Lesser Law Group

San Rafael California Insurance Law Firm

Rescinded insurance policies betray people who expected coverage

You selected an insurance policy and paid premiums to obtain financial protection in the event of an accident, theft, fire or other problem. If a loss covered by the insurance contract occurs, you naturally expect to collect on a claim or at least appeal a denial of coverage. The rescission of an insurance policy, however, could not only surprise you but undermine your protection from loss. When a Florida insurance company rescinds your policy, it acts as if the contract never existed.

The insurer will base its decision on claims that you misled the company when you applied for the policy or filed a claim. The insurer essentially accuses you of fraud. In this situation, you might receive a refund of all premiums that you paid along with a declaration that the policy is void. Your refunded premiums, however, might not adequately compensate you for your losses, which could be substantial.

Insurer accused of denying valid claims for addiction treatment

Hundreds of complaints from addiction treatment providers have prompted the California Department of Insurance to serve HealthNet with an Order to Show Cause and Notice of Noncompliance. Court filings indicate that the insurance company failed to meet the terms of its contracts with providers. Accusations from providers detailed an outright denial of legitimate claims or substantial underpayment.

The problem began late in 2015 and carried over into 2016. An investigation by the CDI determined that the insurer started to attack providers with accusations of insurance fraud. The company sent their claims to its special investigations unit without apparently reviewing them. The investigations bogged down providers' claims while withholding payment. While going unpaid, providers had to meet demands for excessive amounts of information about claims for covered and preauthorized treatments.

California business owners prepare for wildfire season

California had a rough year in 2017 due to the horrific damage caused by statewide wildfires, and leading experts expect 2018 to rival the previous year with one of the most deadly seasons on record.

Due to previous harm, businesses and homeowners are preparing for the upcoming season with new safety measures and stronger insurance plans. Recently, Governor Jerry Brown signed two minor bills that offered additional protections for victims of wildfire damages.

Former insurance agent sentenced for fraud

California residents may be interested to learn that in June, a former insurance agent received a sentence of three years of formal probation with time served. The agent, a 31-year-old man, is also required to pay restitution after submitting a plea of guilty to a single felony count of insurance fraud for misappropriating funds from his employer. According to the terms of his plea deal, the man is required to pay back $4,389 to his victim.

The California Department of Insurance Investigators was notified by the insurance company for whom the man worked that he had fabricated insurance documents pertaining to an insurance claim that he filed. While he was employed as an agent with the insurance company, the man also embezzled funds using multiple checks drawn from the company's account.

The value of professional malpractice claims have spiked

California patients and health care professionals may be interested to learn that malpractice claims have increased in recent years. Growth trends have been attributed to insufficient protections against conflicts of interest as well as an increase in people electing to expand into other practice areas.

In a recent survey on professional liability claims, leading lawyers weighed in on the increased risks of professional liability claims. The new Ames & Gough survey, which is conducted annually, points to an increase in conflicts of interest where malpractice issues can be a concern. Seven of the nine insurers included in the survey indicated that conflict of interest incidents played either a leading or secondary role in malpractice claims. The courts are very invested in cases where conflicts of interest are apparent.

Fujifilm files lawsuit against Xerox

Some California residents may be aware that Fujifilm and Xerox were in talks about a merger. On June 18, Fujifilm filed a lawsuit against Xerox for reneging on the deal. Fujifilm is asking for more than $1 billion and punitive damages since Xerox walked away from the $6.1 billion transaction.

The case, which was filed in New York, argues that two activist investors, Darwin Deason and Carl Icahn, pressured Xerox into walking away from the deal. Xerox came to a settlement with the two investors that included the company coming under new management. The merger had been agreed upon in January. Xerox would have become part of the Asian joint venture Fuji Xerox, and Fujifilm would have controlled a majority of Xerox stock.

Adidas and Skechers settle sneaker design lawsuit

California residents who follow business news may be aware that Adidas and Skechers have been embroiled in disputes over sneaker designs for more than two decades. Adidas filed a lawsuit in September 2015 alleging that the Onix sneaker made by Skechers was a virtual copy of its iconic Stan Smith shoe, and the German company's arguments were convincing enough to persuade a judge to prohibit Skechers from selling athletic footwear featuring a three-stripe design or the Supernova name.

Adidas prevailed in court again in August 2017 when its attorneys provided evidence showing that Skechers intentionally copied the Stan Smith design. The court then dismissed Skechers' motion for summary judgment. Many legal experts were unsurprised by the ruling because Adidas has used its three-stripe design on footwear, apparel and accessories for decades. The court was convinced that the mark has become synonymous with the Adidas brand around the world and its use by other manufacturers would confuse consumers.

Avoiding insurance premium fraud

A California security company owner has come under scrutiny for underreporting his payroll expenses in an attempt to lower workers compensation costs. Accused of cheating his insurer of $3.2 million, a San Jose business owner will face workers compensation insurance fraud charges.

His idea to operate two businesses as one entity for the sake of lowering insurance premium costs with their insurance carriers landed him in hot water. Noticeable reporting irregularities in the number of workplace injuries triggered an investigation. During an extensive investigation, it was found that workplace injuries were being underreported. Employees were being instructed to not report work-related injuries stemming from accidents occurring onsite.

Who is responsible when a commercial business floods?

For Sheila Harris-Young and her daughter, Toni Young, opening Bumzy’s Chocolate Chip Cookies was a dream come true. According to the San Francisco Examiner, the pair opened the shop in the Fillmore neighborhood of San Francisco in 2010.

The dream is no longer so sweet now that the family business received an eviction notice. The landlord served the notice for failure to pay rent. The mother and daughter contend the failure to pay rent stems from continued flooding at their commercial property, including one instance of a raw sewage flood that kept the doors closed for almost 10 months. Harris-Young states the repairs cost $18,000.

Taking steps in the aftermath of accounting malpractice

California business owners often turn to an accountant to help manage their finances. Hiring such a professional can reduce the odds of paying too much in tax or being accused of breaking the law. However, it is possible that an accountant will engage in malpractice that could leave a company vulnerable to criminal or civil penalties. To prevent this from happening, accountants should follow either Generally Accepted Auditing Standards or Generally Accepted Accounting Principles.

If an accounting professional deviates from these guidelines, it could be a breach of contract. This is because most efforts to deviate from GAAP or GAAS are intentional, and that could be considered negligence depending on the facts of the case. As a general rule, an accountant must have had a duty of care toward a client that was not maintained. Furthermore, that breach of duty must be the proximate or direct cause of harm to the client.

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