Lesser Law Group San Rafael Business & Insurance Law Attorney | Lesser Law Group2024-03-18T07:20:15Zhttps://www.lessergroup.com/feed/atom/WordPressOn Behalf of Lesser Law Grouphttps://www.lessergroup.com/?p=503922024-03-13T07:20:29Z2024-03-18T07:20:15ZMaterial misrepresentation
Failing to disclose relevant information such as a pre-existing medical condition, a history of prior claims or property modifications can constitute material misrepresentation. Even innocent mistakes or omissions can give the insurance company grounds to rescind your policy.
Fraudulent activity
Engaging in fraudulent activities is a serious offense that can lead to policy rescission. These might include deliberately providing false information or staging events to make a claim.
Consequences of rescission
When an insurance provider rescinds a policy, it is as if the policy never existed. This means you lose coverage for any claims made under that policy, and it may be necessary for you to repay any benefits received. Additionally, having a policy rescinded can make it more difficult to obtain insurance in the future, as it signals to other insurers that you may present a higher risk.
Your options
If you believe that your insurance provider wrongfully rescinded your policy, you have options. You can appeal the decision with the insurance company or seek guidance from the California Department of Insurance. You might also choose to take legal action against the insurance company or seek compensatory damages for wrongfully rescinding your coverage.
While having your insurance policy rescinded can be unsettling, a wrongful rescission is contestable. By providing accurate information and avoiding fraudulent activities, you can help maintain the integrity of your insurance coverage and safeguard your financial well-being.]]>On Behalf of Lesser Law Grouphttps://www.lessergroup.com/?p=503942024-02-28T05:45:35Z2024-03-05T05:45:21ZUnderstanding insurance coverage
Hotels typically carry insurance policies to protect themselves against various risks, including vandalism. These policies may include coverage for property damage such as broken windows, graffiti or other forms of malicious destruction. However, the extent of coverage can vary depending on the specific terms and conditions of the policy.
Filing a claim
When vandalism occurs, the hotel management should promptly notify their insurance provider and file a claim. Documenting the damage thoroughly can make all the difference. This includes taking photographs and gathering any relevant evidence. Providing this information to the insurance company can help expedite the claims process and ensure a smoother resolution.
Coverage limitations
While insurance can help offset the costs of vandalism, there are limitations and exclusions of which to be aware. Some insurance policies may have deductibles or coverage limits that could affect the amount reimbursed for damages. Additionally, certain types of vandalism may not fall under the terms of the policy.
Hotels regularly spend as much as $250,000 per year to repair or replace damaged carpets and furniture. While some damage is certainly the result of accidents, it is not uncommon for hotel property to become the target of vandalism. Business owners need to understand when insurance can bear the burden of these costly damages.]]>On Behalf of Lesser Law Grouphttps://www.lessergroup.com/?p=503772024-01-31T05:10:57Z2024-02-06T05:10:38ZCoverage for data loss
When a fire devastates an IT company's premises, the immediate concern is often the loss of physical assets. However, the real challenge lies in the potential loss of critical data stored on servers, computers and other electronic devices. Insurance tailored for IT companies typically includes coverage for data loss due to fire or other disasters. This means that the financial burden of recovering or recreating lost data can be significantly alleviated.
Business interruption coverage
In the aftermath of a fire, an IT company may face a temporary halt in its operations. This interruption can result in significant financial losses due to missed deadlines and a damaged reputation. Insurance policies often provide coverage for such business interruptions, offering financial support to help the company stay afloat during the recovery period.
Liability protection
An IT company can face legal challenges from clients or stakeholders who suffered losses due to a data breach. Insurance policies often include liability protection, shielding the company from legal repercussions and associated financial liabilities. This not only safeguards the company's financial well-being but also helps in maintaining client trust and loyalty.
Studies show that 43% of businesses that experience major data loss due to natural events end up going out of business. The right insurance coverage can mitigate the financial aftermath of a significant data loss, so it is important to explore your options thoroughly.]]>On Behalf of Lesser Law Grouphttps://www.lessergroup.com/?p=503862024-01-25T04:55:49Z2024-01-31T04:55:01ZDetermining severity
Insurance coverage for wind damage varies, but generally, it kicks in when the wind causes significant harm to structures and property. The California Governor's Office of Emergency Services explains that high winds can cause structural damage, spreading fires and devastating wind-flung debris. To trigger insurance coverage, the damage must be substantial and compromise the integrity of the property.
Visible and documented damage
To make a successful insurance claim, property owners need to provide clear and documented evidence of the wind damage. This includes detailed photographs and descriptions of the affected areas, highlighting the severity of the destruction. Insurance companies rely on this evidence to assess the extent of the damage and determine the coverage amount.
Timely reporting
In the aftermath of severe wind damage, quick action is key. Homeowners and business owners should report the damage to their insurance company as soon as possible. Timely reporting not only expedites the claims process but also ensures that all necessary information is fresh and readily available.
The severity of damage caused by high-intensity winds makes all the difference for property owners attempting to file an insurance claim. It is necessary to thoroughly assess the impact with a practiced eye and to fully understand the limitations of the coverage policies in place.]]>On Behalf of Lesser Law Grouphttps://www.lessergroup.com/?p=503582023-12-07T04:08:49Z2023-12-13T04:08:15Z1. Implement robust cybersecurity measures
Ensure that your business has a robust cybersecurity system in place. Regularly update your software and firewall protection to guard against evolving threats. Train employees to recognize phishing attempts and encourage the use of strong, unique passwords. By prioritizing cybersecurity, you create a formidable barrier that deters potential data breaches.
2. Conduct regular security audits
Frequent security audits are important for identifying vulnerabilities in your systems. Regularly assess your networks, databases and applications to detect and address potential weaknesses promptly. This proactive approach helps fortify your defenses and demonstrates your commitment to safeguarding sensitive information.
3. Develop and enforce strict data access policies
Limiting access to sensitive information is a necessary aspect of data protection. Implement stringent data access policies to ensure that only authorized personnel can access confidential data. Regularly review and update these policies to reflect changes in your organization's structure and personnel.
4. Establish a rapid response plan
Despite all precautions, breaches can still occur. Having a well-defined response plan in place is essential to mitigate the impact of a breach. Designate a response team, clearly outline their roles, and conduct regular drills to ensure a swift and efficient response in the event of a data breach.
Along with the high cost of a data breach, which cost $4.45 million on average in 2023, it also opens the door for other legal woes. Prioritizing data security not only protects your business but also builds trust with customers.]]>On Behalf of Lesser Law Grouphttps://www.lessergroup.com/?p=503562023-11-20T05:28:51Z2023-11-24T05:28:35ZRising premiums
One pressing concern is the steady rise in insurance premiums across the state. Higher monthly payments make it increasingly difficult for Californians to afford coverage. Whether it is health, auto or homeowners insurance, the burden of escalating premiums weighs heavily on the wallets of individuals and families alike.
Limited coverage
Many residents are also contending with limited coverage options. Some insurance policies fail to provide comprehensive protection, leaving policyholders vulnerable to unforeseen circumstances. From gaps in health coverage to limitations in property insurance, the struggle to find policies that meet diverse needs is a widespread challenge.
Climate change challenges
California's susceptibility to wildfires and other climate catastrophes adds another layer of complexity. Homeowners face the tedious task of securing adequate coverage amid increased fire risks. Policy limitations related to natural hazard events leave homeowners fearing financial ruin should a natural disaster occur.
The changing climate also impacts auto insurance in the state. Vehicle owners are dealing with the consequences of an increase in extreme weather events, such as floods, earthquakes and mudslides.
An uptick in weather-related accidents contributes to higher claim rates. This could cause a premium hike for all, even those who have not personally experienced such events.
Regulatory hurdles
Navigating the insurance landscape is further complicated by regulatory hurdles. The intricacies of state regulations can overwhelm consumers seeking clarity on their policies. The complex language used in policy terms and conditions can create misunderstandings and lead to disputes.
Market changes
Multiple major insurance carriers have paused or restricted coverage in California in response to surging climate risks. State lawmakers are trying to entice carriers to continue doing business in the state by drafting new rules. Some proposed changes include enabling insurers to:
Factor in climate change when setting rates
Recoup some reinsurance costs
Consider home improvements that increase wildfire resistance
New regulations will take time to plan and implement. The lengthy process allows insurance carriers and consumers to give input.
Finding viable solutions to these issues remains a priority for those seeking financial security in the Golden State.]]>by Don Lesserhttps://www.lessergroup.com/?p=503402023-11-07T06:10:36Z2023-11-07T05:54:13Z, even when the policyholder believes the insurer has failed to respond properly to the claim. Nearly all Commercial General Liability, Directors’ & Officers’ Liability, Errors & Omissions Liability and other liability insurance policies contain a provision stating that the insured must obtain the insurer’s prior written consent to any settlement the policyholder wants the insurer to pay. The purpose of this provision is to give the insurer a reasonable opportunity to evaluate whether the proposed settlement is a reasonable one in light of the insureds’ exposure to liability and the damages being claimed.
Vizio, which sells Smart TV’s, was named as a defendant in multiple consumer class actions alleging that Vizio secretly tracked what viewers were watching on its TV’s and sold the information to other companies without its customers’ consent. Vizio sought coverage for the suits from two insurers providing the company Directors & Officers (“D&O”) Liability Insurance coverage. Navigators Insurance Company provided primary D&O coverage and Arch provided excess coverage above the coverage limits of the Navigators primary policy. Vizio notified both carriers of the lawsuits in February 2016, after which Navigators denied coverage. Arch, while requesting additional information, neither accepted nor denied coverage. Vizio settled the lawsuits in 2018 for $17 million. While Vizio sought a contribution to the settlement from Navigators and another insurer, it did not notify Arch of the proposed settlement nor seek its consent to the settlement prior to entering into it.
Vizio then sued Navigators and Arch, seeking recovery of the settlement amount and alleging breach of the insurers’ duties under their policies and bad faith claim practices. In response, Arch alleged that, even if its policy afforded coverage for the consumer claims, it had no duty to fund the settlement because Vizio breached its duty under the policy to obtain Arch’s consent before entering into any settlement. The trial court granted Arch’s motion to dismiss the suit on that basis, and others.
In the appeal, Vizio argued it was not obligated to obtain Arch’s consent for three reasons, all of which the appeals court rejected in affirming the trial court’s ruling on that issue. Vizio argued first that the Arch excess policy, which “followed the form” of the Navigators primary policy, only incorporated the Navigators policy’s provisions specifying the scope of coverage, not all its terms. The court noted that the Arch excess policy specified that “coverage under this policy shall follow form to, and apply in conformance with, the provisions of the Primary Policy.” Again citing the primary policy’s express consent requirement, the court also rejected Vizio’s argument that the Arch policy’s conditions specifying the insurer’s “Duties in the Event of a Claim” did not mention obtaining Arch’s consent to a settlement.
Finally, the court rejected Vizio’s argument that Arch’s failure to state its coverage position excused Vizio from complying with the consent requirement. Vizio argued that Arch breached its obligations under the policy by failing to comply with California’s Fair Claims Settlement Practices Regulations, Code of Regulations Title 10, Section 2695.7(b). That regulation requires an insurer to accept or deny a claim within 40 days of receiving the insured’s “proof of claim.” The court found Vizio had not alleged such a violation because the regulation requires the insurer to relay its coverage decision only after receiving information that “reasonably supports the magnitude or the amount of the claimed loss.” 10 C.C.R. § 2695.2(s). The court held that Vizio’s February 2016 notice of the claim Arch was just that -- a notice of claim, not a proof of claim. The court pointed out that Arch had complied with its obligation to respond to that notice, as Section 2695.5(e) of the Regulations requires only that the insurer acknowledge receipt of the notice and begin its investigation within fifteen days. The court also noted that Vizio had never updated Arch on the status of the litigation or provided Arch information which, in the words of Section 2695.2(s), “supported the magnitude of the amount of the claimed loss.” Accordingly, the court found that Vizio had not alleged facts supporting its argument that its duty to obtain Arch’s consent to the settlement was excused by Arch’s failure to perform its duties under the policy or applicable claims handling regulations. The court found that Vizio’s suit against Arch was properly dismissed by the trial court on that basis.
Take AwaysFor business policyholders, the lesson of this decision is to keep all insurers issuing potentially applicable policies informed on the status of the claim, including excess carriers not involved in defending the insureds. Policyholders must also seek the prior written consent to any proposed settlement from all potentially involved insurers. Consent should be requested even from an insurer that has not formally responded to the claim, or taken a position regarding coverage. These lessons are particularly important when excess policies may be available, because excess insurers – which generally have no immediate obligations regarding the claim and are not involved in the defense -- often do not assert their coverage positions when they are first notified. Often they do not become involved until the policyholder or its broker notifies the carrier that the value of the claim may exceed the amount of the primary coverage or that their involvement is necessary to resolve the claim.
In-house counsel, risk managers or others responsible for the company’s insurance program should ensure that all appropriate insurers are kept up to date on the status of pending claims and any settlement discussions. Defense counsel typically keeps the insurer update to date on claim status. Most mid-to-large brokerage firms have claims staff whose job it is to keep insurers updated on the policyholder’s behalf, though the company should take steps to ensure that whoever is performing this function is doing so diligently and consistently. Smaller firms typically do not provide this service.
The process of obtaining the insurer’s consent typically involves defense counsel’s evaluation of the insureds’ exposure, analysis of the claim’s settlement value, and a recommendation regarding the dollar range and other key terms of an appropriate settlement. That information must be provided to all insurers whose policies are potentially involved in order to secure the insurers’ consent and agreement to fund a settlement. If there are coverage issues limiting what the insurers will agree to pay, the company will usually retain insurance recovery/coverage counsel to negotiate the insurers’ contribution. In most cases all these steps should be completed before undertaking negotiations with the plaintiff, though insurers will not always disclose the most they are willing to pay prior to negotiations. Of greatest importance is to ensure that the insureds perform their obligations under the policy, and document having done so, to avoid giving up coverage which may otherwise be available.]]>On Behalf of Lesser Law Grouphttps://www.lessergroup.com/?p=503362023-10-30T06:10:18Z2023-11-02T06:09:59ZThe violations
The California Department of Insurance identified several violations committed by Go Maps and Topa, including:
Failure to pay claims within the legally required 30 days, causing significant delays for affected consumers.
Not acknowledging claims, providing forms or initiating investigations within the stipulated 15-day timeframe.
Inadequate response to consumer inquiries about their claims within 15 days.
Failure to accept or deny claims within 40 days.
The hiring of an unlicensed insurance adjusting firm to handle claims.
What happened signifies a major shift in how we handle insurance. It shows that the digital era should not be a place where we forget consumer rights.
Consumer protection is top priority
The key lesson here is that, no matter how tech-savvy insurance becomes, consumers should always come first. When people buy insurance, they trust these companies to help them when they need it. Delays in claims or not responding to consumers promptly can cause serious problems for policyholders.
The focus from Insurance Commissioner Ricardo Lara is important. When companies break the rules meant to protect consumers, there should be consequences. These settlements show that regulators will step in to make sure they look after consumers and companies do what they promise.
Innovation and oversight
The Go Maps and Topa settlements remind us that we should balance innovation with consumer protection. As technology keeps changing the insurance game, our commitment to safeguarding policyholders still is strong. This case highlights the fine line between innovation and consumer rights, stressing the importance of responsible and ethical practices based on our laws and rules in the evolving insurance world.]]>On Behalf of Lesser Law Grouphttps://www.lessergroup.com/?p=503302023-10-12T04:19:01Z2023-10-18T04:18:47ZPolicy limitations
The repercussions of these policy limitations are far-reaching. With over half of California's residents estimated to be homeowners, many are struggling to find affordable home insurance.
Historically, California's high wildfire risk has been a concern. However, the increase in severity and construction costs have pushed insurance providers to reassess doing business in the state.
The drivers
Several key factors have driven insurers to slow down or leave the California home insurance market:
Proposition 103, implemented in the 80s, mandates that insurers seek state approval for rate increases exceeding 7 percent. This process protects policyholders, but delays rate adjustments. Consequently, insurers become unable to cover rising costs.
Climate change has exacerbated wildfires, putting over two million homes at high risk. The length of wildfire season has also extended dramatically.
Construction material prices surged nearly 40 percent in just four years. This added significant financial pressure on insurers' ability to stay solvent.
Reinsurance, a vital safety net for insurers, is becoming increasingly expensive. This, along with growing climate risks, diminish the insurers' financial flexibility.
These factors complicate the situation for insurance agencies and homeowners alike.
Future implications
Efforts are being made to address the crisis. There are discussions about modernizing Proposition 103. Lawmakers hope to incorporate wildfire modeling into rate calculations. This could provide insurers with a more flexible framework.
Governor Gavin Newsom's executive order, issued in September, aims to improve the efficiency of the rate approval process. This offers a glimmer of hope for homeowners and insurers alike.
The current upheaval in California's home insurance market calls for urgent reforms. As the state struggles with climate change challenges, lawmakers, insurers and homeowners must collaborate to find sustainable solutions.]]>On Behalf of Lesser Law Grouphttps://www.lessergroup.com/?p=503272023-10-03T06:36:36Z2023-10-06T06:36:12ZWildfire risk and concentration
California's ever-present wildfire risk adds another layer of complexity to the FAIR plan problem. As the state grapples with increasingly destructive wildfire seasons, more homes are categorized as high-risk under the FAIR plan. This concentration of high-risk properties intensifies the financial burden on policyholders.
And since catastrophic wildfires can strain the FAIR plan's resources, it also poses a substantial risk to the insurance industry. So yes, this means you may find yourself, among other homeowners, without the necessary support in the aftermath of a disaster.
California's new approach
The good news is that California is taking bold steps to address the challenges posed by climate change and wildfires. State leaders have recently announced a significant policy shift that allows insurance companies to consider climate change when offering policies.
Insurance companies will prioritize those who protect their properties from disasters like wildfires and floods. This is a unique regulation. Hopefully, by December 2024, 85% of new policies will cover wildfire-prone areas. This should help people move away from the FAIR plan, making insurance more affordable.
This development is part of a broader mandate that requires insurers to offer coverage in wildfire-prone areas. It aims to bridge that gap by providing peace of mind to residents while promoting responsible development in these areas.
Acknowledging climate change
If there’s one thing that California's experience with the expanding FAIR plan underscores, it is the need for a comprehensive approach to address insurance challenges in the face of natural disasters.
By allowing insurance companies to factor climate change into their policies, they are acknowledging the evolving risks posed by a warming climate. This move aligns with the need for insurers to assess and adapt to changing environmental conditions.]]>