The Top 10 Insurance Tips for Corporate Law Departments Presenter: John N. Ellison, Esq. 267-216-2710 jellison@andersonkill.com

Overview What Is Insurance? Fundamental principle is the TRANSFER OF RISK. Insurance companies agree to assume another’s liability or other risks for an up-front fee or premium.

What Makes Insurance Different Insurance policies are contracts of adhesion. Insurance policies are aleatory contracts. Insurance contracts are supposedly regulated transactions. Insurance is supposed to satisfy a public interest.

With Apologies to David Letterman… YOUR TOP TEN INSURANCE TIPS!

Tip #1: The Purpose Of Insurance Is To Insure. Don’t underestimate possible problems in the future. Think loss prevention and risk transfer, not loss financing.

Tip #2: Insurance Expertise Should Not Be Limited To The Insurance Department. Building an expertise within the company is critical to taking advantage of any and all available coverage.

Tip #3: Lawyers And Risk Managers Can Be Natural Allies. Recognize the beneficial role of risk managers. Put insurance-related communications in writing. Assist in the analysis.

Tip #4: Insurance Is An Essential Component Of Corporate Resource And Asset Conservation Plans. Purchase insurance with the intent of safeguarding the company’s own property and employees. Recognize what actually transfers risk and what does not.

Tip #5: Think Insurance After A Loss Occurs. Look to insurance coverage following all lawsuits, claim letters and financial losses. Analyze other sources of insurance that may potentially cover a claim. – OPI, direct actions, etc.

Tip #6: Give Notice Of A Claim Or Loss As Soon As Possible. When you are faced with a claim or loss, notify the broker, the insurance company, or both as soon as possible.

Tip #7: When You Make A Claim, Do Not Accept “No” For An Answer. There is no downside to challenging an insurance company’s denial of coverage. Determination and persistence often mean the difference between coverage and no coverage.

Tip #8: Find Out Where Your Company’s Policies Are. Today. Locate, collect and catalogue past insurance policies. Acquire and keep policies of all entities related to your company.

Tip #9: Do Not Panic If Your Insurance Company Becomes Insolvent. File a proof of claim as a creditor. File a claim against the state guaranty fund in one or more possible jurisdictions. Ask the first layer insurance companies to “drop down.” Consider litigation options.

Tip #10: Make Sure Your Insurance Team Is “Conflict Free.” Untainted and neutral evaluations will maximize your company’s risk transfer success and best protect your company’s assets.

Insurance Industry Dogma or Dog*? - ? “Sophisticated” policyholders are entitled to less protection. Insurance contracts are “negotiated.” All doubts should be resolved against coverage. Policyholders must “cooperate” with insurance companies by providing information even when no coverage is being provided.

Insurance Industry Dogma or Dog*? - ? – cont’d. Insurance Industry Titles Are Usually Misleading - - e.g., “Absolute” Pollution Exclusion is NOT “Absolute.” Natural Disaster Warrant Coverage Restrictions and Government Bailouts.

Question and Answer

John N. Ellison, Esq. Anderson Kill & Olick, P. C. 1600 Market St John N. Ellison, Esq. Anderson Kill & Olick, P.C. 1600 Market St. Suite 2500 Philadelphia, PA 19103 jellison@andersonkill.com (267) 216-2710 (215) 568-4573 www.andersonkill.com