of the day, Jason Shifrin writes at Healthcare Economist that disease management programs don't work. He discusses a study showing that states that have implemented diabetic disease management programs do not have lower rates of hospital admissions than states that do not have such a program. I'm not looking at the source material or analyzing the statistics; suffice it to say that I remain lazy but skeptical.
Managing the risk of not being able to afford health insurance
Rather than pointing out that Obamacare will make affordable health insurance available to many people of limited resources, at Christian Personal Finance Joe Plemon lists alternative methods of obtaining insurance. One option he discusses is religious-based organizations that pool resources for health care. As I wrote here, the concept behind those organizations is insurance at its most basic.
Thanks everyone. Julie Ferguson at Worker's Comp Insider hosts the next Cavalcade of Risk.
At the Workers Comp Resource Center, Michael Stack provides five tips for avoiding or minimizing injuries and, thus, avoiding or minimizing workers compensation claims.
Risks from natural disasters
At Risk Management Monitor, Emily Holbrook posts about the largest natural hazard risks of 2012. She concludes, "As we’ve seen with the natural catastrophes of 2012, it is important for insurers, homeowners and businesses to develop a more comprehensive evaluation of risk — one that includes typically non-traditional locations."
Risks of misdirected risk prevention
David Williams at Healthcare Economist has a promising title to his blog post, "Mental health access is no substitute for gun control." He points out that two of the recent mass shooters had good access to mental health treatment. But he doesn't go to the next step in his article: Improving mental health treatment in this country, while an admirable goal, will not go as far in improving safety as improving gun control will.
Risk of risk management not working
In the most surprising post of the day, Jason Shifrin writes at Healthcare Economist that disease management programs don't work. He discusses a study showing that states that have implemented diabetic disease management programs do not have lower rates of hospital admissions than states that do not have such a program. I'm not looking at the source material or analyzing the statistics; suffice it to say that I remain lazy but skeptical.
Managing the risk of not being able to afford health insurance
Rather than pointing out that Obamacare will make affordable health insurance available to many people of limited resources, at Christian Personal Finance Joe Plemon lists alternative methods of obtaining insurance. One option he discusses is religious-based organizations that pool resources for health care. As I wrote here, the concept behind those organizations is insurance at its most basic.
Thanks everyone. Julie Ferguson at Worker's Comp Insider hosts the next Cavalcade of Risk.
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