Insurance

Too often people argue as though they are in front of a judge, or some other cosmic arbiter of correctness, rather than asking ourselves what might move our opponent. In this edition of OIG Shorts, the Sheppard Mullin Richter & Hampton LLP Organizational Integrity Group explains that to increase our chances of moving our opponent, we need to recalibrate our goals, rethink our strategy, and reframe the discussion.
Continue Reading Organizational Integrity Shorts: The Science of Persuasion

Investigations are stressful for an organization’s leadership. But what is often overlooked is that they are stressful for an organization’s employees as well. The need-to-know nature of internal investigations usually restricts knowledge of the investigation’s character, scope, and potential consequences to a relatively small circle of senior management. But the employees who fall within the scope of the investigation will often know little about what’s going on, which can generate anxiety, impair morale, and create tensions in the workplace, further leading to negative repercussions for the organization that persist long after the investigation has been closed.
Continue Reading The Close-Out Debrief

For years, plaintiff’s attorney Montie S. Day has sued California auto insurers, arguing that the policy exclusion precluding coverage for first-party diminution of value damages claims is unenforceable. On November 30, 2023, the Ninth Circuit Court of Appeals in Uyanik v. Wawanesa (an unpublished decision) affirmed the Northern District of California Court’s dismissal of Ali Uyanik’s (Day’s client) first amended complaint and sanctioned Mr. Day $5,000 for pursuing a frivolous appeal. The Court held that Uyanik’s breach of contract claim was “grounded in the plainly incorrect assertion that California law requires insurance providers to coverer all losses, including diminution of vehicle value
Continue Reading Attorney Challenging First-Party Diminution of Value Claims Sanctioned by Ninth Circuit

In the wake of the Covid-19 pandemic lockdown orders, policyholders were driving less and insurance company severities and loss ratios were reduced. This resulted in a temporary increase in insurance company profits. Beginning in April 2020, the California Department of Insurance (“DOI”) issued a series of Bulletins, ordering insurers to provide premium refunds to policyholders. Initially, many insurers complied, providing partial refunds during the early months of the pandemic.
Continue Reading The Tide Shifts in California Covid Premium Refund Cases

The concept of fortuity is fundamental to insurance law. That is because insurance protects against the risk of contingent or unknown events or losses – not certainties of loss. Cal. Ins. Code § 22. Thus, in the context of third-party liability insurance, most policies condition coverage on an “occurrence,” meaning an “accident,” that causes bodily injury, property damage or personal injury.[1]
Continue Reading Can an Insured’s Mental Incapacity or Insanity Convert Non-Accidental Conduct into an Accident?

In Bennett v. Ohio Nat’l Life Assur. Corp., 92 Cal. App. 5th 723, the California Court of Appeal addressed when the statute of limitations runs for a disability insurance claim. The Court held that the statute of limitations for a disability claim did not accrue until every element of the cause of action – including damages – was complete. Therefore, in Bennett, the statute of limitations did not begin to run at the time of the denial, but years later when Ohio National stopped making disability payments.
Continue Reading A Primer on When a Cause of Action Accrues for Statute of Limitations Purposes

Auto insurers are often asked by their insureds and third-party claimants to pay for what are known as “diminished value” damages in connection with car accidents. Generally speaking, “diminished value” is the loss of market value of the damaged vehicle caused by the accident. Cars that have been involved in accidents are generally worth less than cars that have not. That is one of the reasons Carfax reports exist, identifying whether a particular vehicle has been involved in a significant accident.
Continue Reading Are Third-Party Diminished Value Damages Claims Covered in California?

In the 10th edition of the “OIG Shorts” series, Sheppard Mullin’s Organizational Integrity Group continues its exploration of a number of complex compliance matters with a discussion on Setting the Table for Good Decision-Making: And Making Sure the Chief Legal Officer Has a Seat at It. This post discusses why it’s important that Chief Legal Officers and Chief Ethics & Compliance Officers have meaningful, real-time involvement in the key legal, organizational, reputational, and business discussions/decisions of their companies, as well as direct access to the Chief Executive Officer and the Board.
Continue Reading Organizational Integrity Shorts: A Seat at the Table

This month, Sheppard Mullin’s Organizational Integrity Group continued its exploration of a number of complex compliance matters as part of their “OIG Shorts” series with a discussion on Understanding the Various Layers of a Targeted Compliance Program. This post discusses the importance of a targeted, multi-layered compliance program focused at individual deals, sales, contracts, etc. – as distinguished from the equally important company-wide E&C program previously discussed.
Continue Reading Organizational Integrity Shorts: Understanding the Various Layers of a Targeted Compliance Program

In an issue of first impression, the Ninth Circuit Court of Appeals affirmed summary judgment for Allstate and held that the two-year statute of limitations for bad faith claims arising out of an uninsured/underinsured motorist claim begins to run when the claimant should have known about the insurer’s alleged bad faith acts, rather than when the claim is resolved. In Marinelarena v. Allstate Northbrook Indem. Co., 2023 WL 3033498 (9th Cir. 2023), the plaintiff alleged that she suffered injuries in a 2016 car accident with a hit and run driver. Two years later, in January 2018, Marinelarena made a policy limit
Continue Reading Ninth Circuit Confirms that the Two-Year Statute of Limitations in a Bad Faith UM/UIM Claim Begins when the Insured Should Have Known About the Insurer’s Alleged Bad Faith Acts

Voyager Indemnity Insurance Company (“Voyager) issued a commercial liability insurance policy to MRB Construction, Inc. (“MRB Construction”), a framing subcontractor. As is common with such policies, MRB Construction’s policy contained a “blanket” additional insured endorsement for its ongoing operations. Specifically, the policy not only covered MRB Construction as the named insured, but extended “additional insured” status to those persons or organizations “for whom you are performing operations.” 
Continue Reading Failure to Timely Produce in Discovery Underlying Written Contract with Insured Prevented General Contractor from Establishing Status as an Additional Insured

On February 22, 2023, the U.S. Department of Justice (DOJ) announced a new nation-wide policy to incentivize companies to self-report criminal activity. Among the cited benefits of self-reporting are discounts on fines and non-prosecution agreements. This new policy arrives on the heels of the “Monaco Memo,” issued in September 2022 by Deputy Attorney General Lisa Monaco, which directed each prosecutorial DOJ component to review its policies on corporate voluntary self-disclosures and update to reflect the guidance’s core principles. The policy also is in addition to guidance from Attorney General Merrick Garland, who in December 2022 emphasized prosecutorial leniency
Continue Reading Corporate Voluntary Self-Disclosure of Criminal Activity: More of the Same or a Real Sea Change?

One of the most powerful weapons an insurance company can use to defeat a bad faith claim is the “genuine dispute” doctrine. Under this doctrine, as long as there was a genuine dispute regarding coverage or the amount owed, the insurer cannot be held liable for having withheld the disputed policy benefits even if it later turned out they were owed. Chateau Chamberay Homeowners Ass’n v. Associated Int’l Ins. Co., 90 Cal.App.4th 335 (2001). Historically, this defense has been applied most commonly in published cases involving disputes over unsettled legal issues or where the insurer’s position was supported by a
Continue Reading New Insurance Law: The Extension of California’s “Genuine Dispute” Doctrine to Disputes Over the Value of General Damages In UM/UIM Claims Handling

One of the most powerful weapons an insurance company can use to defeat a bad faith claim is the “genuine dispute” doctrine. Under this doctrine, as long as there was a genuine dispute regarding coverage or the amount owed, the insurer cannot be held liable for having withheld the disputed policy benefits even if it later turned out they were owed. Chateau Chamberay Homeowners Ass’n v. Associated Int’l Ins. Co., 90 Cal.App.4th 335 (2001). Historically, this defense has been applied most commonly in published cases involving disputes over unsettled legal issues or where the insurer’s position was supported by a
Continue Reading New Insurance Law: The Extension of California’s “Genuine Dispute” Doctrine to Disputes Over the Value of General Damages In UM/UIM Claims Handling

Over the past few months, the OIG shorts series focused on structuring and implementing a comprehensive and effective ethics and compliance program. Many times, this requires a mindset shift from a checking-the-box mentality to a wholistic approach in which everyone feels they have an important role to play. Nowhere is this more apropos than in the area of cybersecurity including developing a data security strategy and maintaining an effective incident response plan.
Continue Reading Ethics & Compliance: Let’s Talk About Cybersecurity