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There’s a very true old quote about interpreting insurance policies that I (and other policyholder lawyers) like to cite.  It goes: “Ambiguity and incomprehensibility seem to be the favorite tools of the insurance trade in drafting policies. Most are a virtually impenetrable thicket of incomprehensible verbosity…The miracle of it all is that the English language can be subjected to such abuse and will remain an instrument of communication.” Universal Underwriters Ins. Co. v. Travelers Ins.…
The great American humorist and writer Ambrose Bierce (1842-circa 1914) published a famous work called “The Devil’s Dictionary,” in which he provided astute (if sardonic) definitions of many common terms in the English language. Bierce defined “insurance” for example, as “An ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table.” I’m thinking of starting “The Devil’s Dictionary: Killian…
Back in the 80s and 90s, during the environmental insurance coverage wars, each side (insurance companies and policyholders) frequently accused the other of trying to insert imaginary language into insurance policies after losses had happened. Many lawyers put their kids through college arguing about the meaning of the words “sudden” and “accidental,” for example, in the standard-form pollution exclusion. Both sides were fond of quoting from “Alice in Wonderland” in their legal briefs, and particularly…
I once had a coverage case that involved a claim for environmental contamination at a chicken farm. (Yes.  A chicken farm. In New Jersey.)  When we were able to pry the claim file loose in discovery, we noticed that the carrier had spent a grand total of $24 to investigate the complex pollution claim, which involved millions of dollars in cleanup costs. Using that evidence, we were able to get a well-respected judge to hold…
Earlier this month, I woke up to the sound of sirens and the smell of smoke. My neighbors and friends from around the block suffered a catastrophic fire, and lost their home and all of their belongings, escaping with literally the shirts on their back (and their dogs). Fortunately, no one was injured, but now they have to go through the time-consuming and laborious process of having their insurance claim adjusted. The important thing was…
In our last post, I talked a bit about the dangers of arbitration clauses in insurance policies.  I wanted to continue to develop that topic. Joseph Stalin supposedly once said: “Those who vote decide nothing. Those who count the vote decide everything.”  He was talking about manipulated voting, Soviet-style, not insurance.  But one thing’s for sure:  Control the procedural “rules” in any endeavor, and you have much more control over the outcome (fairly or unfairly). That’s why, when reviewing…
According to the American Arbitration Association’s website, “arbitration—the out-of-court resolution of a dispute between parties to a contract, decided by an impartial third party (the arbitrator)—is faster and more cost effective than litigation.” Yeah…don’t be too sure about that.  Insurance companies are slipping arbitration clauses into more and more policies, and many of these clauses can make life very difficult for policyholders. Often, the arbitration clauses require disputed claims to be arbitrated before a…
In the world of insurance, computers are the new “environmental.” Let me explain. Back in the 1980s, the insurance industry, recognizing the magnitude of exposure it faced for environmental liabilities, embarked on a public relations campaign to convince courts and policyholders that no coverage existed for environmental problems under comprehensive general liability insurance policies. (The industry later changed the name of “comprehensive general liability policies” to “commercial general liability policies,” apparently concerned about the way…
Sadly, it’s a scenario I’ve seen far too many times in the past 30 years of doing insurance coverage work. A trusted employee in the bookkeeping or accounting department isn’t properly supervised or audited, and begins siphoning off cash to support gambling debts, a drug habit, or expensive tastes.  Sometimes, the employee starts taking cash simply because he or she feels underappreciated.  Sometimes, corporate credit cards are the tool of choice. By the time the…
Math has never been my strong suit. My wife, who has an M.B.A., sometimes shakes her head at my unsuccessful attempts to balance our checkbook. And I still remember sitting in my 10th Grade Algebra class with Ms. Babiak at Watchung Hills Regional High School back in the ‘70s and wishing that I could somehow transport myself to the Black Hole of Calcutta. (Sorry, Ms. Babiak, if you’re out there.) But at least that kind…