I didn't just include this story to share my post-college fears, or to tell some uplifting story about how with hard work and dedication that girl became an insurance coverage lawyer (yawn). Really, it was just a vehicle to share why I find risk conversation-- a new risk management-oriented online community by Chubb Insurance--to be a really neat, and helpful tool. Clicking around this website you can take quizzes to see where there is risk in your private and business life, read blogs, polls and encounter other user friendly information all available at the click of your mouse. By having some idea of what coverage you need, and what questions you need to ask, you can easily be more productive (and less confused) when you are ready for that first conversation with your agent.

Full Press Release

Reading his comments, I am not sure the senator does in fact understand the insurance policy, or policies in general. Insurance policies do not "permit companies to charge . . . ." They either cover some loss/damage/injury, or they do not -- an outcome that is not based on the company's "permission." In fact, the insurance company that would decide to apply only certain provisions of their policy would be acting incorrectly. The company must strictly follow their contract that was entered into in good faith. The "narrow interpretation" Blumenthal is criticizing is merely proper application of the policy. Says who? Well, says the courts.

Because of his challenges, insurance companies that don't capitulate are faced with bad publicity by the public who, understandably, are not aware of the applicable legal background. Because the insurance company IS aware of the legal implications of their choices, and because they are aware of other dangers (some of which are noted by the comments to the articles) that could come about if they begin picking and choosing when to apply policy language, they have no choice but to turn the other cheek.  

Of course, that didn't stop cases such In Re Katrina Canal Breaches Litigation from happening several years back when New Orleans flooded due to storm surge. The essence of those consolidated cases was the contention that although water damage and even certain causes of water damage were excluded from coverage, policies generally did not explicitly exclude coverage for losses caused  human negligence in construction and maintenance of flood levees. (I wrote about In Re Katrina Canal Breaches here, here and here, among other places).

This human negligence argument has a better chance where an open peril policy excludes causes but does not expressly exclude results, and for some reason it does much better in challenges to earth movement exclusions and some other limitations. However, when it comes to flood or water damage exclusions, human negligence is the Washington Generals to the water damage exclusion's Harlem Globetrotters. It just gets run off the court, and has its shorts pulled down by Meadowlark Lemon while shooting a free throw. The human negligence argument won out at the District Court level in Canal Breaches, but that was like winning the first quarter --  and it got crushed at the Fifth Circuit. 

Truth is, flood exclusions have been almost always upheld for a long, long time. If you are looking for a reason why flood exclusions fare better than earth movement exclusions, it is because where earth movement exclusions fail, it is generally not in cases of widespread earthquake damage. Instead, the failure usually comes in isolated cases involving mud slides or similar damage. Courts are reluctant to break exclusions that clearly related to low-frequency, high-severity losses, like floods and earthquakes. Depending on the judge, courts are more willing to see ambiguity involving high-frequency, low-severity losses. That's my explanation, anyway. Maybe someone has a better one.  

OK, enough philosophy for now. Chad writes:

The point here is that any talk about lawyers expecting disputes over wind vs. water is just that—talk…probably from plaintiffs’ attorneys. The case law is plentiful.

As George Simpson, an attorney with North Carolina’s Cranfill Sumner & Hartzog, tells me, “It would be hard to imagine anyone opening a Pandora’s Box of issues that haven’t already been addressed ad nauseum.”

Dude has it right, I think. Read the whole story and see if you agree. Also, thanks to Chad for the shout out.     

Speaking of Irene, this gives me an excuse to talk about Frank Sinatra. Here's a link to his version of Goodnight Irene. If you can get past the really annoying backup vocals that sound like a mix of drunken cowpokes and coked-up banshees, this song is a good example of what an amazing talent Sinatra was -- he could take a song that is otherwise pretty forgettable, or that sucks, and sell it. Sinatra, whose theory of singing was to act the part he was singing, is right at the top of singers who could bring sincerity to their work.    

Anyway, looking at the claims of Thomas Jefferson somehow lead to an actual insurance topic. Sallie Mae is now entering the world of tuition insurance. Tuition insurance provides coverage for students' tuition when they are forced to leave school mid-term for a physical or mental illness. Here is NY Times coverage on the plan. This article sparked some interesting comments, which you can read here due to the plan's differing payouts for physical/mental health claims (100% payout for physical, 75% for mental health). 

While there seems to be plenty of humor for a television show, there is also an important message in these articles. The insurance company will investigate claims, they have the resources to give mouse autopsies, and insurance fraud is not a smart get rich quick scheme.

Homes, automobiles, and commercial property, OH MY!: Worse than the damage to Auntie Em and Uncle Henry's house in the Wizard of Oz: insurance companies have already paid over $4.2 million in coverage for the damage caused by the Memorial Day windstorm (that did include tornadoes) in Fargo, North Dakota and the total could rise to $5.8 million.

David adds: There are also big flooding problems in Minot, N.D. The Souris River is going nuts. Lots of the town has been evacuated, including my niece, her husband and their kids, and they are living out on our family farm two hours away. "Souris" is French for mouse, the river originates in Canada, comes down to Minot and loops back up. I don't like to brag, but Minot is where I went to undergrad, at the prestigious Minot State College -- it had a great English department and was an awesome party school (I co-majored in English and Advance Party Studies). When I  was a kid there was a big flood and they called it "The Mouse That Roared," but as I recall I don't think it was anything like the size of this.  

Insurance, bringing politicians together: One thing that always annoys me during election season is that with both parties so busy pointing out their differences, we miss the chance for politicians to come together. Well, the NY Times has solved this problem (really, solving a problem this big is as simple as publishing an article in the Times) by pointing out 4, count 'em, 4 insurance issues that Republicans and Democrats could possibly, if they try really, really hard agree on.  

Vancouver hockey riot: does insurance cover damage from looting and rioting? The Vancouver riot, like many of these things, was carried out by "anarchists." Walter Sobchak would have no respect for these people, they are just barely above nihilists as far as having an ethos. As Little Bill Daggett said in The Unforgiven, they don't have any character, not even bad character. Plus, their anarchism is fake anarchism. As has been pointed out by others, if there was an actual state of anarchy, so-called anarchists who wear masks, mob up and destroy property would be machine-gunned or sold into slavery by the private security firms that would rule the streets.   

More on Vancouver hockey riot: anarchist looters to be sued. They would be getting off easy. Being sued is still better than being machine-gunned or sold into slavery during a state of actual anarchy, which is what the anarchists want.

Montana -- home births rise, covered by insurance.  This story says they have both insurance and a midwife. I was born at home in North Dakota, delivered by my father (my mother also played a large role), no doctor, no midwife, no insurance. So was one of my sisters. People are so extravagant these days. Midwives and insurance are for wimps.  

Stemming out of the explosion of construction defect litigation in the 1990s, "long tail" liability for construction defect damages became a frequently litigated reality, and insurers responded with a number of measures including exclusions for injuries in progress, multi-unit construction, losses for which pre-policy notice was provided and stacking of multiple policies. Part of this was designed to bring more certainty to indemnity issues under "occurrence" liability policies, but another part was designed to relieve insurers of the duty to defend in many instances -- construction defect cases are often massive and expensive to defend, with defense costs exceeding indemnity exposure in a high percentage of cases. 

Insurers also sought to limit AI responsibilities by producing an endorsement form that specified that the coverage applies to "ongoing operations."  More about that in a minute. One of the great challenges of insurance coverage law is that this field is really just out of its infancy.  Widespread commercial liability insurance is a relatively new product -- since about the early to mid-1960s -- and has been evolving continuously. As a result, in many states, key questions have not even been addressed by the judiciary, or the decisions that do exist aren't very helpful and are perhaps not the most sophisticated or insightful analysis that could be done. This is why I call insurance coverage The Great Workshop of the Common Law. It's a work in progress -- an "ongoing operation," if you will. 

Now, back to AI endorsements.  In 1993 and 1997 the Insurance Services Office produced additional insured endorsements that were supposed to limit exposure to damage that occurred during ongoing operations. The problem is that, many times, courts said the language of the endorsement didn't actually say that: for example, ISO form CG 20 10 03 97 (which as the last four numbers of the form indicate was produced in March 1997) says AI coverage is in respect to "liability arising out of your [the subcontractor's] ongoing operations performed for [the additional insured]." Some courts have said this language actually covers not just damages that occurred during ongoing operations, but damages that occurred after completion. Because the vast majority of construction defect liability stems from water intrusion and related damages that occur after completion of a project, these cases present a problem for insurers. 

I saw a recent Ninth Circuit case that highlights this language: Tri-Star Theme Builders, Inc. v. OneBeacon Insurance Co. The case was decided under Arizona law. This case appears to me to involve the 20 10 03 97 form, judging by the language the court analyzed. The Ninth Circuit found that the "arising out of ongoing operations" did not limit the GC's coverage to just liability for damages that the subcontractor caused before completion, but also for damages that occurred after completion, as long as they happened during the policy period. "During the policy period" isn't as much of a restriction as you might think, or the Ninth Circuit appeared to believe -- in the absence of a continuing loss or other exclusion, damages that begin during a policy period are usually covered by a commercial general liability policy if they continue after the policy period.  

The Ninth Circuit said that damages that occur after completion necessarily must have arisen out of ongoing operations -- if the subcontractor didn't do any ongoing operations, there wouldn't have been anything completed. The court said it wasn't going to consider the drafter's history, which I think is a legitimate call, and was going to hold the insurer to what it actually said. I think there is an argument for what the court said, but there is one aspect of its analysis I think is lacking.  The court examined exclusion (j)(6) in the body of the subcontractor's policy, it appears, to show that if the endorsement didn't provide coverage for completed ops damages, there was no coverage at all. Exclusion (j)(6) is the one that precludes coverage for "that particular part of any property that must be restored, repaired or replaced" because the insured's work "was incorrectly performed on it." There is an exception in the exclusion for damages that occur after completion, meaning it applies only to ongoing operations. I take it the Ninth Circuit's point is that, if the AI endorsement excludes completed operations and (j)(6) excludes ongoing operations, there is no coverage and that is ridiculous.

If that is what the court is saying, my reaction is this: (j)(6) might indeed limit the subcontractor's coverage to completed operations only, but as to the additionally insured GC, there is potential coverage for ongoing operations as well as completed ops because the definition of "your work" in a commercial general liability policy has an exception that allows coverage for a GC when work was performed for it by a subcontractor.  In other words, the (j)(6) exclusion will be applied differently to a GC insured as an AI under the policy than to the named insured subcontractor. If this seems weird, don't forget that there is a Separation of Insureds or Severability of Insureds clause in such policies that instructs you to analyze coverage separately as to each insured. 

Because of case law like this, ISO put out an AI form in 2004 that changes the coverage language and contains an express exclusion for damages that occur after completion. But even seven years after this AI form was produced by ISO, not every insurer uses it. Many still use old forms, or use manuscript forms of their own devising, or modify the ISO form. 

I could go on and on and on about AI insurance, but this is a good place to stop for today. There are something like 28 current ISO AI forms, and many, many old ISO forms, out there. Also, there are dozens if not hundreds of manuscript and adapted forms out there, so this issue is one we will keep seeing being constructed and deconstructed again and again upon our visits to The Great Workshop of the Common Law. 

The New York Times explores what it says is an increasing reliance on dictionary definitions in U.S. Supreme Court opinions. In May alone, justices cited dictionary definitions eight times, and not always for big words.

All of this is, lexicographers say, sort of strange.

“I think that it’s probably wrong, in almost all situations, to use a dictionary in the courtroom,” said Jesse Sheidlower, the editor-at-large of the Oxford English Dictionary. “Dictionary definitions are written with a lot of things in mind, but rigorously circumscribing the exact meanings and connotations of terms is not usually one of them.”

I can't speak much to opinions of the U.S. Supreme Court, because I seldom read them, but I read a lot of insurance coverage cases from state appellate courts, federal district courts and federal appeals courts, and I agree with the gist of the Times story.

One issue with using a dictionary definition is which dictionary do you use? There are scores and scores of dictionaries, and the variance among them is sufficient to allow a judge to cherry pick a definition that proves a pre-conceived point. 

In addition, the use of dictionaries tends to support an extra-textual method of analysis that renders a much more limited and less insightful analysis. I'm not saying this is done out of bad motives. I'm simply saying it's non-textual and not the  best method of analysis. 

Words and phrases in a policy should not be viewed in isolation, outside the context of surrounding terms of the policy, and of the policy as a whole. I strongly advocate analyzing policy language by analyzing the entire context of the policy and attempting to discern what underwriting concern or principle of insurance is being addressed. Also, analyzing sentence structure, punctuation and syntax is much more helpful at discerning meaning, or finding ambiguity, than turning to a dictionary. In reality, although some courts purport to cling to notions that insurance terms are supposed to be understood in the common, everyday usage of the word in the absence of a specific definition within the policy, I think this is unrealistic. Most of the time, words, phrases and clauses in insurance policies have at least some degree of specialized meaning, because the concepts they deal with are specialized, and because the words are usually selected in response to previous judicial opinions. 

I would make one final point: extra-textualism, or non-textualism as it also could be called, is heavily reliant on the deductive method of reasoning, which is inferior to the inductive method in insurance coverage analysis. Deductive logic is prone to misuse because it relies on an initial set of premises that are subject to the bias of the person who creates the premises, and is therefore rigid, and you are less likely to catch your own mistakes or recognize your own folly.

UPDATE: Forgot the link to the NYT, fixed it.

BUT! Don't you fret, the ABA is (hopefully) coming to the rescue:

"The ABA will require schools to report the percentage of graduates who are employed and the types of jobs they have taken in much greater detail than they do at present. They must report whether graduates are in jobs that require a law degree; whether they are unemployed; whether their employment status is unknown; and whether they are in jobs funded by the law school or university. Critics have complained that some law schools give their graduates temporary academic jobs so they will count among the employed for purposes of U.S. News & World Report's rankings."

Read the rest of this article here.

While it is nice that this will help future students have a more realistic view of their schools, I think the more important result from the ABA changes will be schools working harder to find real employment for their students. I feel fairly safe in saying students utilize these reports in deciding what law school to attend. Now, the schools will have to work harder and smarter to continue to draw top students into their ranks.

"Radio thirty years ago was simple: everyone hears it for free and a few buy it.

For a time, one could use free to promote an idea and have leverage to turn that attention into paid sales of a similar item (either because free went away or because the similar item offered convenience or souvenir value).

I think that might be changing. As the free-only cohort grows, people start to feel foolish when they pay for something when the free substitute is easily available and perhaps more convenient.

Think about that--buying things now makes some people feel foolish. Few felt foolish buying a Creedence album in the 1970s. They felt good about it, not stupid."

Can't disagree with anything he says in his post. Especially since this gives me an excuse to give  an obligatory Creedence link as well as a link to the same song in The Big Lebowski, one of the 10 greatest movie comedies of all time. The Dude was, without doubt, one of the laziest men in Los Angeles County, which placed him high in the running for laziest worldwide. 

Godin gives the example of what all this means in the context of, say, Lady Gaga: the music is basically given away, but the concerts cost money.  Lawyer blogging is somewhat similar in theory, and somewhat different. Unlike Lady Gaga, whose product is mainly the same songs she performs in concert, lawyers are selling legal advice, but they don't actually give away much of it on the internet.  Law is a knowledge-based business: even if you give away a free analysis of what some case means or what some development signifies, you are not really giving away your songs. The application of the knowledge is so fact-intensive and so variable under new circumstances that you are really not giving away all that much, truth be told, that you could put a price on in the first place. 

Instead, lawyer blogging is less about transfers of information from paid to free than it is about branding. I know, a lot of lawyers are completely uncomfortable with talk of branding, selling, marketing, and so forth -- bring up the subject and they react like you just set a basket of snakes on the desk in front of them. I  myself see nothing wrong with the concept of selling, because I don't have a concept of lawyerism as a mystical calling. It's a hard job in a highly regulated field with a lot of responsibility, but still a commercial endeavor, and all in all, one I'd rather do than what I did in my younger years: hauling hay bales, driving tractors and cleaning cow manure out of barns with a pitchfork. As the economist John Kenneth Galbraith said, if you've ever worked on a farm, nothing else ever seems like work. Selling legal services is as much a part of being a lawyer as writing briefs and arguing to judges.  

The concept of branding is increasingly important to legal work these days, and this is something that has to be thought through, because the days of low hanging fuit in the legal business are done.  Blogging or some other promotional activity is an integral part of branding, because increasingly, as is clear from the Godin post, if you aren't giving some information away it will be assumed you don't have anything anyone wants, either for free or to pay for. You have to be part of the mix, a player. How you differentiate yourself,  and if you can, is something you have to give thought to. The first step is to ask yourself what you have to sell that someone would want. It's a hard question, and uncomfortable for many. If the answer is you don't have anything, you have to get something. You can't sell something if you don't have anything to sell that someone would buy. Asking yourself this question is pretty uncomfortable, because the answer may involve making changes, perhaps some big ones.    

I formed many of my ideas about legal marketing from Joe Gerber of Cozen O'Connor. When I read this speech he gave about the subject, it was a thunderbolt, a Road to Damascus moment, one of the most amazingly true things I've ever read.  Joe is one of my heroes, a guy with ideas as well as a guy who does stuff, he's the Legal Ayatollah of Rock'n'Rolla. Over the years I have re-read this speech at least two dozen times and handed it out to lots and lots of people. Not sure how many have read it, but I've handed it out.     

I think I'll conclude by noting something else Godin said in his post:

"Does the game theory of the market make it likely that those in search of discovery will accelerate the use of free to get attention? Of course."

This point is something to ponder. The implication of it for lawyers, as I've said, is that people have to know who you are and that you are selling something. But Joe Gerber says, "don't just do it." If you're going to do it, don't do it because someone is telling you to or just to go through the motions, do it with passion and creativity and because you believe in what you are selling. For Joe, any and all marketing is good marketing -- if it works. If it works, it can be quantified on the bottom line. If it can't be measured on the bottom line, it's not marketing. It might be something else, such as a social activity you enjoy, or perhaps just a complete waste of time that you are deluding yourself with to try to look like you are doing something, but it isn't marketing.        

More on boxers. Well, Sen. Boxer, and to be honest, the story isn't really about her. But, it made for a good segue. I remember starting law school and being told that the legal world would beg to employ us when we were ready to enter the job market.  Turns out, not so true. That being said, it will be interesting to see if the ABA meeting on June 11 brings about changes that will "improve the independent oversight, accuracy, credibility, and transparency of the data law schools have to make available to the public."

Higher education bubble: Are students finally figuring it out? University of Kansas Law School reported a 23 percent drop in applications and quoted a nationwide drop of 12-13 percent. Looks like students are getting smarter - but what about KU? Why are they spending money on recruiting instead of putting their money where it is needed...helping graduates find jobs!  

And an insurance note for new grads. YOU DO NEED RENTERS INSURANCE!

Besides insurance recovery and coverage, David's commercial litigation practice has included a variety of complex cases including environmental liability and intellectual property. Before becoming a lawyer, David was an award-winning investigative, crime and political newspaper reporter, including eight years with the Phoenix Gazette, the now-defunct afternoon daily in Phoenix, Arizona. He is admitted to the bar in Oregon, Idaho and Washington and has applications pending in Montana and North Dakota. He blogs Monday through Friday, major holidays excluded, on insurance coverage cases, industry developments and other topics of interest.

You can contact David at drossmiller@dunncarney.com or 503-306-5311.
Dunn Carney Allen Higgins & Tongue LLP
851 SW Sixth Ave. Ste. 1500
Portland, OR 97204-1357
503-224-6440

Website: www.dunncarney.com

Before becoming a lawyer, Elissa interned at the Legal Aid and YWCA in Omaha, Nebraska where she focused on helping survivors of domestic violence. She also interned at Miller Johnson P.L.C. in Grand Rapids, Michigan. She blogs Monday through Friday, major holidays excluded, on life as a new lawyer, insurance coverage cases, industry developments and other topics of interest.

You can contact Elissa at emeyrowitz@dunncarney.com or 503-417-5468.
Dunn Carney Allen Higgins & Tongue LLP
851 SW Sixth Ave. Ste. 1500
Portland, OR 97204-1357
503-224-6440

Website: www.dunncarney.com