Tuesday, August 22, 2017
   
Insurance Sidebar :: Amy Stewart PC’s Law Blog on Insurance Coverage Issues Minimize

Category: Defense Counsel

Avoid these 7 insurance pitfalls

Every business needs insurance – just in case the unthinkable (or the oh-so-thinkable) happens. Here are seven common mistakes policyholders make (but you can avoid):

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Caution :: California Court Allows Insurer to Sue Independent Counsel for Fees

The California Supreme Court recently ruled in Hartford Casualty Insurance Company v. J.R. Marketing, L.L.C. that an insurer may seek direct reimbursement from independent defense counsel (referred to as Cumis counsel in California) for allegedly excessive and unreasonable fees.

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Is Monkey Business Covered?

In a news article yesterday, the Washington Post discussed the thought-provoking question on everyone’s mind:  “If a monkey takes a selfie in the forest, does he own it”?  Take British nature photographer David Slater, to wit, who is currently gridlocked in a legal battle with Wikimedia Commons over the copyrights to a selfie taken by crested black macaque in 2011, while Slater was in Indonesia.  

The now-famous photo, published here with permission, has spurred controversy as to whether the intellectual property rights belong to Slater, the monkey, or the people at large.

The battle began in earnest after the images showed up on Wikipedia, and then on Wikimedia Commons, an internet-based encyclopedia.  Slater maintains that Wikimedia’s use of the photos, which are available to the public for free, have hurt his business.  According to a similar article published by Reuters, Wikimedia claims that the photos are in the public domain, “because as the work of a non-human animal, it has no human author in whom copyright is vested,” and has declined to remove the photos from its website.

Equally as interesting though, is whether all this monkey business is covered by insurance.  Claims for injunctive relief, which would force Wikimedia to remove the photographs, are typically not covered by standard insurance products.  However, David’s claim for damages may be covered as a “personal and advertising injury” liability under Wiki’s general liability policy.  And more likely than not, given that the Wikimedia is behemoth media publisher, David’s claims are covered under a specific media content or media liability policy.     

Either way, we are rooting for David, and not just because Wikimedia’s claim that the photos are the property of the public domain simply because David didn’t push the button of his own camera is inherently unfair.  See for yourself.   The monkey is cute, but David…David takes a pretty good selfie too!
(David J Slater)



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Debunking the Stowers Myths :: Common Misperceptions Explained (Part III)

This is the third installment in an eight-post series examining common “Stowers myths,” which can obscure application of an insurance company’s duty to behave in a reasonably prudent manner in responding to settlement demands.  If you are beginning here, you may want to visit the first post, here, to learn more about the basic parameters of the Stowers doctrine. MYTH #3  ▪  The insured can make a Stowers demand that triggers an insurer’s duty to ...

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Debunking the Stowers Myths :: Common Misconceptions Explained (Part II)

In this eight-post series, we are examining the most common “Stowers myths” that sometimes confuse the practical application of an insurance company’s duty to behave in a reasonably prudent manner in responding to settlement demands.  If you are new to the series, you may want to start here, at the beginning, to learn more about the basic parameters of the Stowers doctrine.  MYTH #2  ▪   The settlement demand must be in writing to trigger the ...

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Debunking the Stowers Myths :: Common Misconceptions Explained

When an insurance company fails to act reasonably in rejecting or failing to respond to a settlement demand, it may be subject to extra-contractual liability under the long-standing Stowers doctrine.  First articulated more than 80 years ago in G.A. Stowers Furniture Company v. American Indemnity Company, 15 S.W.2d 544 (Tex. Comm’n App. 1929), the common-law Stowers duty  applies when:  (1) the claim against the insured is within the scope of coverage; (2) the demand for sett ...

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Amy Elizabeth Stewart to Present at Advanced Insurance Law Course

Amy Elizabeth Stewart, of Amy Stewart PC, along with David H. Timmins, of Gardere Wynne & Sewell, and Alan D. Freudenheim of Firemans' Fund Insurance Company, will present "A Practical Guide to Common Ethical Dilemmas for Coverage Lawyers and Defense Counsel" at the Texas Bar CLE's Advanced Insurance Law Course 2014.  The panel discussion is scheduled for 12:15 p.m. on Thursday, April 24 at the Westin Oaks in Houston, Texas. The 45-minute presentation provides .75 ...

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Conflicts and Ethical Issues in the Tripartite Relationship

Amy Stewart’s presentation on the ethical considerations in the tripartite relationship is available here. Ms. Stewart has spoken and written extensively on this issue, most recently at a June 19 event for in-house counsel.  The tripartite relationship is the relationship between the insurer, its insured and defense counsel engaged by the insurer to represent the insured in a potentially covered third-party claim. The presentation, “Navigating the Ethical Current: Evaluating Conflicts an ...

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Insured Not Entitled to Independent Counsel :: Downhole Navigator

On Friday, the Fifth Circuit handed down its opinion in Downhole Navigator, L.L.C. v. Nautilus Insurance Company, affirming the district court’s ruling that the insured did not have a right to independent counsel.  Analyzing the conflict issue under Davalos, the court concluded that the facts to be adjudicated in the underlying case were not the same facts on which coverage turned as required to preempt the insurer’s right to control the defense. The insured, Downhole Navigator, provides s ...

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Navigating the Ethical Current :: Conflicts of Interest in the Tripartite Relationship (Part Three)

Considering the conflicts of interest imbedded like landmines in the tripartite relationship, the Texas Supreme Court has clearly articulated defense counsel’s obligations under Texas law.  Nearly 40 years ago, the Texas Supreme Court addressed these issues in the Tilley case.  Employers Cas. Co. v. Tilley, 496 S.W.2d 552 (Tex. 1973).  The standard is surprisingly simple.  The lawyer appointed by the insurer to defend the insured owes a duty of undivided loyalty to the insured.

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Navigating the Ethical Current :: Conflicts of Interest in the Tripartite Relationship (Part Two)

This is the second post in a four-part series analyzing the competing interests inherent in the tripartite relationship, which has long been recognized as "a source of unending ethical, legal, and economic tension.”  State Farm Mut. Auto. Ins. Co. v. Traver, 980 S.W.2d 625, 633 (Tex. 1998) (Gonzales, J., dissenting).  This post focuses on conflicts of interest commonly encountered in the tangled relationships between and among defense counsel, the insured, and the insurer.

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Navigating the Ethical Current :: Conflicts of Interest in the Tripartite Relationship (Part One)

The competing interests inherent in the relationship between the insurance company, its insured, and defense counsel—called the “tripartite relationship”—have long been recognized in the defense of lawsuits covered by insurance.  “[This] so-called tripartite relationship has been well documented as a source of unending ethical, legal, and economic tension.”  State Farm Mut. Auto. Ins. Co. v. Traver, 980 S.W.2d 625, 633 (Tex. 1998) (Gonzales, J., dissenting).  This four-post series will examine the inherent tension in the tripartite relationship, commonly-encountered conflicts, defense counsel’s ethical obligations, and best practices for defense counsel.

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Amy Stewart Law is a boutique law firm that represents policyholders in insurance coverage litigation and bad faith, with an emphasis in directors & officers liability, cyber insurance, fiduciary liability, professional liability and other specialty liability coverages.


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  • insurance coverage litigation
  • bad faith litigation
  • policy interpretation & analysis
  • insurance review & planning advice
  • advice | insurance disputes
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