April 19, 2019

Roll of the Dice Makes White and Williams’ “Coverage College” a Winner

You might think that attending an insurance law conference would be [YAWN…] the most boring experience in the world. But what if you could win $25,000 at the event?

Coverage College

This was the carrot that the Philadelphia-based law firm of White and Williams dangled at its recent annual “Coverage College” at the Philadelphia Convention Center. At the end of the day, registrants could sign up to toss dice and — if they had six straight rolls with the words “White and Williams” facing up, they would win $25,000.

Over 650 insurance professionals from 130 different companies attended the October 3rd event, the seventh offered by White and Williams. This was my second visit and I must say that this is a terrific continuing education forum. White and Williams run it with Swiss-watch efficiency and offer an interesting and eclectic menu of breakout sessions as well as general/plenary sessions.

I attended an excellent breakout session on when the company is on the hot seat.” This featured a variety of clips from actual video depositions, demonstrating what not to do. (Hilarious, UNLESS you are the lucky deponent whose performance is being postmortemed.)

For the second straight year, however, the capstone and final presentation was from an invited policyholder lawyer, typically the loyal adversary of the likes of White and Williams and the type of law firm that sues insurers.  The presenter was William Passannante of the ubiquitous Anderson Kill firm, a heavy-hitter in pro-policyholder coverage litigation. Passannante presented on specific mistakes that he sees insurance companies make in coverage litigation that get them in trouble.

Here is a sampling of mistakes made by insurers, leading to bad faith claims:

            1.Ignoring exposure to attorney fees in many jurisdictions. I.e. if you contest coverage and LOSE, you not only have to pay the claim and coverage counsel’s fees, you also get to pay the policyholder’s legal fees. 

            2.Being unaware of what the adjuster said about the coverage issue before coverage counsel was hired.

            3. Trying to “wall off” loss adjusting activity by moving all claims handling to attorneys.  Trying to keep the claim file privileged by immediately assigning coverage counsel can be an uphill battle, according to Passannante. 

            4.  Failure to notify the policyholder of a reduction in coverage.

            5.  Inexplicable delay in claim handling.

            6.  Forgetting that your adversary in a claim situation is your customer.

            7.  Failure to notify plaintiffs in bodily injury cases, pursuant to state laws and some jurisdictions.  (If you reserves rights or disclaimed coverage, did you inform the third-party claimant?)

            8.  Reviewing the law when convenient rather than reviewing the law in other states that could arguably be the jurisdiction for the case.  (Assuming that one state’s law will control when a case can be made that a different state law applies.)

            9.  Asserting prejudice due to late notice without any basis.  (Not all delays are prejudicial and courts are often very exacting in making the insurer prove prejudice.)

            10.  Denying a claim that the company is advertising as a covered loss at the same time.  Passannante had a case where this really happened — where the insurer’s print ad touted as covered the very claim for which it was contesting coverage.  “Don’t the marketing and claims people ever talk?” Passannante asked.

            11.  Reserving coverage rights when not needed, thereby creating Cumis-type situations and relinquishing control of defense counsel.  What are the odds of prevailing on coverage versus the real risk of relinquishing some control over case defense by creating the insured’s right to separate/independent counsel? 

            12.  Failure to keep the insured informed of developments in defense of the case.

As a parting gift of Conference “swag,” the host firm gave each attendee a “Magic Eight-Ball” to use in answering the eternal question that adjusters ponder, “Is it covered?”  Shake the ball vigorously, and you get answers ranging from “Don’t Bet on It” to “Indications Say `Yes.'” (To make it truly realistic, answer options for future Eight-Balls might include other helpful advice adjusters receive from insurer coverage counsel such as, “It Depends,” or, “Need More Research.”)

At seven years old, the W&W “Claims College” has become a distinct brand.  (In fact, rumor has it that three SEC schools are trying to add easy “W’s” to their 2014 Fall football season by scheduling home games against the “Claims College.”)

If you get a chance to attend next year’s “Coverage College,” GO!

Who knows — you might win $25,000.  And if some lucky insurance person does roll the dice successfully for the prize, don’t feel sorry for the White and Williams firm for having to plunk over the money.

They bought insurance to cover that contingency. 

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