There are recognized patterns of higher risk. For example, Hurricanes and earthquakes do catastrophic damage to a specific geographic area. These natural disasters pose unique risks to insurance companies as a result of that history. If an insurance company insures at lot of this type of risk, it can face massive losses and have its financial stability threatened. For this reason, insurance companies try to avoid insuring too many homes or businesses (for this example) in an at risk area for hurricane or earthquake damage. While this helps keep insurance companies financially sound, it can make coverage harder to obtain for those who need it most.
The problem of Social Engineering techniques called Phishing, Whaling, Spear Phishing, Pharming, or Impersonation Fraud has become significant and widespread in recent years. The insurance industry has made efforts to keep these risks in mind for cyber liability policies. Sometimes there is language added that will protect a company, but sometimes communication is added to a basic policy that would not protect a business against these specific risks.
The opioid epidemic, besides its unfathomable human costs, has had large economic costs for businesses and governments who must manage workers compensation costs. Opioid prescriptions in the wake of workplace injuries have been linked to higher workers compensation payouts and longer layoffs before injured employees return to work. Facing the bill for these costs, government, citizens, and private entities have filed a veritable avalanche of lawsuits against pharmaceutical companies for their manufacture and marketing of opioid based painkillers.
In claims handling and litigation, a little creativity with definitions can help advance a case forward. Occasionally, though, that creativity gets pushed a little too far. Fireman’s Fund recently won a declaratory judgment ruling they did not owe coverage to a luxury apartment building. The case hinged on the interpretation of a relatively simple word in the insurance policy - “vehicle.”
Insurance lawsuits often turn on the definitions of words. This confusion results in extensive litigation over words that seem to have commonly understood meanings – words like loss or occurrence for example. With millions of dollars on the line, the exact definition of a single term within a policy can make or break a business. This highlights the need for companies to understand to the best of their ability what their insurance coverage provides and what it does, keeping a particular eye on what exclusions may apply.
No one wants to have to submit a claim to their insurance company. For businesses, claims can mean increased costs, increased hassle, and loss of control. That unpleasantness can lead to delays and avoidance when handling issues and accidents that could turn litigious. Effective claims management means taking proactive approaches to these issues at an early point- as a set up for the best possible outcome.
In 2016, the same law firm started twelve different lawsuits against twelve different universities alleging violations of federal retirement law. Schlichter, Bogard, and Denton is often credited with starting the trend of filing lawsuits over excessive fees charged to retirement plans and has apparently moved on to 403(b) plans offered by nonprofit organizations. The university lawsuits alleged similar violations of the Employee Retirement Income Security Act (“ERISA”), claiming that the universities violated their obligation to their employees by failing to take steps to keep fees low while maximizing returns. The trouble for these organizations is that 403(b) plans and 401(k) plans have the same obligations under ERISA. The naming distinction comes from how such plans are treated under the tax code.
As various parts of the United States federal government move to address the growing opioid crisis, the Department of Transportation has updated its drug testing policies to include a stronger focus on testing for painkillers. Published on November 13, 2017, the new policy went into effect on January 1, 2018. It brings the Department of Transportation’s drug testing rules into harmony with new rules issued by the Department of Health and Human Services. The new rules will apply to employers regulated by the Department of Transportation, including the Federal Motor Carrier Safety Administration. That means trucking companies will fall under the purview of this rule change when it comes to pre-employment and post-accident drug testing.
As companies, states, workers compensation boards, and various federal government agencies grapple with the growing opioid epidemic, litigation against the pharmaceutical companies producing opioids for medical treatment has begun in earnest. Multiple state governments have sued these companies alleging a host of legal violations, often centered around deceptive marketing claims. These lawsuits have in turn caused a number of spin-off actions between insurance companies and pharmaceutical companies to determine the extent to which insurance companies have duties to defend or indemnify the pharmaceutical companies from the ongoing litigation.
To combat the growing epidemic of opioid abuse, the Center for Disease Control issued guidelines aimed at limiting the prescription of opioids in ways that might lead to ongoing addiction. Studies have shown that approximately 75% of new heroin users stated that they started their addiction with prescription opioids. Via various methods; obtained themselves with a prescription or from someone else. State governments and the insurance industry have been heavily involved in trying to reduce opioid prescriptions as a way of combating the epidemic, while also aiming to lower the costs of workers compensation claims which can increase exponentially when pain leads to addiction.