0 How To Pursue and Win the Complex Claim RIMS 2012 – Philadelphia, PA Wednesday, April 18, 2012 Ty Childress, Partner, Jones Day Los Angeles, CA (213) John Frantz Vice President and Associate General Counsel Verizon Communications (908) Sheila Small Assistant Treasurer, Risk Management Verizon Communications (908)

1 THE MEMBERS OF THE TEAM THE RISK MANAGER  POTENTIAL STRENGTHS  Understands the policy and underwriting history  Has a good grasp of the business relationship with the insurer  Can help assess impact of this claim on overall insurance relationship

2 THE MEMBERS OF THE TEAM THE RISK MANAGER  POTENTIAL WEAKNESSES  Less willing to pursue aggressive strategy if it involves conflict with professional relationships  Less attuned to legal arguments  Less knowledge of how similar claims are being handled by other policyholders  (Over)concern of premium impact on claim pursuit

3 THE MEMBERS OF THE TEAM THE IN-HOUSE ATTORNEY  POTENTIAL STRENGTHS  Can offer perspective of overall business objectives of client  Brings understanding of legal issues and legal strategy  Early integration in policy negotiations can enhance coverage  Can monitor cost-effectiveness of alternative strategies

4 THE MEMBERS OF THE TEAM THE IN-HOUSE ATTORNEY  POTENTIAL WEAKNESSES  Often focused on liability claims and brings defense ‑ oriented perspective  Coverage claim not always perceived as high profile within company  Workload limitations  Lack of insurance expertise

5 THE MEMBERS OF THE TEAM THE OUTSIDE COUNSEL  POTENTIAL STRENGTHS  Legal expertise in insurance issues  More familiar with insurer negotiating strategy  Able to marshal resources quickly  Not encumbered with internal company politics

6 THE MEMBERS OF THE TEAM THE OUTSIDE COUNSEL  POTENTIAL WEAKNESSES  Not as sensitized to internal company needs  May be less sensitive to impact to business relationship with insurer  Can let case take on a “life of its own” if not monitored

7 THE MEMBERS OF THE TEAM THE BROKER  POTENTIAL STRENGTHS  Familiarity with insurance industry  Potential commercial leverage

8 THE MEMBERS OF THE TEAM THE BROKER  POTENTIAL WEAKNESSES  Generally not privileged communications  Not familiar with legal issues  Not sensitive to internal company objectives

9 DEVELOPING THE STRATEGY Understanding The Underlying Claim  What is the exposure?  One-time or recurring issue?  What potential arguments in the coverage claim could be inconsistent with underlying defense?  Timing considerations

10 DEVELOPING THE STRATEGY Understanding The Coverage  What coverage is potentially implicated?  Were these exposures discussed during underwriting process?  Other parties’ coverage available?

11 DEVELOPING THE STRATEGY Understanding The Company’s Objectives  Is this a bet-the-company exposure?  Need for a defense?  Is company prepared to fully assert its legal rights?

12 TENDERING THE CLAIM Who?  By risk manager, in-house counsel, or outside counsel?  What message is sent?  Who is your “company witness”?

13 TENDERING THE CLAIM Which Policies?  All policies?  Third party’s policies versus company’s own policies?  “Targeted tender”

14 TENDERING THE CLAIM How?  Is there a risk of a forum battle?  Do you sue simultaneously?  Do you ask for specific acts or just precautionary notice?

15 NEGOTIATING THE CLAIM Role of Risk Manager  Can use outside counsel as “bad cop” to push insurer to negotiating table  Can offer perspective on overall insurance relationship

16 NEGOTIATING THE CLAIM Role of In-House Counsel  Uniquely situated to balance legal strengths, costs, and company objectives  Can facilitate team communications

17 NEGOTIATING THE CLAIM Role of Outside Counsel  Can aggressively advocate company’s legal rights  Can develop legal plan to maximize exit strategy opportunities

18 LITIGATING THE CLAIM Role of Outside Counsel  Brings legal expertise and resources to bear  Full understanding of procedural aspects of litigation

19 LITIGATING THE CLAIM Role of In-House Counsel  Monitors proper internal and external resource allocation  Coordinates underlying claim strategy with coverage strategy  Can help translate legal process to client constituencies

20 LITIGATING THE CLAIM Role of Risk Manager  Serves as critical company witness  Can monitor insurer conduct to assess future role of insurer in program

21 SETTLING THE CLAIM The Outside Counsel  Identify important timing issues for leverage  After filing suit?  After critical threshold motions decided?  After witnesses deposed?  On courthouse steps?  On appeal?

22 SETTLING THE CLAIM The Outside Counsel  Identify personality of mediator needed  Develop mini-trial presentation to show other side’s decisionmakers

23 SETTLING THE CLAIM The Risk Manager  Identify other side’s decisionmakers  May be able to add business elements to settlement  Identify renewal issues, impact on other claims

24 SETTLING THE CLAIM The In-House Counsel  Has broadest perspective on underlying claim legal strategy, coverage legal strategy, costs  Important internal advocate for claim team decisions

25 CONCLUDING THOUGHTS Risk Manager Perspective  Establish relationships with key insurer personnel  Maintain close working ties with Legal Department In-House Legal Perspective  Anticipate company exposures when negotiating coverage  Persistence matters Outside Counsel Perspective  Acknowledge team members’ strengths and weaknesses  Provide real-time practical guidance and expertise