Author Archives: zollt

liability claims

The issue

A UK based international drinks manufacturer with a diverse history of acquisitions found it was being targeted in the US in relation to claims related to sales of ‘alco pops’. It was finding it difficult to manage the volume of claims and notify the correct insurance carriers for each one. The main cause of this confusion was that many of the US subsidiaries had historically arranged their own insurance programmes. Essentially they were finding it tricky to trace liability claims.

What we did

Our Insolutions team association with Marsh Mass Tort in the US undertook an ‘insurance archaeology’ and insurance tracing exercise to identify and collect all available insurance policies across the various subsidiaries. We scanned these policies onto our ICE system to create a searchable electronic database of the policies and cover. The database was able to provide reports on individual carriers, insolvents and their impact on programme.
The client was also able to use the system to submit the claims to insurers, using the ICE claims management module.

The result

The client now has access to a database of it’s legacy insurance programmes. It can run reports when it receives notice of a bar date or insolvency from a carrier and therefore assess the impact. It is able to manage the claims with the assistance of Marsh and the ICE system.

The manufacturer now has a streamlined and efficient way of obtaining the information it needs to notify claims to the correct insurers and receive payment, so reducing costs to the business.


Employers Liability Tracing

InSolutions Employers Liability Tracing can allow businesses to transfer legacy claims to identified historical insurance policies.

We help locate historical insurance coverage and develop a historic insurance profile to identify protection that exists for legacy claims to provide certainty around claims transfer and resolution.

We can also help locate historic employers liability (EL) coverage. We then create a thorough corporate profile of historical entities associated with the business. We ensure that we highlight the issues and options around legacy EL coverage and rebuild any existing historic insurance profile.

The value added to your business is in several areas

  • The reinstatement of valuable lost insurance assets.
  • The ability to focus on current business issues through the transfer of legacy claims.
  • Future certainty around the protection against burdensome claims and expensive defence costs.
  • An understanding of historical business ownership and the ability to redirect legacy claims to third parties or insurance carriers.

InSolutions can provide these services because it can leverage one of the largest broker archives in the London market to identify policy coverage and deliver detailed findings and recommendations. It may not always be possible to locate policies, but for vast majority clients we locate additional insurance coverage.

Detailed research is the only way to discover the information required to find coverage. This research takes on many forms such as researching historic corporate records and archives, and carrying out internal reviews. We also conduct telephone interviews with relevant personnel where required. It is also crucial to identify external sources that may have retained important evidence of insurance e.g. law firms etc. contacting them where possible.

You will receive coverage confirmation of our findings in the form of a Review of initial research findings. We will also contact insurers to coordinate research for additional documentation. The final report will also highlight any further actions required by client.

This graphic shows some of the implicit benefits of Employers Liability Tracing with InSolutions

Employers Liability Tracing

 

 

 

CASE STUDY 1:

PUBLISHING HOUSE

SITUATION/CONTEXT

  • Recent acquisition of another publishing business.
  • Sudden influx of unexpected employers liability claims associated with the printing works from this business.

WHAT INSOLUTIONS DID

  • Through fact finding discovered the printing works had previously been sold to a third party and redirected a number of claims as a result.
  • Located the EL insurance for the balance of the claims for the majority of the period in question.

DELIVERABLES/BENEFITS

  • Complete understanding of ownership history of newly acquired print works.
  • Able to redirect claims to third party owners or relevant legacy insurance carrier, saving hundreds of thousands of pounds.

 

CASE STUDY 2:

TYRE AND EXHAUST COMPANY

SITUATION/CONTEXT

  • Purchased regional tyre and exhaust company with good margin, claims experience, and low staff turnover.
  • Experienced a sudden increase in legacy claims and wanted to understand existing insurance coverage.

WHAT INSOLUTIONS DID

  • Developed complete ownership history of each of the business sites, locating several previous owners.
  • Identified instances where vendors had assumed past liabilities for the majority of asbestos claims producing sites.

DELIVERABLES/BENEFITS

  • Full understanding of existing liabilities (Public Liability and Employers’ Liability) cover dating back to the 1960s.
  • Ability to pass on liability to previous vendors in most instances of asbestos related claims.

The information contained herein is based on sources we believe reliable and should be understood to be general risk

management and insurance information only. The information is not intended to be taken as advice with respect to any

individual situation and cannot be relied upon as such.

 


InSolutions insurance tracing and legacy research allows businesses to transfer legacy claims to identified historical insurance policies.

WHAT WE DO
We help trace historical insurance coverage and develop a historic insurance profile to identify protection that exists for legacy claims to provide certainty around claims transfer and resolution.

WHAT WE DELIVER

  • We help trace historic employers liability (EL) coverage.
  • We create a thorough corporate profile of historical entities associated with the business.
  • We highlight the issues and options around legacy EL coverage and rebuild the historic insurance profile.

THE VALUE YOU GET

  • The reinstatement by tracing of valuable lost insurance assets.
  • The ability to focus on current business issues through the transfer of legacy claims.
  • Future certainty around the protection against burdensome claims and expensive defence costs.

WHAT WE DO:

  • Identify client project sponsor and coordinator.
  • Understand existing policy coverage gaps.
  • Understand history of the company.
  •  Research historic corporate records and archives, and carryout internal reviews.
  • Conduct telephone interviews with relevant personnel where required.
  • Identification of external sources that may have retained important evidence of insurance e.g. law firms etc. contacting them where possible.
  • Review of initial research findings.
  •  Contact insurers to coordinate research for additional documentation.
  • Finalise report.
  • Deliver report to client.
  • Highlight any further actions required.

WHAT WE DELIVER:
Protection for investors and shareholders from unexpected legacy liabilities

THE VALUE YOU GET:
An understanding of historical business ownership and the ability to redirect legacy claims to third parties or insurance carriers

 

Please donwload our pdf on Insurance Tracing for more information


The “Spotlight On…” section of the Norwich and Norfolk Financial Industry Gazette ran a follow-up story on the Presentation Carpathia Insurance Slip to Lloyd’s. This historic document was received by Marcus Baker, chairman of Marsh’s Global Marine Practice.

To read the full article please click this link  Norwich and Norfolk Financial Industry Gazette.

 


The Supreme Court handed down judgment in the employers’ liability policy trigger litigation on 28 March 2012. This overturns the Court of Appeal’s judgment of 08 October 2010 regarding the meaning of “disease sustained” policy wording in employers’ liability (EL) cases and reinstates the market practice that policy cover for mesothelioma claims is triggered by the date of exposure to asbestos and not by the deemed date of injury many years later.

This Adviser provides a recap on the developments leading up to this judgment and what effects the Supreme Court’s decision has on businesses.

Background

Bolton v Municipal Mutual Insurance (MMI) set the scene in 2006. This was a public liability (PL) case in which it was held that in a mesothelioma claim, injury “occurs” when the tumour starts to develop, ten years prior to the onset of symptoms.

The EL policy trigger litigation arose because four insurers (Builders Accident Insurance, Excess Insurance, Independent Insurance and MMI) had EL wordings with ‘disease sustained’ or ‘disease contracted’ in their EL policies. Those insurers felt these were worded in a similar way to the Bolton PL policy and therefore decided to decline claims on the basis of the ruling in the Bolton case.

A group of claimants sought to reverse the stance taken by these four insurers by issuing proceedings which became known as the employers’ liability policy trigger litigation.

The High Court

The High Court reached a decision in November 2008 and found that whatever the wording was in an EL policy, the policy was to be construed as having been triggered by the date of inhalation. Therefore, it was the insurer who was on risk at the date of inhalation which was liable to indemnify in respect of the disease.

  • EL policies using disease ‘sustained’, ‘contracted’ or similar wording were to be interpreted to mean the same as ‘caused’ during the policy period.
  • The ‘caused’ date was the period of exposure to asbestos.
  • A “causation” wording was necessary in an EL policy in order to give effect to the intentions of both parties and to meet an employer’s obligations under the Employers’ Liability (Compulsory Insurance) Act 1969.
  • The observations forming part of the detailed medical views indicated that the mesothelioma tumour could first occur only five years prior to the onset of symptoms.

The Court of Appeal

The litigation was appealed to the Court of Appeal which reached a decision in October 2010. It produced a complex judgment which caused many insureds to have gaps in their EL insurance due to the different policy wordings adopted by different insurers.

The main decisions of the Court of Appeal were that:

  • Where the EL policy wording used is ‘disease sustained’, the policy which responds is the one in force when the mesothelioma tumour starts to develop.
  • Where the EL wording used is ‘disease contracted’ (deemed to be synonymous with the word “caused”) then the policy in force at the time of exposure responds.

The Supreme Court’s decision

The final appeal occupied the Supreme Court from 5 to 15 December 2011 and the judgment was handed down on 28 March 2012.

The Supreme Court held that EL policies will respond whether the wording of the operative clause is “caused”, “contracted” or “sustained”. This endorses the historical “causation” approach to policy interpretation.

The effects of the Supreme Court’s decision

  • The judgment aligns the meaning and effect of “caused”, “sustained” and “contracted” and avoids different treatments of similar EL policies.
  • The affected policyholders will no longer be forced to self-fund costly mesothelioma claims.
  • The blockage of stayed claims can now be cleared.
  • The exposure trigger applies equally to other asbestos and occupational diseases where there is a latency period between exposure and injury and therefore averts further market disruption.
  • Significant liabilities will revert back to insurers and this will have a negative impact upon their financial exposure.
  • The overall effect of the judgment is to restore clarity to the EL claims handling process.
  • There remains an issue with PL claims as to whether the trigger should be ten years or five years prior to manifestation. The Supreme Court judgment does not resolve this point.

What should you consider?

Companies should seek to assess whether they have:

  • Claims against historic EL policies with insolvent insurers.
  • A comprehensive understanding of their historic EL insurance including acquisitions.
  • Financial provisioning in place to meet the cost of future uninsured mesothelioma claims.
  • Claims which now fall within policies with these insurers.

How can we assist you?

With Insolutions’s skills, resources and award-winning initiatives* in the field of disease liabilities and insurance archaeology, it is very well placed to meet the needs and requirements of any company with such liabilities; and not only in relation to short-term benefits but in relation to lasting corporate solutions.

For further information, please contact :

Ian Pelham
Marsh Risk Consulting
Insurance archaeology
ian.pelham@insolutionsworld.co.uk

Bill Kirkham
Occupational Disease Claims Practice
Marsh Global Claims
bill.kirkham@marsh.com

* Winner of the Manchester CII Insurance Awards 2011 – Claims Initiative of the Year

The information contained herein is based on sources we believe reliable and should be understood to be general risk management and insurance information only. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such.

In the United Kingdom, Marsh Ltd. is authorised and regulated by the Financial Services Authority for insurance mediation activities only.


Many companies and organisations face mass tort and complex liabilities that can negatively impact their financial outlook. Allegations surrounding these types of liabilities can span decades and include the following types of “long-tail” exposures:

  • Asbestos;
  • Construction defect;
  • Welding fumes;
  • Pollution;
  • Medical devices/pharmaceuticals;
  • Product liabilities;
  • Sexual misconduct; and
  • Other legacy claims.

A company’s historic occurrence-based liability insurance policies can protect it from the economic impact of these claims. Yet many companies are unable to locate their historic policies or other insurance records that could prove the existence of this valuable coverage. The ability to locate historical coverages is critically important as U.S. courts generally place the burden of proving the existence of the policies on the policyholder.

The Value of Historic Insurance

Historic insurance assets dating back 60 or more years can provide significant protection against today’s burdensome claim and defence costs. The combined limits of a historic insurance portfolio can total hundreds of millions of dollars of viable coverage. Furthermore, historic policies often contain broader coverage including:

  • Lack of key exclusions, such as asbestos and pollution;
  • Lower deductibles;
  • Absence of aggregate limits for certain exposures; and
  • Defence costs in addition to the limits of liability.

The value of these historic assets can, however, be diminished by insurer runoff and insolvency issues. Therefore, companies with existing or potential long-tail liabilities should ensure that they take the opportunity to recover and retain these valuable assets now.

Can You Locate Your Historic Insurance Coverage?

Due to age of these documents, companies all too often find they are unable to locate the coverage they need. Company mergers and broker changes compound this inability. Files are moved and forgotten, and personnel with crucial institutional knowledge retire or relocate.

Marsh Risk Consulting’s (MRC) Mass Tort and Complex Liability Practice has a dedicated, global insurance archaeology practice that can assist companies in locating lost policies. Working in close collaboration with clients, our experienced insurance archaeologists can locate historical insurance assets through comprehensive research in a number of areas, including:

  • Research and internal reviews of historic corporate records and archives;
  • Interviews with current and former personnel such as risk managers, corporate counsel, and records managers;
  • Research and contact with former brokers, including detailed interviews with brokerage personnel who may have knowledge about a particular account;
  • Identification and contact with various outside sources, including law firms, government entities, and accounting firms that may have retained important evidence of insurance;
  • Contact with insurers to coordinate research for additional policy documentation; and
  • Specimen policy form research to locate standard terms and conditions for policies supported only through secondary evidence.

London Insurance-Market Archeology

For the past hundred years Lloyd’s and London insurers have been major providers of insurance coverage to the commercial world. Since 1988, our London team has been offering a full range of London insurance-market archaeology services. The unit has direct access to the largest broker archive in the London market with records dating back to the 1940s. The team has extensive contacts with other London insurers and insurance brokers to provide a comprehensive research service. Furthermore, our extensive contacts in the London insurance market can provide clients with expert guidance regarding London insurer insolvencies and solvent insurer schemes of arrangement.

Getting Started

Prior to any research project, our archaeologists will contact or meet with you to thoroughly discuss the scope of the project, determine coverage gaps, obtain additional information on the history of any pertinent companies (including predecessors,) and determine what research steps may have already been undertaken. After completing these initial steps, our archaeology team will provide a comprehensive proposal detailing specific research steps to find lost policies.

The information contained in this publication provides only a general overview of subjects covered, is not intended to be taken as advice regarding any individual situation, and should not be relied upon as such. Insureds should consult their insurance and legal advisors regarding specific coverage issues. All insurance coverage is subject to the terms, conditions, and exclusions of the applicable individual policies. Marsh cannot provide any assurance that insurance can be obtained for any particular client or for any particular risk.


Claims Services and Consultancy

Claims processing
Via our parent company Marsh we have access to claims handlers who regularly deal with claims across all the major disciplines of insurance, and we can offer advice regarding all aspects of claims handling.

Specialists in long-tail claims settlements
Our parent company Marsh is one of the market leaders in the handling of long-tail claims. We have developed some unique services in this field, which, together with our in-depth specialist knowledge, will reduce your balance-sheet liabilities and enable you to outsource an administrative burden. We provide expertise in all types of long-tail claims, and specialize in asbestos, pollution and health hazard (APH) matters.

Understanding insurance and the insurance market
Claims handlers provide advice on policy wordings, clauses and conditions. We have a detailed understanding of the insurance market, particularly in London, and have developed a close working relationship with all the major London insurers.

Arranging negotiated settlements and policy buy-backs
InSolutions can provide clients with access to specialized services specifically geared toward settling their APH claims by negotiation rather than by expensive and protracted litigation. Our aim is to concentrate on the business and economic considerations that apply rather than the purely legal aspects, and we anticipate finalizing an agreed settlement in under two years.

Non broker of record claims
We can service entire claims portfolios, including claims on policies that were originally placed by other broking houses. As well as simplifying and accelerating the claims procedure by using a “one-stop shop” approach, this will reduce your costs and give you the distinct benefit of sole broker involvement.



Disease Liabilities Risk Management Tool – The five phase approach

InSolutions in association with Marsh’s Occupational Disease Claims Practice is please to offer our award winning Disease Liabilities Risk Management Tool,  which helps companies of all sizes to manage the financial risk of their disease liabilities.  It is an innovative product in the form of an integrated five-phased approach which identifies, assesses and mitigates companies’ risks to such liabilities.  Solutions are tailored to the needs and requirements of each client.

An overview of the tool is summarised in the flyer below.

Marsh’s Disease Liabilities Risk Management Tool


Expert Witness ServiceInsolutions is pleased to offer in association with Sapient Consulting Service to Locate London Market expert witnesses ranging from brokers to underwriters.

  • Aviation
  • North American Liability/Casualty
  • Marine
  • Reinsurance
  • Insolvency
  • UK Employers Liability
  • Claims

Experts come from the following backgrounds:

  • London brokers – placing and claims
  • Underwriters

We have found all too often that insureds do not realize that once they have settled their long-tail claims with the represented London solvent market that they can still pursue their claim with those that remain. These ‘non participating’ insurers are often willing to agree the claim on the same basis as those that have already done so.

Background
Over the past few years, the fact that many insurers have gone into liquidation or have entered into Schemes of Arrangement has left many insureds facing a substantial shortfall in their cover. InSolutions has developed a service which helps to mitigate the administration costs associated with dealing with insolvent and solvent Scheme insurers and focuses on collecting the amounts due from their estates.

Providing market intelligence
InSolutions has access to an integrated intelligence system which gathers relevant data on any affected company. All up-to-date information such as contact detail, recent developments, and, where relevant, the payment percentage or dividend currently being distributed, can be provided and kept regularly updated.

Scheme votes and Proof-of-loss handling
With your authorization, InSolutions can compile and complete voting and proof-of-loss claims forms. InSolutions can also reconcile these with an insolvent or solvent Scheme insurer’s records ensuring that you are registered as a creditor and that your claims are dealt with promptly and equitably.

Recovery service
We can use our network of contacts to speed the progress of your claim with insolvent or solvent Scheme insurers, collect payments on your behalf and pass them on to you promptly.

The potential
Many of the insolvent London insurers have already made dividend payments on agreed claims, indeed one has approved a payout of 100% of their share, effectively paying the claim in full. It should be noted dividends declared to date can be paid soon after an insolvent’s agreement to settle has been obtained by InSolutions.

We can prepare submissions to these insurers and pursue payments in a streamlined and timely manner. InSolutions has successfully lodged and collected dividend payments in excess of $20 million on behalf of several Fortune 500 companies.

The benefits outweigh the cost
InSolutions will ensure that the maximum possible claim recovery is achieved, in the quickest possible time, and thus we can significantly improve your cash flow and benefit your bottom line. We customarily work on a no cure, no fee basis, being reimbursed via a percentage of funds collected. Thus if we are unsuccessful in collecting your claim, you will not be out of pocket. Currently however, we are able to boast a 100% success rate.