Lawyers working for insurance companies have been exposed to significant pressures from their clients in recent years. While cost-containment billing guidelines and other measures have created significant tensions in those relationships, even the most creative, out-of-the-box management consultant for insurers is unlikely to have dreamt up the facts of a recent Mississippi Supreme Court case.
Nearly 100,000 killed last year, the same rate as in the ongoing, repellent genocide in Darfur. But this figure is the estimate of the number of Americans who die annually due to medical-malpractice errors.
That’s one of the key points emphasized in the trenchant new book by Professor Tom Baker, The Medical Malpractice Myth (2005). Baker’s slim, accessible, engaging, and well-written volume argues that the prevailing myths concerning medical malpractice and doctors’ liability-insurance premiums are the stuff of urban legend.
The California Court of Appeal has reversed a ruling holding that liability insurers of an asbestos company had immediate obligations to perform in full once a trust was established through section 524(g) of the bankruptcy code that concurrently extinguished the liability of the policyholder vis a vis the asbestos claimant creditors. Fuller-Austin v. Highlands Ins. (Cal. App. Jan. 19, 2006). The “acceleration” of insurers’ obligations that these 524(g) trusts might create has caused apoplexy in the insurance industry, and the California court’s reversal of the insurance ruling that the creation of the trust meant the insurers had immediate obligations to perform for the total (non-bankruptcy) value of the future claim stream no doubt produced a collective sigh of relief from the insurance industry (and their reinsurers).
For the past several years, the plaintiffs’ tort bar has sought to make workplace-exposure claims by welders the proverbial “next asbestos.” These cases typically allege a Parkinson’s Disease-like syndrome (“Parkinsonism”) or other neurological impairments (all generally referred to as “manganism”) allegedly stemming from the welder’s exposure to manganese while working. Whether this is a mass-tort with legs is certainly not clear, and the defense has had successes (even in what are considered to be plaintiff-friendly jurisdictions). Naturally, this litigation has produced insurance cases too, and the Maryland Court of Appeals (its highest court) recently ruled that an absolute pollution exclusion did not apply to bar coverage. Clendenin Bros. v. United States Fire Ins. Co. (Md. Jan. 6, 2006).
Liability insurance policies apply where the insured is liable for bodily injury, property damage, or wrongful acts (depending on the policy). What happens, however, when the policyholder denies that any injury or wrongdoing took place? Does that mean that insurance is not applicable?
Defense-cost expense in major litigation – either one-shot cases or related, serial cases – can accumulate to rather substantial amounts, so naturally policyholders look to their liability-insurance policies for coverage. While most defense-cost coverage disputes concern primary-layer policies, excess insurers, too, may have obligations to perform. As discussed below, a recent Indiana appellate decision addressed coverage for defense costs under a primary-layer policy written on an excess policy form and held that the coverage was restricted to after-the-fact payment as an incident to covered indemnity amounts.