Insurance Law Commons^™

Uncertainty > Risk: Lessons For Legal Thought From The Insurance Runoff Market, Tom Baker

All Faculty Scholarship

Insurance ideas inform legal thought: from tort law, to health law and financial services regulation, to theories of distributive justice. Within that thought, insurance is conceived as an ideal type in which insurers distribute determinable risks through contracts that fix the parties’ obligations in advance. This ideal type has normative appeal, among other reasons because it explains how tort law might achieve in practice the objectives of tort theory. This ideal type also supports a restrictive vision of liability-based regulation that opposes expansions and supports cutbacks, on the grounds that uncertainty poses an existential threat to insurance markets.

Prior work …

Insuring Floods: The Most Common And Devastating Natural Catastrophes In America, Christopher French

Journal Articles

Flooding is the most common natural catastrophe Americans face, accounting for 90% of all damage caused by natural catastrophes. Hurricanes Katrina and Sandy, for example, collectively caused over $160 billion in damage, but only approximately 10% of the Hurricane Katrina victims and 50% of the Hurricane Sandy victims had insurance to cover their flood losses. Consequently, both their homes and lives were left in ruins in the wake of the storms. Nationwide, only approximately 7% of homeowners have insurance that covers flood losses even though the risk of flooding is only increasing as coastal areas continue to be developed and …

Studying Is Dangerous? Possible Federal Remedies For Study Abroad Liability, Robert J. Aalberts, Chad G. Marzen, Darren A. Prum

Chad G. Marzen

Every year, thousands of U.S. students study abroad for academic credit. Study abroad programs have traditionally garnered strong congressional support, and proponents of the programs emphasize the educational, cultural, and diplomatic benefits from study abroad experiences.

Despite the many benefits of study abroad programs, risks are incurred overseas. In the past several years, a number of incidents have resulted in which students studying abroad have not only incurred physical harm, but in some instances have died while enrolled in a study abroad program. The current liability standards governing study abroad programs are murky. This article not only discusses the various …

The Personal Liability Of Insurance Claims Adjusters For Insurance Bad Faith, Chad G. Marzen

Chad G. Marzen

One of the currents of change sweeping through the insurance industry is the rise of insurance bad faith liability. There is an emerging legal question today as to whether the individual employee adjusters of insurance companies can be subject to bad faith liability.This article examines the question of whether employee-adjusters of insurance companies can and should be held liable for insurance bad faith liability. Early reported cases involving personal liability for bad faith generally held that insurance company employee adjusters were immune from bad faith claims as they were not in privity of contract with insureds. However, three significant decisions …

The Role Of The Profit Imperative In Risk Management, Christopher French

Christopher C. French

Segmented Settlements Are Not The Answer: A Response To Professor Squire’S Article, How Collective Settlements Camouflage The Costs Of Shareholder Lawsuits, Christopher C. French

Journal Articles

In his recent article, Professor Richard Squire offers a provocative theory in which he claims the underlying claimants in shareholder litigation against corporate policyholders are overcompensated due to what he describes as “cramdown” settlements, under which insurers are forced to settle due to the “duty to contribute” that arises under multi-layered directors and officers (“D&O”) insurance programs. He also offers a novel idea regarding how this problem could be fixed by what he refers to as “segmented” settlements in which each insurer and the policyholder would be allowed to settle separately and consider only its own interests in doing so. …

Segmented Settlements Are Not The Answer: A Response To Professor Squire’S Article, How Collective Settlements Camouflage The Costs Of Shareholder Lawsuits, Christopher C. French

Christopher C. French

In his recent article, Professor Richard Squire offers a provocative theory in which he claims the underlying claimants in shareholder litigation against corporate policyholders are overcompensated due to what he describes as “cramdown” settlements, under which insurers are forced to settle due to the “duty to contribute” that arises under multi-layered directors and officers (“D&O”) insurance programs. He also offers a novel idea regarding how this problem could be fixed by what he refers to as “segmented” settlements in which each insurer and the policyholder would be allowed to settle separately and consider only its own interests in doing so. …

Regulation Not Prohibition: The Comparative Case Against The Insurable Interest Doctrine, Sharo Michael Atmeh

Sharo M Atmeh

American law requires an insurable interest—a pecuniary or affective stake in the subject of an insurance policy—as a predi-cate to properly obtaining insurance. In theory, the rule prevents both wagering on individual lives and moral hazard. In practice, the doctrine is avoided by complex insurance transaction structuring to effectuate both origination and transfers of insurance by individuals without an insurable interest. This paper argues that it is time to ab-andon the insurable interest doctrine. As both the English and Aus-tralian experiences indicate, elimination of the insurable interest doctrine will have little detrimental pecuniary effect on the insurance industry, while freeing …

The “Ensuing Loss” Clause In Insurance Policies: The Forgotten And Misunderstood Antidote To Anti-Concurrent Causation Exclusions, Chris French

Journal Articles

As a result of the 1906 earthquake and fire in San Francisco which destroyed the city, a clause known as the “ensuing loss” clause was created to address concurrent causation situations in which a loss follows both a covered peril and an excluded peril. Ensuing loss clauses appear in the exclusions section of such policies and in essence they provide that coverage for a loss caused by an excluded peril is nonetheless covered if the loss “ensues” from a covered peril. Today, ensuing loss clauses are found in “all risk” property and homeowners policies, which cover all losses except for …

Debunking The Myth That Insurance Coverage Is Not Available Or Allowed For Intentional Torts Or Damages, Christopher French

Journal Articles

Over the years, a myth has developed that insurance coverage is not available or allowed for intentional injuries or damage. This myth has two primary bases: one, the “fortuity” doctrine, which provides that insurance should only cover losses that happen by chance; and two, public policy, which allegedly disfavors allowing insurance for intentional injuries or damage. This article dispels that myth. Many types of liability insurance policies expressly cover intentional torts including trademark infringement, copyright infringement, invasion of privacy, defamation, disparagement, and improper employment practices such as discrimination. In addition, punitive damages, which typically are awarded for intentional misconduct, are …

The “Ensuing Loss” Clause In Insurance Policies: The Forgotten And Misunderstood Antidote To Anti-Concurrent Causation Exclusions, Chris French

Christopher C. French

As a result of the 1906 earthquake and fire in San Francisco which destroyed the city, a clause known as the “ensuing loss” clause was created to address concurrent causation situations in which a loss follows both a covered peril and an excluded peril. Ensuing loss clauses appear in the exclusions section of such policies and in essence they provide that coverage for a loss caused by an excluded peril is nonetheless covered if the loss “ensues” from a covered peril. Today, ensuing loss clauses are found in “all risk” property and homeowners policies, which cover all losses except for …

The “Non-Cumulation Clause”: An “Other Insurance” Clause By Another Name, Chris French

Christopher C. French

How long-tail liability claims such as asbestos bodily injury claims and environmental property damage claims are allocated among multiple triggered policy years can result in the shifting of tens or hundreds of millions of dollars from one party to another. In recent years, insurers have argued that clauses commonly titled, “Prior Insurance and Non-Cumulation of Liability” (referred to herein as “Non-Cumulation Clauses”), which are found in commercial liability policies, should be applied to reduce or eliminate their coverage responsibilities for long-tail liability claims by shifting their coverage responsibilities to insurers that issued policies in earlier policy years. The insurers’ argument …

Debunking The Myth That Insurance Coverage Is Not Available Or Allowed For Intentional Torts Or Damages, Christopher French

Christopher C. French

Construction Defects: Are They “Occurrences”?, Chris French

Journal Articles

An issue in the area of insurance law that has been litigated frequently in recent years is whether construction defects are “occurrences” under Commercial General Liability (“CGL”) insurance policies. The courts have been divided in deciding the issue and in their approaches to analyzing the issue. This article addresses how the issue should be analyzed and concludes that construction defects are “occurrences”. The relevant rules of insurance policy interpretation dictate that construction defects are “occurrences”. Policy language should be interpreted in such a way as to fulfill the reasonable expectations of the policyholder when the policy is construed as a …

The “Non-Cumulation Clause”: An “Other Insurance” Clause By Another Name, Chris French

Journal Articles

How long-tail liability claims such as asbestos bodily injury claims and environmental property damage claims are allocated among multiple triggered policy years can result in the shifting of tens or hundreds of millions of dollars from one party to another. In recent years, insurers have argued that clauses commonly titled, “Prior Insurance and Non-Cumulation of Liability” (referred to herein as “Non-Cumulation Clauses”), which are found in commercial liability policies, should be applied to reduce or eliminate their coverage responsibilities for long-tail liability claims by shifting their coverage responsibilities to insurers that issued policies in earlier policy years. The insurers’ argument …

Construction Defects: Are They “Occurrences”?, Chris French

Christopher C. French

An issue in the area of insurance law that has been litigated frequently in recent years is whether construction defects are “occurrences” under Commercial General Liability (“CGL”) insurance policies. The courts have been divided in deciding the issue and in their approaches to analyzing the issue. This article addresses how the issue should be analyzed and concludes that construction defects are “occurrences”.

The relevant rules of insurance policy interpretation dictate that construction defects are “occurrences”. Policy language should be interpreted in such a way as to fulfill the reasonable expectations of the policyholder when the policy is construed as a …

A Complete Property Right Amendment, John H. Ryskamp

ExpressO

The trend of the eminent domain reform and "Kelo plus" initiatives is toward a comprehensive Constitutional property right incorporating the elements of level of review, nature of government action, and extent of compensation. This article contains a draft amendment which reflects these concerns.

“It’S The [Tort System], Stupid:” Consumer Deductibles; How To More Equitably Distribute The Risks Of Medical Malpractice And Adequately Compensate Victims Without Statutory Damage Caps., Bradford Luke Ledbetter

ExpressO

No abstract provided.

Breaking The Bank: Revisiting Central Bank Of Denver After Enron And Sarbanes-Oxley, Celia Taylor

ExpressO

No abstract provided.

Reconsidering Insurance For Punitive Damages, Tom Baker

All Faculty Scholarship

No abstract provided.

Protection Of Shipowners’ Liability Under United States Law And Marine Insurance Practice, Izak Stephanus Fourie

LLM Theses and Essays

Shipowners are exposed to a variety of risks that are, to a large extent, unique to maritime business. Because of factors like the recent increase in the size and value of ships, increase in marine traffic, enactment of legislation imposing new liabilities, and the tendency of courts to make huge awards to personal injury and death claims, shipowners are exposed to potential losses or claims worth millions of dollars in the event of disaster. These heavy risks led to the establishment of the marine insurance industry, as well as the enactment of legislation that limits shipowners’ liability. This legislation was …