Insurance Advocate May 28

Vol. 129 No. 9 | May 28, 2018

MANE CONCERN: Horse Sense Averts Exposure, Disasters

Volume 129 Number 9 | May 28, 2018

18 M ANE CONCERN: Horse Sense Averts Exposure, Disaster

Contents

4 Foreword: New Heights but Some of the Same Lows

Steve Acunto, Publisher 6

In the Associations: PIANY Meets with State Law Makers PIANJ to Honor Iannello as Company Person of the Year

8 Tech Update: Smart CommunicationsTM Making Customer Conversations Smarter

10 In the News:

Purviance Appointed CEO of AmWINS Group, Inc.

CHUBB Adds Dental Malpractice 12 Guest Article: NY Auto Insurance Now Automatically Includes Supplementary Uninsured/Underinsured Motorists Coverage, Per New Law

Tim Dodge 14 Guest Opinion: Does Your Medical Licensure Protect You?

Jane M. Orient, M.D. 24 On My Radar: No Good Deed Goes Unpunished

Barry Zalma 22 Courtside:

“Insurer Need Not Prove EUO No-Show Was ‘Willful’ Even Without a Good Denial, Plaintiff Cannot Collect More than Fee Schedule Amount

Lawrence Rogak

info@insurance-advocate.com www.insurance-advocate.com

26

Looking Back: May, 1995 INSURANCE ADVOCATE / May 28, 2018 3

[ FOREWORD ]

STEVE ACUNTO

New Heights, but Some of the Same Lows New York’s infrastructure is, well, losing its structure.

uThe $13 billion Gateway rail tunnel project under the Hudson River has lost some of its steam. Taxpayers will pay millions unless the outdated “scaffold law” is repealed. While New York and New Jersey struggle to arrive at a formula for funding, Gateway is stymied by a law that could add as much as $500 million in insurance costs. The project is a new passenger-rail tunnel between New Jersey and Manhattan replacing the two existing ones. That same job and construction-killer law still stands and no one seems able to do anything about it. The law was enacted when the first skyscrapers were built and there were no laws to protect workers.

Today, the statute is now at odds with workers’ comp law, with fairness, sanity, and “proportion” as used in modern tort law. It adds huge costs to construction projects, according to the Lawsuit Reform Alliance of New York. Reports have indicated that insurance costs are so high, disaster relief organizations gave up on helping families affected by Sandy, turning instead to neighboring states. Absolute liability is imposed on these third parties with no limits on damages and no consideration of fault on the part of the worker. Courts have ruled that a worker’s failure to lock the wheels of the scaffold from which he fell is irrelevant in deciding a scaffold law claim. By contrast, modern tort law requires a court to reduce damages if the plaintiff ’s own negligence contributed to the injury. It’s high time.… DataWing Global, an aerial data collection company that works with independent drone pilots to help homeowners and insurance companies cover claims, estimates that drone technology could save insurance companies up to 40% during the upcoming storm season. Storm season is fast approaching and costs insurance companies billions of dollars every year. In fact, last year’s Hurricane Harvey, Maria and Irma have already cost the industry at least $14.5 billion, according to annual reports filed by 15 major insurers. Accordingly, to better prepare for 2018’s upcoming storm season, an unprecedented number of insurance businesses have turned to drone technology to record data and help process claims more quickly and cost-effectively. In fact, Goldman Sachs forecasts in their widely covered drone report that the insurance claims drone market represents a total addressable market worth $1.4 billion. Rather than sending out traditional “ladder teams” to closely inspect roofs and other home facilities (which costs around $150 to $250 per inspection), insurance adjusters can sort through two to three times more claims every day by employing trained drone pilots to fly over properties, take pictures, and deliver the data via cloud. Not only is this service roughly 40% cheaper, but it significantly reduces safety related risks, ensuring less people are climbing onto roofs. DataWing, for one, streamlines the insurance claims process. Once a homeowner files a claim with his/her insurance company, DataWing will receive and act upon this claim in less than four hours. Within 12 to 18 hours, data will be collected and given to the data analysis team, which then prepares and returns it to the insurance company. DataWing uses SmartSky, an internal scheduling program that gives them eyes on their pilot in the field. This secures a constant communication between DataWing and the pilots, which helps monitor jobs and the pilot’s time availability.

It also provides pilots with the tools to input their availability and respond to jobs immediately, which further streamlines the process. DataWing also follows strict compliance standards (background checks, drug tests, airspace checks) when selecting drone pilots to ensure they’re delivering the highest standard of service for their insurance clients and homeowners. Through a robust quality assurance program, DataWing currently manages a large and growing portfolio of certified pilots, operating nationwide. Makes you feel like finding reruns of the Jetson’s on TV. That’s where we are. SA 4 May 28, 2018 / INSURANCE ADVOCATE

S I N C E

1 8 8 9

VOLUME 129 NUMBER 9 MAY 28, 2018

EDITOR & PUBLISHER Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Jamie Deapo Kelly Donahue-Piro Christopher Paradiso Lawrence N. Rogak N. Stephen Ruchman Stephen M. Soble Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Director of Operations and Creative Services Gina Marie Balog-Sartario 914-966-3180, x113 g@cinn.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x111 circulation@cinn.com PUBLISHED BY CINN Media, Inc. P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | Fax: (914) 613-1595 www.cinn.com | info@cinn.com President and CEO Steve Acunto

CINN MEDIA, INC.

INSURANCE ADVOCATE® (ISSN 0020-4587) is published bi-monthly, 20 times a year, and once a month in January, July, August, and December by CINN ESR, Inc., 1030 Lake Street, Greenwich CT, 06831. Periodical postage paid at Greenwich, CT and additional mailing offices.

POSTMASTER Send address changes to Insurance Advocate®, P.O. Box 9001, Mt. Vernon, NY 10552. Allow four weeks for completion of changes.

SUBSCRIPTION RATES $59.00 US, Canada $65.00, International $135.00.

TO ORDER Call 914-966-3180, fax 914-613-1595, write Insurance Advocate® PO Box 9001, Mt. Vernon, NY 10552 or visit www.Insurance-Advocate.com.

INSURANCE ADVOCATE® is a registered trademark of CINN ESR, Inc. and is copyrighted 2018. All rights reserved. No part of this magazine may be reproduced in any form without consent. Trademark registered U.S. Patent and Trademark Office.

For high-quality article reprints (minimum of 100), including digital rights, contact Gina Marie Balog at g@cinn.com or call 914-966-3180, x113

Big Wheels Need Big Coverage For more Information or an Immediate Price Quote Call

1-888-PARKPRICE w w w. p a r k i n s u r a n c e c o . c o m

Your Top Resource for…

• Auto Liability • Physical Damage • General Liability • Split Limits on 100/300 and Single Limits up to $1M Park Insurance's Transportation Insurance Program provides trucking companies with comprehensive, high-quality coverage at affordable rates.

From Competitive Rates to Comparable Commissions.

Large Enough to Service You... Small Enough To Care.

[ IN THE ASSOCIATIONS ]

PIANY Meets with State Lawmakers uALBANY, N.Y.—The Professional Insurance Agents of New York State met with lawmakers at their Albany offices during the association’s Albany Lobby Day, May 15, 2018. PIANY President Fred Holender, CLU, CPCU, ChFC, MSFS, of Williamsville; Presidentelect Jamie Ferris, CIC, AAI, CPIA, of Lansing; Vice President John Tomassi, CPCU, of Clifton Park; and PIA National Director Richard A. Savino, CIC, CPIA, of Warwick, N.Y., were accompanied by PIANY Legislative Representative Patrick Zlogar; and PIANY Director of Government & Industry Affairs Bradford J. Lachut, Esq. They discussed the association’s 2018 legislative priorities, which include: reforms to the New York State Insurance Fund; recognizing the value of participation in professional associations as worthwhile toward continuing education credit requirements for insurance producers and repeal of outdated anti-arson requisites that force insurance carriers to cancel policies when a simple form is not returned.

The PIANY members met with six legislators throughout the day: Senators Neil D. Breslin, D-44, James L. Seward, R-51; and Assemblymen Kevin A. Cahill, D-103, Sean M. Ryan, D-149, Will Barclay, R-120, and Kenneth P. Zebrowski, D-96.

“Meeting with state lawmakers and informing them of our legislative priorities helps PIANY advocate on behalf of our members and the insurance-buying public,” said Holender. “PIANY appreciates the senators and assemblymen who took the time to discuss these issues that are important to professional, independent insurance agents and all of their constituents.”

In addition to the issues cited above, PIANY’s 2018 legislative agenda includes reform to the state’s unique scaffold laws and the necessity of standardizing windstorm deductibles across carrier policies, which would ease cost and reduce confu6 May 28, 2018 / INSURANCE ADVOCATE

sion for the state’s businesses and homeowners, respectively, as well as ensuring

PIANY/PIANJ are trade associations representing professional, independent insurance agencies, brokerages and their employees throughout the state.

customers receive accurate personal insurance quotes prior to binding.[IA]

PIANJ to Honor Iannello as Company Person of the Year ATLANTIC CITY.—John J. Iannello, CPCU, regional underwriting manager for Merchants Insurance Group will be awarded the New Jersey Professional Insurance Agents Company Person of the Year at its Annual Conference held at Harrah’s Resort and Casino in Atlantic City, June 10-12. Nominated by PIA member agents, this award is presented to an individual who fosters a strong working relationship with agents and brokers, and who exemplifies a commitment to professionalism and service.

With over 30 years experience in property and casualty insurance, Iannello joined Merchants Insurance

Group in 2015. He is responsible for directing the underwriting staff, which includes operating efficiency, profitability and controlling the underwriting quality and framework for risk selection and pricing.

“Our members have grown to recognize John as a person who has a strong working relationship between his company and their agencies,” said Kacy Campion Renna, CIC, PIANJ president. “His commitment to the independent agency system is evident in the relationships he’s developed across the state. PIANJ is pleased to present him with this award.”[IA]

[ TECH UPDATE ]

Smart CommunicationsTM Making Customer Conversations Smarter Spring 2018 Release Includes Launch of Conversation History, User Experience Enhancements, the Next Evolution of Smart Components and More uSmart CommunicationsTM, the only independent company focused solely on enterprise customer conversations, has released the latest version of its customer communications management solutions.

Many of the enhancements support the company’s new Conversation Cloud framework, which is designed to help enterprises easily integrate Smart Communications’ customer communications management tools with other key pieces of their technology ecosystem. This approach helps companies operate more efficiently while also improving conversations by providing a more complete view of each customer.

Key among Smart Communications’ latest rollout is Conversation History. This new feature allows deep insight into customer conversations by recording key metadata associated with every communication sent in order to track what, when and how they were sent as well as any related actions taken. Conversation History listens to all outbound communications produced by SmartCOMMTM and stores them in a highly-efficient and scalable repository. It can also ingest events from 3rd party systems, providing even deeper insight. Insight into communications performance can be used to hyper-personalize subsequent communications with specific individuals, or can be aggregated to uncover trends across the business.

“Conversation History is a key piece of our Conversation Cloud framework.

With this new feature, enterprises can better understand the impact of their customer communications and leverage important trends that will help these interactions evolve into even more meaningful conversations over time,” said Simon Tindal, CTO of Smart Communications. “By integrating multiple technologies into a customized ecosystem, customer-centric organizations can collect and act on a tre8 May 28, 2018 / INSURANCE ADVOCATE

mendous amount of valuable customer data and increase internal efficiencies by breaking down silos and unifying the customer conversations being led by multiple groups within a company.

This is precisely why we developed the Conversation Cloud.”

The Spring 2018 release also includes enhancements to Smart Components and other key updates designed to improve the user experience and increase efficiency.

Specifically, Smart Communications has unveiled the following new features: • SmartSearch, a new tenancy-wide search capability, allowing users to search across the entire Smart Communications CMS, view open resources, resource versions, folders and projects from search results.

It supports complex queries, and searches within specific types, date ranges and more.

• Smart Components Expressions, which allow the use of data items and scripting within properties, and can now be used with a user-friendly new control to allow dynamic values to be passed to the Smart Components • New Import functionality, designed to reduce the time it takes to convert a static HTML page to a dynamic Smart Communications layout • New Content Assembly Tree panel

that allows users to quickly locate specific content, save time while building templates, and allowing sections and rules to be located quickly • Project dashboard enhancements, including optimized use of screen real estate • Updates to the Template Editor UI, including visual creation of the current Excel charting capabilities • Advanced scripting functionality with templates, allowing users to

easily create and manage sophisticated template types • D OCX output support for all SmartCOMM and SmartCORR customers, allowing output to the industry-standard DOCX format • Wet Signing capabilities for instances where electronic signatures are not appropriate or possible during a collaboration. Users can now easily download a draft as a PDF, sign offline and then re-upload the executed document.

Smart Communications’ latest release also includes enhancements to SmartCORRTM for Salesforce Enterprise Edition, allowing users to take advantage of multiple projects within SmartCORR – enabling individual projects to have their own sandboxed development and release workflow. In addition to the standard Project Release Workflow, Enterprise Edition customers can use the Project Approval Workflow functionality to allow for projects to be reviewed by other users and groups within the system before release. The Project Approval Workflow also audits all major project actions within a new Project History page.

“This release will help enterprises efficiently deliver meaningful customer conversations at tremendous scale,” added Tindal. “This is our sole focus.”[IA]

Coverages You Need . . . from a Name You Can Trust!

Protecting Your Clients’ Many Interests . . .

Berkshire Hathaway

GUARD

Insurance Companies

Nationwide operations • A+ A.M. Best Rating

We have agency appointments available.

Go to www.guard.com/apply !

Workers’ Compensation • Businessowner’s Policy (Property and Liability) • Commercial Auto* • Commercial Umbrella/Excess • Professional Liability* • Homeowners and Personal Umbrella* • Disability* • and More (*Select States)

[ IN THE NEWS ]

Scott M. Purviance Appointed CEO of AmWINS Group, Inc. u AmWINS Group, Inc. (“AmWINS”) announced that Scott M. Purviance (pictured right) has succeeded M. Steven DeCarlo as the company’s Chief Executive Officer.

As CEO, Purviance will focus on continuing to build upon the firm’s foundation focused on growth, diversification and technology. Prior to taking on his role as Chief Operating Officer, Purviance served as Chief Financial Officer from 2001-2016. He was elected to the Board of Directors of AmWINS Group, Inc. in November 2016.

“Scott is a remarkable leader who is responsible for a great deal of the firm’s success over the last 17 years,” said M. Steven DeCarlo, Executive Chairman of AmWINS Group, Inc. “Scott has the drive, passion and ability to continue executing our 150-year vision.”

DeCarlo, who has served as CEO of AmWINS since its founding in 2001, will remain on the AmWINS Board of Directors in the newly created role of Executive Chairman. W.H. “Skip” Cooper is also transitioning from his current role as President to Vice Chairman of the Board of Directors.

In their new roles, Steve and Skip will continue to focus on certain key growth initiatives for the firm.

“Steve DeCarlo’s vision and leadership can never be replicated,” said Purviance. “Steve has been a mentor, friend and boss throughout the 17 years we have worked together building AmWINS. I am humbled and proud to continue to drive the company forward and am unbelievably excited about the opportunities that lie ahead for AmWINS.” In addition to Purviance’s transition to CEO, the following management changes were also announced, effective immediately: James C. Drinkwater, who currently serves as President of AmWINS 10 May 28, 2018 / INSURANCE ADVOCATE

Brokerage, will succeed C ooper as President of A m W I N S G r o u p, I n c .

Drinkwater will also retain his position as President of the Brokerage division.

Benjamin R. Sloop, who currently serves as President of AmWINS Access, will succeed Purviance as COO of AmWINS Group, Inc. James A. “Tony” Gresham, who has served as COO of AmWINS Access since its establishment, will succeed Sloop as President of the division. [IA]

Enterprise Risk Management, umbrella, and management and professional liability protection.

“By teaming with The Doctors Company, the Chubb Small Commercial Marketplace now offers market-leading solutions for the field of dentistry,” said Jim Williamson, Division President, Small Commercial Insurance, Chubb North America. “This policy offering makes it easier for dental professionals to choose the best business insurance to meet their needs. From state-of-theart equipment to patients’ electronic records, the right insurance coverage can protect their practices in today’s ever-changing dental care environment.”

“The Doctors Company is pleased to work with Chubb to bring unparalleled insurance solutions to dental practices nationwide,” said Richard E. Anderson, MD, FACP, Chairman and CEO of The Doctors Company. “We are committed to providing specialized guidance,

Chubb Adds Dental Malpractice to its Small Commercial® Platform uChubb and The Doctors Company are now offering dental malpractice insurance to dental professionals through Chubb’s Small Commercial Marketplace®. Specifically designed for general dentists, endodontists, oral and maxillofacial surgeons, orthodontists, periodontists, prosthodontists and other dental specialists, the Doctors Company policy provides dental malpractice coverage that also insures against cyberattacks and data breaches, HIPAA violations, and Dental Board and Medicare/Medicaid reviews, and covers dental hygienists and assistants at no additional charge.

Combined with dental malpractice coverage, Chubb’s small business solution offers dental professionals a complete suite of state-of-the art products, including Chubb Business Owner’s Policy (BOP) which contains more than 100 property and liability features and benefits beyond industry standard policies, workers’ compensation, Cyber

“Through our intuitive new platform – the Chubb Small Commercial Marketplace, Chubb offers independent agents access to exceptional insurance solutions – including this new dental malpractice coverage – all in a single quoteto-issue transaction.” resources and coverage so dental professionals can spend more time caring for patients instead of defending their practice.”

Williamson added, “We want our agents to have the best experience possible. Through our intuitive new platform – the Chubb Small Commercial Marketplace, Chubb offers independent agents access to exceptional insurance solutions – including this new dental malpractice coverage – all in a single quote-to-issue transaction.”[IA]

NEW YORK

PAID FAMILY LEAVE

It’s here!

Bonding

Caring

Military Find out what you need to know:

www.newyorkpfl.com Copyright © 2018. ShelterPoint Life Insurance Company | Mktg#18-11 | G1 01/18

N [ GUEST ARTICLE ]

TIMOTHY D. D OD GE

New York Auto Insurance Now Automatically Includes Supplementary Uninsured/Underinsured Motorists Coverage, Per New Law

uLast September, a drunk driver in Syracuse collided with a sedan carrying a 49 year-old man and his adult stepson.

The father died at the scene; the son died a few hours later. The drunk driver carried Bodily Injury (BI) Liability insurance coverage with the state minimum limits of $50,000 for the death of one person, $100,000 for the deaths of multiple people.

The father, who owned the vehicle in which he and his son rode, did not have Supplementary Uninsured/Underinsured Motorists (SUM) coverage. The Syracuse Post-Standard reported that his disabled widow will end up with only $5,000 out of the $100,000. She faces tens of thousands of dollars in funeral and medical expenses. Her husband had a loan on the car that had to be repaid. She fears she may lose her home.

Starting on June 16, New Yorkers who switch auto insurance carriers or who buy a policy for the first time will automatically get financial protection 12 May 28, 2018 / INSURANCE ADVOCATE

STARTING ON JUNE 16, NEW YORKERS WHO

SWITCH

AUTO

INSURANCE

CARRIERS OR WHO BUY A POLICY FOR THE FIRST TIME WILL AUTOMATICALLY GET FINANCIAL PROTECTION AGAINST UNINSURED DRIVERS. A PAIR OF LAWS ENACTED IN THE PAST YEAR WILL REQUIRE INSURERS TO SELL SUM COVERAGE WITH NEW AUTO INSURANCE

POLICIES.

CUSTOMERS

WHO DO NOT WANT THE COVERAGE OR WANT LESS OF IT WILL HAVE TO DELIBERATELY SAY SO.

against uninsured drivers. A pair of laws enacted in the past year will require insurers to sell SUM coverage with new auto insurance policies. Customers who do not want the coverage or want less of it will have to deliberately say so.

Timothy D. Dodge, AU, ARM, CPCU is the Assistant Vice President of Research for Big I New York, headquartered in Dewitt, New York. Tim answers members’ questions about insurance technical, regulatory, and legislative matters, and handles media communications. He also contributes to Big I New York’s website; writes an insurance technical blog; and teaches continuing education classes. He serves on the Big I’s Technical Affairs Committee and the Mid-America Insurance Conference, working with ISO to improve coverage forms. Before joining Big I New York in 2002, he was a commercial lines underwriter and underwriting trainer for CNA Insurance in Syracuse.

The law, signed by Gov. Andrew Cuomo last December and amended earlier this year, applies only to new personal auto policies with effective dates on and after June 16, 2018. It does not apply to renewals of policies first written before then, nor does it apply to commercial auto policies.

Policies covered by the law will automatically carry SUM Coverage with limits equal to the BI Liability limits. Suppose an insured purchases BI Liability limits of $250,000 per person and $500,000 for multiple people. The default SUM limits will also be $250,000/$500,000. Insurers may use umbrella or excess policies to meet the requirement.

The law requires insurers to provide their new insureds with a form that describes SUM coverage. It will tell them that: • Their SUM limits are equal to their BI Liability limits • They may choose to purchase lower SUM limits or reject the coverage altogether

• If they select lower limits or reject the coverage, that decision will apply to all subsequent renewal policies unless they change the decision in writing Insurers must permit insureds to reject the coverage or possibly choose lower limits. A “first named insured” must sign a rejection of coverage or selection of lower limits before it can take effect. “First named insured” means the individual listed first in the policy Declarations or that person’s resident spouse also specified in the Declarations. The form of the rejection or selection can be written or electronic.

A signed rejection of coverage or selection of lower limits binds all insureds under the policy. If Mary Smith selects SUM limits of only $50,000/$100,000, her husband John cannot later argue that he should get the BI Liability limits of $100,000/$300,000.

The law allows insurers to require SUM limits to equal the BI Liability

NEW

YORKERS

WILL

GET

THIS

VALUABLE COVERAGE UNLESS THEY CONSCIOUSLY OPT OUT. THAT MAY WELL MEAN FEWER STORIES OF PEOPLE ENDURING BOTH THE LOSSES OF LOVED ONES AND FINANCIAL RUIN.

limits. Big I New York has heard of at least two insurers doing this. Recent emergency regulations state that these insurers must still allow insureds to reject SUM coverage entirely. If Carrier X requires SUM limits to equal BI Liability limits, John and Mary Smith can either purchase SUM coverage at $100,000/$300,000 (their BI Liability limits) or not buy the coverage at all.

When an insured rejects SUM coverage, the policy must still include Uninsured Motorists (UM) coverage.

UM coverage provides basic limits of $25,000/$50,000. Those limits double

for deaths of one or multiple people.

The law requires insurers to furnish insureds with the notice and waiver form. However, it does not prohibit them from delegating that responsibility to their agents. Agents should expect that insurers will ask them to provide the notices and collect signatures on waiver forms.

Many customers are unaware of SUM coverage. Since several will find themselves automatically buying it, agents and brokers should be prepared to explain its costs and benefits. The story at the beginning of this article would be a good place to start.

This law is temporary. It will expire on June 30, 2020 unless the New York State Legislature extends it beyond that date. Until then, New Yorkers will get this valuable coverage unless they consciously opt out. That may well mean fewer stories of people enduring both the losses of loved ones and financial ruin.[IA] INSURANCE ADVOCATE / May 28, 2018 13

[ GUEST OPINION ]

JANE M. ORIENT, M.D.

Does Your Medical Licensure Board Protect You? uA bill that would give doctors the right to defend themselves if brought before the state licensure board, the Louisiana State Board of Medical Examiners (LSBME), was heard in the Louisiana state House of Representatives on May 2. If it passes, doctors could find out exactly what they’re accused of, see the evidence, and present a defense to an unbiased judge and jury. They are Americans, right? Even terrorists and rapists have these rights.

In fact, a doctor can be delicensed, bankrupted, disgraced, and made unemployable, based on an anonymous complaint that might have come from a disgruntled employee, a jealous competitor, an insurance company that doesn’t want to pay a bill, or a drug addict who wants a lighter sentence for stealing a prescription pad and forging prescriptions.

A board employee functions as investigator, prosecutor, judge, jury, and executioner. The politically appointed

…a doctor can be delicensed, bankrupted, disgraced, and made unemployable, based on an anonymous complaint that might have come from a disgruntled employee, a jealous competitor, an insurance company that doesn’t want to pay a bill, or a drug addict who wants a lighter sentence for stealing a prescription pad and forging prescriptions. members of the board almost always rubber-stamp what the board staff wants. The staff generally controls the flow of information to board members and accused doctors. The doctor has no right to cross-examine accusers, to ask that conflicted or biased staff be recused, or to challenge the evidence

4441 Sepulveda Blvd., Culver City, CA 90230-4847 www.zalma.com | zalma@zalma.com 310-390-4455 | fax: 310-391-5614 | http://zalma.com/blog

Mr. Zalma recently published on Amazon.com with links at the Zalma Books site, with the following: Non Fiction books: • “Insurance Fraud & Weapons to Defeat Insurance Fraud” In Two Volumes • “The Compact Book on Adjusting Liability Claims: A Handbook for the Liability Claims Adjuster” • “The Compact Book on Adjusting Property Claims” • “Ethics for the Insurance Professional” • “Rescission of Insurance” • “The Insurance Examination Under Oath” 14 May 28, 2018 / INSURANCE ADVOCATE

• “Random Thoughts on Insurance Volumes IV and V: Digests from Barry Zalma’s Blog: ‘Zalma on Insurance’” Fiction: • “HEADS I WIN, TAILS YOU LOSE” • “Candy and Abel: Murder for Insurance Money” • “Murder And Insurance Fraud Don’t Mix” • “Murder & Old Lace”

Jane M. Orient, M.D. obtained her undergraduate degrees in chemistry and mathematics from the University of Arizona in Tucson, and her M.D. from Columbia University College of Physicians and Surgeons in 1974. She completed an internal medicine residency at Parkland Memorial Hospital and University of Arizona Affiliated Hospitals and then became an Instructor at the University of Arizona College of Medicine and a staff physician at the Tucson Veterans Administration Hospital. She has been in solo private practice since 1981 and has served as Executive Director of the Association of American Physicians and Surgeons (AAPS) since 1989. She is currently president of Doctors for Disaster Preparedness. Since 1988, she has been chairman of the Public Health Committee of the Pima County (Arizona) Medical Society. She is the author of YOUR Doctor Is Not In: Healthy Skepticism about National Healthcare, and the second through fourth editions of Sapira’s Art and Science of Bedside Diagnosis, published by Lippincott, Williams & Wilkins. She is the editor of AAPS News, the Doctors for Disaster Preparedness Newsletter, and Civil Defense Perspectives, and is the managing editor of the Journal of American Physicians and Surgeons.

against him—which he might not even have seen.

Don’t believe it? Listen to the testimony on SB286, the Physician’s Bill of Rights. (It starts at 1 hr, 34 minutes into the official video.) You’ll hear about doctors who were tops in their field unable practice their profession anywhere. At least six physicians were driven to suicide. A physician’s disabled employee lost her profession and livelihood when the board forced him to fire her. Families were devastated. Doctors were forced to spend tens of thousands of dollars and months in remote in-pa-

[ GUEST OPINION ] tient drug rehabilitation facilities, even though the facilities themselves found that the doctor never had a drug problem.

Most disturbing are the remarks by the opponents of due process rights for physicians, including the Federation of State Medical Boards and Public Citizen, a self-identified consumer advocate group. They did not contradict testimony about abuses. Instead, they asserted that “doctors need to be held to a higher standard” because “patients’ lives are at stake.” There’s an opioid epidemic, and sexual misconduct occurs, and complainants may fear retaliation of some sort if their identity is disclosed.

Therefore, we dare not “tie the board’s hands” and impede their ability to “protect the public against bad doctors.” If the board ruins a few good doctors and even drives some to suicide, so what?

Doctors have “enough” rights, it was claimed. The current executive director of the LSBME read aloud from the board’s policy manual. But despite a legislator’s repeated attempt to get a “straight answer” out of him, he would not say whether one of the doctors who testified could finally get a copy of his own complete file, which he had been requesting for years.

All Americans should be alarmed at the burgeoning power of the administrative state, which is exempt from the limits placed on regular civil and criminal courts.

If doctors can be stripped of their rights, so can you.

The board’s supporters were dismayed at the prospect that a doctor might be able to question an investigator’s objectivity. Witnesses for the bill mentioned, several times, the chief investigator, She-Who-Is-Not-Supposedto-Be-Named, who was formerly also the executive director. She had dismissed thousands of complaints and had been helpful to some doctors, but had ferociously attacked others, who appeared to be exemplary physicians.

So, who should care about a few doctors who might have been treated unfairly?

Doctors thinking of practicing in Louisiana should watch what happens

with this legislation. Young people considering a medical career should be aware that their huge investment of money and years of their life could be wasted at the whim of a powerful official who is immune from any accountability for wrongfully destroyed lives. (The situation is not confined to Louisiana.)

Patients should worry. Thousands of Louisiana patients found themselves suddenly without treatment, and shunned by other doctors who feared being the next pain-management doctor to be cut down. Patients needing an affordable diagnostic test will have fewer choices because an excellent CT scanner and MRI machine were sold to someone in Dubai by a highly competent American doctor delicensed and bankrupted by the LSBME. Sick patients will have to rely more on practitioners with limited training because of the shortage of highly trained, experienced physicians.

All Americans should be alarmed at the burgeoning power of the administrative state, which is exempt from the limits placed on regular civil and criminal courts. If doctors can be stripped of their rights, so can you. Please watch the hearing and see for yourself.[IA]

INSURANCE ADVOCATE / May 28, 2018 15

5 member resources you should check out today WEBINARS High-quality education on demand

TRUSTED CHOICE RESOURCE CENTER Free social media & marketing downloads

HIRING TOOLKITS Everything you need to hire your next top performer

CYBER REGULATION Complete compliance guide & free tools

REMOTE STAFFING Experienced, reliable team members

Contact Jamie Deapo jdeapo@biginy.org 800.962.7950 ext. 232 BigINY.org/join

TOGETHER WE ARE BIG I NEW YORK.

16 May 28, 2018 / INSURANCE ADVOCATE

Introducing the Big I New York DIY Hiring Toolkit Your start-to-finish guide to hiring great talent.

You need to hire someone exceptional...and you want to do it yourself. We’ve developed the perfect resource to help.

Big I New York’s DIY Hiring Toolkit guides you through the entire hiring process from preparing & launching your search, through screening and ultimately hiring & onboarding your next great team member.

We’ve worked extensively with a top HR firm and a focus group of well-respected and high-performing agency employees to develop the right resources for each specific insurance agency role.

These tools and full toolkit don’t only explain how, they include customizable downloads to get you on track in minutes.

• • • • •

Commercial Lines CSR Personal Lines CSR Personal & Commercial Lines CSR Commercial Lines Producer Personal Lines Producer

Learn more: BigINY.org/diyhiring

YOU BELONG WITH BIG I NEW YORK. Big I New York is THE trade association for independent insurance agents and brokers in New York.

Contact Kathy Lawler klawler@biginy.org 800-962-7950 ext. 218 BigINY.org/diyhiring

Rebecca Hunt is a senior risk manager with AIG Private Client Group, a division of the member companies of American International Group, Inc. (AIG). She is an accomplished horseperson who has been riding and working with horses for over forty years. Her multidiscipline skills include training young horses, Welsh ponies, show hunters, jumpers, equitation, and fox hunting. She has her own farm where she enjoys caring for her horses, as well as maintaining and developing the facilities.

STOP THE PRESS: Tragic Fire Finds 20 Horses Dead.... The importance of our feature article was underlined by the tragic fire—whose cause is under investigation­—that killed 20 horses at an Orange County location on June 2nd. For details on the fire see various reports, June 3rd.- Ed.

Before we can effectively rein in equine risk (pun intended), we need to understand common horse behaviors and management practices that play a vital role in their safety when natural disasters strike.

18 May 28, 2018 / INSURANCE ADVOCATE

Horse Sense Averts Exposures, Disasters

BY REBECCA HUNT

1 Jonah Engel Bromwich, “Dozens of Horses Killed as Fires Tear Through California,” 8 Dec 2017, https://www.nytimes.com.

2 Pat Raia, “Horse Community Rallies While California Wildfires Rage,” 16 Oct 2017, http://www.thehorse.com.

3 NOAA NCEI, “US Billion-Dollar Weather and Climate Disasters,” 2018, https://www.ncdc.gov/billions/.

uRecent weather catastrophes in the US have had devastating impacts on horses and horse properties.

Hurricane Harvey affected hundreds of horses in the Houston area due to the storm itself and subsequent flooding. In December 2017, twenty-five racehorses were killed when a wildfire engulfed eight barns at a training center in California.1 Conversely, more than five hundred horses were safely evacuated during the October 2017 wildfires in California.2 During three-weeks in March 2018, four Nor’easters pounded the east coast making caring for horses challenging, as several feet of snow and downed trees needed clearing, and millions of properties were without power.

In 2017 through the first quarter of 2018, nineteen US weather and climate disaster events caused damage in excess of one billion dollars per occurrence.3 Thus, it’s no surprise that a recent AIG Private Client Group-sponsored INSURANCE ADVOCATE / May 28, 2018 19

survey of horse owners, riders and trainers revealed a strong desire for disaster preparedness education.

Historically, it’s been an uphill battle to convince consumers to embrace the merits of preparedness.

This attitudinal shift presents a real opportunity for our industry to change that behavior for the better.

Lisa Lindsay, Executive Director of the Private Risk Management Association, agrees that recent events highlight why we must continue to educate consumers about the benefits of preparing in advance.

With that in mind, the following are practical insights about natural disaster preparedness for horse owners, but many of the underlying principles apply more broadly to overall best practices for equine risk management. Share this information with your clients, and encourage them to consider aspects of their lifestyle that warrant up-front planning. Being there for your clients means recognizing what matters most to them—whatever that may be—and helping them proactively take steps to maximize safety.

GENERAL CONSIDERATIONS AND TIPS

Many of the following preparedness tips have similarities to protecting houses or works of art, but there are even more things to consider when live

20 May 28, 2018 / INSURANCE ADVOCATE

Establish both evacuation and shelter-in-place plans.

Geographic considerations should guide planning and may make one more feasible than the other during an event.

animals are involved. In addition, horses require more consideration because of their size, character and associated transportation needs. Before we can effectively rein in equine risk (pun intended), we need to understand common horse behaviors and management practices that play a vital role in their safety when natural disasters strike.

•H orses have flight instincts and scare easily. With any weather involving wind or atypical conditions, even the calmest ones can change into scared, panicked beasts who are difficult to handle and are at an increased risk of injuring themselves and others around them.

•H orses are herd animals and are most comfortable in the companionship of other horses. It’s important to know; however, that not all get along – just like people and other animals. So in an emergency situation, keeping the troublesome ones separated from others they may harm should be done whenever possible.

•H orses are trained to be led from their left side. They wear a halter on their head, and the lead rope is clipped onto it. Halters are made of leather or nylon.

In potential fire exposures, it is important to remove any halters made of nylon, because they can melt on the horse’s head.

•H orses are transported on horse trailers, often in the gooseneck and pickup truck configuration. Some young horses don’t know how to lead well so they may be hard to move to certain areas or get on a trailer.

Even mature horses who haven’t left the farm in a while may not easily load on a trailer, so it is strongly recommended to practice loading them periodically, especially if you live in a CAT prone area with the potential to need to evacuate. Most horse properties have more horses than the capacity of the horse trailer, so a priority list is important, as well as the potential and time for multiple evacuation trips.

•M ost horses live in a stall in a barn and get several hours out daily in a field or paddock. Some live out all the time with a run-in shed as shelter from the weather. With shelter-in-place rather than evacuation scenarios, decisions need to be made about where the safest place would be for the horses to weather the

storm--depending on their regular routine and the ability of the barn and fencing to withstand the storm.

• All horses need access to fresh water, dry ground and the ability to move around. Adequate water and movement keep their digestive tract working properly and lack of it can make them sick, even enough to take their life. So, in thinking about conditions brought on my natural disasters, horses’ lives could be threatened if they don’t have these basic requirements.

• For food, some horses can live on just grass, but most are fed a grain in the morning and evening, hay multiple times throughout the day, and many need medicine or special health supplements. Having adequate food and supplies on hand when storms strike is critical, because there may be a delay in availability to get more.

• Horses often wear blankets or sheets to keep them warm and dry. This point, similar to the halters, relates to a wildfire situation because it is important to remove them so they don’t melt on the horse. It is also important to remove them during major flood situations because they can weigh the horse down and potentially cause drowning.

PRE-EVENT PLANNING

Harm cannot always be avoided, but we aren’t helpless.

Effective natural disaster response and recovery starts with a written preparedness plan so that everyone involved knows what to do before, during and after an event.

• Plan for the events that are common in the area (hurricanes, floods, wildfires, blizzards, etc.), but also

recognize what’s possible. For example, you don’t have to live in a high hazard flood zone to suffer a flood.

• E stablish both evacuation and shelter-in-place plans.

Geographic considerations should guide planning and may make one more feasible than the other during an event.

• Keep two copies or more of your natural disaster plan in an easily accessible location.

• Review evacuation and shelter-in-place plans often with those who will assist with the horses and/or staff.

Update plans with new resources, different horses, etc.

•P repare emergency care kits for at home and away.

Suggested items include spare halters, lead ropes, medications, first aid supplies, feed, hay and water.

•G ather basic documentation (pictures, Coggins test paperwork, microchip ID, etc.) and place them in an accessible location. This will be particularly helpful if you need to evacuate horses across state lines or identify your horse after an event. ...

INSURANCE ADVOCATE / May 28, 2018 21

EVACUATION PLANNING

Even if the preference is to shelter in place, there are too many circumstances that could change the plan.

Always assume that evacuation is a possibility.

• Formalize evacuation plans, including routes and access to other horse facilities near and outside the local area that can accommodate the horses. Identify alternate routes if regular routes are impassible.

• Keep identification documents, health certificates and an emergency care kit in an accessible place. Be sure to know when health certificates must be obtained from the vet before trailering horses across certain state lines.

• Evaluate trailering capacity and amount of supplies for the number of horses. Practice horse loading on trailers, especially if the animals have not traveled recently.

• Have evacuation equipment and supplies ready including trailers, trucks and fuel. Fuel is important on a regular basis and critical during catastrophic events when resources (especially diesel) can be scarce.

• Write down evacuation priorities in advance; it will help all involved navigate difficult decisions during an emergency event.

SHELTER-IN-PLACE PLANNING

Staying put requires forethought as well. Formalize shelter-in-place plans and: • Stock up on adequate supplies.

22 May 28, 2018 / INSURANCE ADVOCATE

•K eep identification documents, health certificates and the emergency care kit in an accessible place. Horses may get loose during the event, so it is important to plan how they can have identification on them when possible.

•P repare signs that can be used to communicate your on-site status to emergency personnel.

•H ave on-site equipment ready for snow clearing, debris removal, generating power, etc. Trailering capabilities may also be needed post-event if conditions are not safe to remain in place, such as horses in standing water for prolonged periods.

DURING AND AFTER AN EVENT

When it’s time to put your plans into action, it’s understandably critical to be nimble. Mother Nature has her own agenda, and even the most calculated emergency preparedness plans will require some deviation.

• Contact and organize your local network/community when a natural catastrophe has been forecasted. Use social media to connect with equine evacuation and assistance groups. These are great ways to share best practices and stay informed about conditions.

• When evacuating, confirm the temporary facility you’ve previously identified is available and leave as soon as possible. Be aware of local laws, as in some areas it is illegal to transport large animals when a hurricane warning is in effect.

• Follow your plan for where the horses will be safest– in the barn or out in a fenced area. If not in the barn, close the barn and stall doors after horses are out, because they are creatures of habit and will reenter a barn if allowed, even if conditions are unsafe. Be prepared to function with a lack of electricity for well pump and lights. Keep horses fed and safe. Take precautions to safeguard human life, and consider that horses can harm people when scared.

• As soon as it’s safe to do so, display signs at the front of your property to share your status with emergency personnel. Carefully clean out debris, being on the lookout for downed electric wires and hazardous objects blown into the area.

• When “digging out” after an event, include access to barn and turnout areas. Make repairs and adjustments to damaged barns and fields. Remember, lack of electricity, extensive barn damage and flooding may require post-storm evacuation.

EVERYDAY PREVENTION

Do a physical hazard assessment of the property to help decrease the potential damage during a storm, emergency situation, and year round. Some key things to look for include: • Pay close attention to electrical systems, keeping them updated and ideally in metal conduit.

• Manage appropriate storage of fuel and combustibles, including paint, solvents and hay. Hay is not only

highly flammable, so it can provide a large fuel load for a fire, but it can spontaneously combust if not properly baled and dried. That is why storing hay in a separate, well-ventilated building away from where the horses are stalled is preferred.

•K eep brush cleared and maintain no overhanging trees by the barn to help avoid fires and damage.

ELEVATING YOUR ROLE AS AN ADVISOR

Be proactive – reach out to your clients now, not when the next headline-making weather event is upon us.

Encourage clients to think through priorities and anticipate tough decisions at a time when they can consider their choices carefully and rationally. When done in advance, it also allows you time to offer guidance, make introductions to additional specialists and ultimately reinforce your value in their lives. Ask what emergency preparedness plans they have in place for each property location. Are they maintaining adequate equipment and supplies, particularly in the face of disasters that won’t come with a multi-day warning? Is there an emergency plan in place, and when was it last updated and communicated to key people?

When was the last physical hazard assessment completed?

What fire prevention efforts do they use today?

Further your own education by getting involved in trade associations that celebrate the importance of ongoing professional development. One example is the Private Risk Management Association (PRMA), which offers classes and webinars throughout the year to help you stay current on risk trends and related solutions.[IA] INSURANCE ADVOCATE / May 28, 2018 23

[ ON MY RADAR ]

BARRY Z ALMA

No Good Deed Goes Unpunished Fourth Circuit Stops Asbestos Bleeding After Aggregate Limit is Exhausted u Asbestos litigation has destroyed multiple businesses who dealt with the product. Insurers of those entities have spent billions of dollars defending and indemnifying those insureds who dealt with asbestos. Some insurers who insured the asbestos producers were made insolvent.

Many asbestos claims were established to be false and fraudulent. Regardless, insurers defended and indemnified their insureds up to the limits of liability of their policies. Unsatisfied, insureds attempted to get courts to ignore the terms and conditions of their insurance policies, and sought defense and indemnity without limit claiming any refusal to defend by an insurer to be bad faith tortious conduct.

In General Insurance Company Of America, Plaintiff, The Walter E. Campbell Company, Inc. Defendant and Third Party Plaintiff – Appellant, v. United States Fire Insurance Company; St. Paul Fire & Marine Insurance Company, and National Indemnity Company; Federal Insurance Company; Crum & Forster Corporation; Pennsylvania Manufacturers Association Insurance Company; The Continental Insurance Company, Defendants, The Hartford Financial Services Group, Inc., The Travelers Indemnity Company; Property & Casualty Insurance Guaranty Corporation, No. 17-1585, United States Court Of Appeals For The Fourth Circuit, (March 26, 2018) the applicability of two insurers’ policies to past, pending, and future asbestos-related bodily injury claims against the Walter E. Campbell Company (“WECCO”) was taken to the Fourth Circuit. The insured. WECCO appeals several rulings by the U.S. District Court for the District of Maryland against WECCO and in favor of United States Fire Insurance Company (“U.S. Fire”) and St. Paul Fire & Marine Insurance Company (“St. Paul,” and collectively with U.S. Fire, the “Insurers”).

24 May 28, 2018 / INSURANCE ADVOCATE

Unsatisfied with our precedent and the effect it would have on its cause of action, WECCO asked the Fourth Circuit to either consider these questions anew or certify them to the Maryland Court of Appeals.

ISSUE

The main questions at issue in this appeal—concerning both the scope and limit of the Insurers’ duties to defend and indemnify WECCO—were answered over a decade ago by the Fourth Circuit in In re Wallace & Gale Co., 385 F.3d 820, 833-34 (4th Cir. 2004). Unsatisfied with our precedent and the effect it would have on its cause of action, WECCO asked the Fourth Circuit to either consider these questions anew or certify them to the Maryland Court of Appeals.

Even though WECCO’s insurers paid, over the years, more than $60 million on WECCO’s behalf, WECCO was not satisfied and sought declaratory relief because many claims against WECCO remain pending. The Insurers now contend that, based on the aggregate liability limits set forth in their policies with WECCO, they no longer are contractually obligated to defend and indemnify WECCO against such claims.

FACTS

For decades, WECCO—a now-defunct Maryland corporation—handled, sold, installed, disturbed, and removed insulation materials containing asbestos.

By 1972, WECCO ceased the sale and use of asbestos-containing products in its operations.

The policies first provides that it “applies only to bodily injury . . . which occurs

Barry Zalma, Esq., CFE, has practiced law in California for more than 42 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes.

He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. Look to National Underwriter Company for the new Zalma Insurance Claims Library, at www. nationalunderwriter.com/ZalmaLi brary. The new books are Insurance Law, Mold Claims Coverage Guide, Construction Defects Coverage Guide and Insurance Claims: A Comprehensive Guide.

The American Bar Association, Tort & Insurance Practice Section has published Mr. Zalma’s book “The Insurance Fraud Deskbook” available at http://shop.americanbar.org/eBus/ Store/ProductDetails.aspx?produc tId=214624, or 800-285-2221 which is presently available.

Legal Disclaimer: The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

[ ON MY RADAR ] during the policy period.” J.A. 938 (emphasis added). The policy further provides that: “[t]he Company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury . . . to which this insurance applies, . . . arising out of the ownership, maintenance or use of the insured premises and all operations necessary or incidental to the business of the named insured conducted at or from the insured premises . . . , but the Company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the Company’s liability has been exhausted by payment of judgments or settlements.” (emphasis added).

Not all claims are subject to the same “applicable limit,” however. In particular, the policy imposes an aggregate limit on the insurer’s obligation to indemnify WECCO for claims that fall within the completed-operations and products hazards.

Claims involving bodily injuries that fall under the completed-operations and products hazards are subject to an aggregate limit. Every dollar the insurer pays out to indemnify WECCO against such claims counts against the policy’s aggregate limit. Once the aggregate limit is reached, the insurer is no longer obligated to defend and indemnify WECCO for completed-operations and products hazard claims. On the other hand, operations claims—that is, bodily injury claims that do not constitute completed-operations or products hazards—are subject only to a “per occurrence” limit, meaning that there is no aggregate limit on the insurer’s obligation to defend and indemnify WECCO against operations claims.

In 2003, the Insurers notified WECCO that the aggregate limits contained in the primary policies issued to WECCO had exhausted and that, as a result, the Insurers were no longer obligated to defend or indemnify WECCO under these policies. Regardless, the Insurers continued to defend and indemnify WECCO under their umbrella/ excess policies until U.S. Fire stopped in January 2009—after notifying WECCO that it had fully exhausted the aggregate limits contained in its umbrella/excess policies—and St. Paul stopped in June 2013—after doing the same.

In March 2017, the district court

granted summary judgment to the Insurers. In so doing, the district court resolved several dispositive issues relevant to this appeal. The district court declared that St. Paul’s indemnity payments for several claims alleged by WECCO to be mischaracterized were in fact properly characterized as completed-operations claims and thus subject to the aggregate liability limits for such claims. In rendering this decision the district court relied on its finding, based on the “undisputed” evidence, that WECCO had ceased all asbestos-related operations by 1972—years before any of St. Paul’s policies issued.

The district court also declared that the aggregate limits of St. Paul’s policies had been exhausted by the payments of those claims. In the alternative, the district court determined that the applicable three-year statute of limitations barred almost all of WECCO’s breach-of-contract claims against the Insurers.

ANALYSIS

WECCO’s argument amounts to an attempt to re-litigate this Court’s holding in Wallace & Gale. There, this Court applied Maryland law and interpreted the terms of various insurance policies issued to the Wallace & Gale Company—a company that, like WECCO, for decades supplied and installed asbestos-containing insulation materials. And, like WECCO, the plaintiffs in Wallace & Gale argued that, under the policies’ terms, any claims due to asbestos-related bodily injuries that first arose during Wallace & Gale operations were properly classified as operations claims—regardless of whether Wallace & Gale had completed operations before the policies were issued. Therefore, such claims were not subject to aggregate limits. By contrast, the insurer-defendants argued that, if a policy took effect only after a bodily injury-causing operation was completed, then a claim brought under that policy due to the completed operation should be treated as a completed-operations claim, subject to that policy’s aggregate limit.

WECCO concedes that the definition of a “completed operations” claim in its policies with the Insurers is substantively indistinguishable from the definition of that term in Wallace & Gale. Accordingly, under Wallace & Gale, “the insurers who issued general liability policies to

[WECCO] for time periods wholly after [WECCO] completed its asbestos installation work”—like the policies issued by the Insurers to WECCO—”will only be liable to the extent of the aggregate limit contained in the policy.”

The Fourth Circuit found no reason to depart from Wallace & Gale’s clear and controlling interpretation of the completed-operations hazard. Accordingly, it concluded that the district court correctly declared that any bodily injury claim based on an injury that occurred during a WECCO operation that completed prior to the start of a policy falls within the completed-operations hazard of that policy.

As the district court recognized, WECCO did not allege that the Insurers breached their contracts with WECCO by refusing to defend or indemnify WECCO against any particular claims alleging asbestos-related bodily injury. To the contrary, WECCO alleged that the Insurers “breached their obligations under their policies” by their “improper allocation of settled operations claims as settled completed operations claims.” In determining at which point a cause of action begins to accrue, Maryland courts abide by “the discovery rule, which now applies generally in all civil actions, and which provides that a cause of action accrues when a plaintiff in fact knows or reasonably should know of the wrong.” Hecht v. Resolution Tr. Corp., 635 A.2d 394, 399 (Md. 1994).

Here, WECCO was aware of the way in which the Insurers were classifying the claims they paid on behalf of WECCO since at least 2003 (with respect to the primary policies issued to WECCO) and 2009 (with respect to U.S. Fire’s umbrella policies).

ZALMA OPINION

WECCO, no longer in existence, obtained more than $60 million in indemnity and defense costs from its various insurers with good grace and skill. The amounts paid out by the insurers probably exceeded the premiums paid by ten to one thousand fold. Yet, when the limits were exhausted in accordance with precedent WECCO still sued the insurers to get more. By causing the insurers to pay lawyers to defend this action they punished the insurers for their good deeds taking care of hundreds of suits.[IA] INSURANCE ADVOCATE / May 28, 2018 25

[ LOOKING BACK ]

INSURANCE ADVO CATE - 23 YEARS AGO

26 May 28, 2018 / INSURANCE ADVOCATE

INSURANCE ADVO CATE - 23 YEARS AGO

[ LOOKING BACK ]

Serving New York, New Jersey, Pennsylvania and Connecticut Since 1889

insurance-advocate@cinn.com | www.insurance-advocate.com INSURANCE ADVOCATE / May 28, 2018 27

[ COURTSIDE ]

LAWRENCE RO GAK

Address Error on IME Letter to Claimant Doesn’t Matter if Letters Also Went to Claimant’s Lawyer In the Matter of the Arbitration between: Right Choice Supply, Inc. and Unitrin Advantage Insurance Company Edited by Lawrence N. Rogak This case stems from a motor vehicle collision which occurred on November 14, 2015 wherein the EIP, (hereinafter referred to as “TC”), allegedly sustained injuries. Applicant seeks compensation for the provision of a CPM and CTU, from February 23, 2016 through May 30, 2016. Respondent denied the claim on the ground TC failed to appear for scheduled Independent Chiropractic Examinations. Another issue to be addressed is respondent’s ‘lack of coverage’ defense premised upon an alleged ‘founded belief ’ the accident was staged and, consequently, not a covered incident.

The case was initially assigned to Arbitrator Paul Keenan. In his Award, the issue presented was: “Whether applicant is entitled to payment for CPM and CTU despite denials based on failure to appear for IME.” Arbitrator Keenan’s Award, dated December 4, 2017, favored applicant. Specifically, Arbitrator Keenan determined respondent mailed IME scheduling letters to the EIP, “TC” at an improper address. More to the point, he determined the scheduling letters had the wrong Zip Code. Based on the foregoing, Arbitrator Keenan concluded respondent did not substantiate its IME no-show defense. Arbitrator Keenan’s Award also notes at the hearing respondent argued that TC breached a condition precedent to coverage by failing to sign and return his EUO transcript. The Arbitrator was not persuaded by respondent’s argument Resp ondent f i le d for Master Arbitration and the matter was assigned to Master Arbitrator Anne L. Powers. The issue, as framed by the Master Arbitrator: “Was the NFA’s deci28 May 28, 2018 / INSURANCE ADVOCATE

ANOTHER ISSUE TO BE ADDRESSED IS RESPONDENT’S ‘LACK OF COVERAGE’ DEFENSE PREMISED UPON AN ALLEGED ‘FOUNDED BELIEF’ THE ACCIDENT WAS STAGED AND, CONSEQUENTLY, NOT A COVERED INCIDENT.

sion to award benefits to the applicant, despite respondent’s denial based upon the EIP’s failure to attend an IME, arbitrary, capricious and incorrect as a matter of law …” Master Arbitrator Powers concluded Arbitrator Keenan’s Award “deserved reversal.”

She specified what aspects were to be heard before a new Arbitrator: (1) Respondent’s claim Arbitrator Keenan misapprehended the established facts with respect to the IME defense; and (2) Respondent’s claim Arbitrator Keenan failed to follow established law based on the claimant’s failure to subscribe his EUO testimony.

According to Master Arbitrator Powers, Arbitrator Keenan committed reversible error by not considering respondent’s defense based on a founded belief the alleged injuries and subsequent treatment were not related to an insured incident, which would be considered a non-covered event under the No-Fault Regulations. She indicated: “The Arbitrator failed to acknowledge respondent’s lack of coverage defense.”

DETERMINATION

Issue #1: Consequence of Failure to Sign/Return EUO Transcript Respondent’s position the EIP breached a condition precedent to coverage because he failed to sign and re-

Lawrence N. (“Larry”) Rogak has been practicing insurance law since 1981.

He has defended over 23,000 lawsuits and arbitrations and has represented over 75 different insurance companies and self-insured corporations.

Lawrence N. Rogak LLC is listed in Best’s Recommended Insurance Attorneys, a distinction that requires written recommendations from at least 12 insurance carriers.

A 1981 graduate of Brooklyn Law School, Mr. Rogak has published more books and articles on insurance law than any other New York attorney in the field.

turn his EUO testimony is unpersuasive.

The failure of the EIP to sign and return an EUO transcript is not a breach of condition precedent because in accordance with the Appellate Division Second Department and CPLR 3116 (a)- If the witness fails to sign and return the deposition within sixty days, it may be used as fully as though signed.

A d d i t i o n a l l y, I n C i t y C a r e Acupuncture, P.C. v. Hereford Ins. Co., 54 Misc.3d 131 (A), 2017 N.Y. Slip Op. 50037(U) (App. Term 2d, 11 & 13 Dists.

Jan. 5, 2017) the Court held that an EUO transcript is properly considered if certified, even if it is not signed by the person examined. #2: IME “NO-SHOW” Defense Respondent provided the IME scheduling letters, dated December 29, 2015 and January 19, 2016. The IMEs were scheduled before chiropractor, Glenn Berman, for January 13, 2016 and February 10, 2016, respectively. Each letter was sent to the EIP

[ COURTSIDE ] at 1459 5th Avenue [apartment number omitted to protect privacy of EIP] 10033. The letters were also addressed to the law firm of Mitchell Klafter, P.C. Respondent submitted sufficient proof of the fact the EIP failed to appear for the IMEs as scheduled. Specifically, respondent provided the affidavit of Dr. Berman, who affirmed as to his personal knowledge the EIP failed to appear as scheduled.

The issue of significance here is whether the evidence provided by respondent is sufficient to establish proof of timely and properly mailing the IME scheduling letters. I have reviewed the evidence, and agree with Arbitrator Keenan that the IME scheduling letters were mailed to an incorrect address. Respondent submitted an affidavit from Deborah Chambers, an employee of its vendor retained to schedule and monitor IMEs. Therein, Ms. Chambers confirms the IME scheduling letters were mailed to the EIP at his address, with the Zip Code of 10033, “… the Assignor’s address as provided to the insurer.” Despite her claim to the contrary, there is no evidence whatsoever the EIP provided the ‘10033’ Zip Code.

In fact, the EIP’s residential address is within Zip Code 10035, as confirmed upon review of the AR-1; NF-3; Police Accident Report; Applicant’s Delivery Receipt; and most significantly by the EIP himself at his EUO conducted on February 3, 2016. Respondent has not come forward with any evidence to show it used the correct Zip Code.

In summary, the evidence establishes respondent mailed the IME scheduling letters to the EIP at an incorrect address.

While Arbitrator Keenan ceased his analysis upon finding the respondent mailed the IME scheduling letters to the EIP using the wrong Zip Code, I have reviewed the evidence and find the inquiry should not have stopped at that point. Indeed, as noted above, each IME scheduling letter was also sent to the law firm of Mitchell Klafter, P.C. Neither the No-Fault Insurance Law nor the regulations promulgated thereunder specify the manner in which a request or notice is be given. It has been held that mailing pleadings to a party’s attorney did not constitute valid service when there was no evidence that the party

authorized the attorney to accept such pleadings. (Broman v Stern, 172 A.D.2d 475 [2d Dept 1991].)”

So the question becomes, did the law firm of Mitchell Klafter, P.C. represent the EIP in relation to his no-fault claim? One cannot find the answer to that question in the form of an attorney’s letter of representation, as the record before me contains no such letter. That said, I find sufficient evidence from which to infer Mitchell Klafter, P.C. was indeed authorized to, and did, represent the EIP in pursuit of his nofault claim. To start with, respondent’s IME scheduling letters (dated 12/29/15 & 1/19/16) were both copied to the law firm of Mitchell Klafter, P.C. The Global Denial, terminating benefits based on the EIP’s failure to appear for IMEs, was copied to the law office of Mitchell Klafter, P.C. Finally, the EIP testified at an examination under oath on February 3, 2016, and the EUO transcript confirms his counsel was Mitchell Klafter, P.C. As such, it is clear the law office of Mitchell Klafter, P.C. represented the EIP on no-fault matters. The IME scheduling letters were mailed to the EIP’s attorney, and I find as agent to the EIP the attorney was authorized to receive same. In matters involving insurance claims, where the insurer has been apprised that a claimant has counsel, appellate court decisions hold that statutory notices to the claimant may properly be sent to “the claimant’s attorney, rather than to the claimant personally.”

See Excelsior Insurance Company v.

Antretter Contracting Corp., 262 A.D.2d 124, 127, 693 N.Y.S.2d 100 (1st Dept 1999); see also St. Vincent’s Hosp. v. Am. Tr. Ins. Co., 299 A.D.2d 338, 339-340, 750 N.Y.S.2d 98 (2d Dept 2002).

The respondent’s mailing affidavit also confirms proof of mailing the IME scheduling letters to the EIP’s attorney. Applicant has come forward with no contrary evidence. Sufficient proof of mailing and proof of the “noshows” having been provided, I find the evidence establishes a breach of a condition precedent to coverage. I find respondent substantiated the basis for its denial on the ground the EIP failed to appear for scheduled IMEs, and as such, this claim is denied in its entirety.

Issue #3: Did Respondent Have

“Founded Belief” Accident Was Not A Covered Event As noted earlier in this Award, respondent’s position the collision was not a covered incident was made by respondent for the first time at the hearing before Arbitrator Keenan. This was the position of respondent that Master Arbitrator Powers suggested was not entertained by the lower Arbitrator. At the hearing before me, I presented respondent’s counsel with a series of questions so as to confirm what, precisely, respondent was asserting. Respondent’s counsel confirmed respondent’s position it had a founded belief the subject collision was staged and, consequently, was not a covered event.

“The defense of lack of coverage premised on an intentional collision or a staged one need not be timely asserted in a Form NF-10 denial of claim. Central General Hospital v. Chubb Group, 90 N.Y.2d 195, 659 N.Y.S.2d 246 (1997).

In other words, where such a defense is asserted by a No-Fault insurer, it is not held to compliance with the 30-day Deadline prescribed by Insurance Law Section 5106(a) and 11 NYCRR 653.8(a)(1) for paying or denying a bill for health care services. Thus, even though respondent’s denials did not specifically state that the loss was not an accident for which there was coverage, it is legally irrelevant. “An insurer may assert at any time that the accident arises from an insurance fraud scheme or that the alleged injury was not caused by an insured incident and is therefore not covered under [the subject] policy” Vital Points Acupuncture, PC v. New York Central Mutual fire Insurance Co., 6 Misc.3d 1031(A), 800 N.Y.S.2d 358 (Table), 2005 N.Y. Slip Op. 50267(U) at 2, 2005 WL 515601 (Civ. Ct. Kings Cty., Bluth, J., Mar. 3, 2005).

No-Fault insurance policies only cover vehicular accidents. An accident is, by definition, unintentional; a deliberate collision is not an accident.

Therefore, damages resulting from a deliberate collision are not covered by nofault insurance. V.S. Medical Services, PC v. Allstate Insurance Co., 11 Misc.3d 334, 338, 811 N.Y.S.2d 886 (Civ. Ct. Kings Co. 2006), aff ’d 25 Misc.3d 39, 889 N.Y.S.2d 360 (App. Term 2d, 11th CONTINUED ON PAGE 30 INSURANCE ADVOCATE / May 28, 2018 29

[ COURTSIDE ] CONTINUED FROM PAGE 29

& 13 Dists. 2009). Where a collision is staged - rather than being an accident it is irrelevant whether the collision was staged in furtherance of an insurance fraud scheme or was deliberately caused under some other circumstances.

If the incident was a deliberate act, it would not be covered. However, unsubstantiated hypotheses and suppositions are insufficient to raise a triable issue of Assignor’s fraud. A.B. Medical Services PLLC v Eagle Insurance Co., 3 Misc.3d 8. That said, an insurer’s evidence of a purposeful collision will often be circumstantial. In the absence of a confession from one of the participants, the arbiter of the facts must examine the facts and circumstances of the incident to determine whether they give rise to an inference of a staged collision.

Circumstantial evidence is sufficient if a party’s conduct may be reasonably inferred based upon logical inferences to be drawn from the evidence.

Fraud in No-Fault cases may be proven by circumstantial evidence.

‘Circumstances insignificant in themselves may acquire probative force as links in the chain of circumstantial proof.’ A.B. Medical Services, PLLC v. State Farm Mut. Auto. Ins. Co., 7 Misc.3d 822-828, 795 N.Y.S.2d 843, 849 (Civ. Ct. Kings Cty. 2005). The strength of inferences of fraud must be measured by common sense and the logic of common experience itself.”

While there is not much evidence tending to indicate an intentional collision on the part of the EIP, what there is, in my view, simply defies common sense and raises genuine questions regarding the validity of the loss and subsequent medical treatment. There were three (3) occupants of the insured vehicle, the driver, “TC”, the front seat passenger, “DA” and the back seat passenger, “XH”.

The following is some of the noteworthy testimony: - XH did not know her own home address; - X H claimed the driver, TC, was like a brother to her boyfriend, DA, and like a brother to her as well, yet she did not know his first name. Moreover, TC testified he did not know XH well and never met her before the date of the accident; 30 May 28, 2018 / INSURANCE ADVOCATE

- XH and DA testified TC exited the vehicle at the scene after the accident, whereas TC testified he did not exit his vehicle; - XH testified TC drover his vehicle away from the scene after the accident, and took her and DA back to DA’s home. However, TC testified after the accident his son arrived to the scene and drove TC back home in TC’s vehicle, but that XH and DA remained at the scene; - X H and DA did not know the make, model or color of the vehicle in which they were occupants at the time of the accident; - XH testified all three occupants first went to dinner at a buffet, but then went back to DA’s home. She testified at some point it was decided the three would drive to DA’s niece and the accident occurred on the way to DA’s niece. However, TC and DA both make no mention of visiting the niece of DA and, in fact, both testified the accident occurred immediately after leaving the buffet dinner on their way back to DA’s home; - XH treats four times per week, yet could not recall the name of the clinic, address or names of any providers; - TC testified he was walking down the street one day and stumbled upon the clinic where he treats, whereas XH testified she knew of the clinic prior to the accident and after the accident told both TC and DA about it; - DA had little to no knowledge of the treatment he had received. *** These factors, combined, give rise to an inference of a staged collision, leading me to find that Respondent did possess a ‘founded belief ’ that the alleged injuries in this case did not arise out of a covered insured accident. See, Central General Hospital v. Chubb Group.

While they might be considered circumstantial, they are compelling in leading one to objectively believe that the subject loss was a staged collision.

A claimant’s prima facie showing establishes a presumption of coverage, and the burden of going forward on the issue

of coverage falls upon the insurer; once the insurer comes forward with proof for its belief that the claimed loss was a staged accident, the burden shifts to the claimant to prove coverage by a preponderance of the evidence. New York Massage Therapy, PC v. State Farm Mutual Insurance Co., 14 Misc.3d 1231(A), 836 N.Y.S.2d 494 (Table), 2006 N.Y. Slip Op. 52573(U), 2006 WL 4057169 (Civ. Ct., Kings Cty., Sylvia G. Ash, J., Dec. 22, 2006). Respondent here met its prima facie burden of coming forward with persuasive proof for its objective founded belief that the claimed loss was a staged accident. The burden shifted back to applicant to prove coverage by a preponderance of the evidence. Applicant here failed to meet its burden.

Based upon the evidence submitted for review, I find respondent did possess a founded belief the collision was not a covered event. Respondent is relieved from having to pay No-Fault compensation under the subject insurance policy.

CONCLUSION

For all of the foregoing reasons, set forth in issues 2 & 3, above, the within arbitration claim is denied in its entirety.

I find as follows with regard to the policy issues before me: - The policy was not in force on the date of the accident - The applicant was excluded under policy conditions or exclusions - The applicant violated policy conditions, resulting in exclusion from coverage - The applicant was not an “eligible injured person” - The conditions for MVAIC eligibility were not met - The injured person was not a “qualified person” (under the MVAIC) - The applicant’s injuries didn’t arise out of the “use or operation” of a motor vehicle The respondent is not subject to the jurisdiction of the New York No-Fault arbitration forum.

Accordingly, this award is in full settlement of all no-fault benefit claims submitted to this arbitrator.[IA] AAA Case No. 17-16-1044-7502 Keith Tola, arbitrator Award date: 05/23/2018

Timely Claim Resolution Expert Safety Services Premium Savings

From the Experts with Over 80 Years in Workers’ Compensation We have compensation plans to suit these trades: • • • • • • • •

Building Metal Trades Cleaners Construction Electrical Manufacturers Hospitals Launderers and Cleaners Municipalities Printers

• • • • •

Painters and Decorators Paper Products Manufacturers Retail Lumber Roofers and Sheet Metal Workers Truckers, Movers, and Warehouse people

Lovell Safety Management Co., LLC 110 William Street, New York, NY 10038-3935 212-709-8600 | 1-800-5-LOVELL www.lovellsafety.com

Expect big things in workers’ compensation. Most classes approved, nationwide. It pays to get a quote from Applied.® For information call (877) 234-4450 or visit auw.com/us. Follow us at bigdoghq.com. ©2018 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best.

Insurance plans protected U.S. Patent No. 7,908,157.