General liability coverage is insurance that responds to sums that the policyholder is legally obligated to pay as damages because of bodily injury or property damage to third parties (and generally will also include either a duty to defend such claims or to reimburse defense costs). Thus, general liability coverage would respond to such tort claims as slip-and-fall lawsuits and product liability exposures. In addition, most such policies also cover certain enumerated personal or advertising injury offenses (such as defamation or disparagement).

Most general liability policies are written on an “occurrence” basis. An occurrence-based general liability policy is triggered to respond by bodily injury or property damage taking place during its policy period, regardless of when the claim is made against a policyholder. Given multi-year statutes of limitations for many torts and the possibility of latent injuries, this means that it is frequently a prior year’s occurrence policy (or policies, for long-term injury claims) that responds to a claim that comes in during the current year.

Continue Reading Key Issues to Consider When Contemplating a Switch From an Occurrence-Based to a Claims-Made General Liability Insurance Program

Companies that wish to have higher limits of insurance than their primary (or umbrella) insurance companies are willing to provide usually can purchase excess insurance policies. Excess policies respond to losses above the limits of the primary layer of coverage. A company may purchase multiple layers of excess coverage from different insurance companies, creating a tower of coverage, with the primary layer at the bottom, and one or more excess layers at the top.
Many excess insurance policies are written as “follow-form” coverage. That is, rather than containing a full set of terms and conditions themselves, the excess policies “follow form” to, or incorporate by reference, the terms and conditions of a policy in a lower layer. Follow-form excess policies therefore tend to be shorter than policies that need to set out all of their own terms. The general idea behind follow-form excess coverage is to provide a seamless tower of coverage to the policyholder to respond to large losses.Despite their brevity, the mechanics of follow-form excess policies do not always work as smoothly as intended. This post sets out a number of traps for the unwary that sometimes are hidden within excess insurance policies. As described below, most of these can be avoided if policyholders and their advisors are vigilant when purchasing excess policies, and stay away from those with language that could lead to unintended results. 
Continue Reading Avoiding Traps for the Unwary in Excess Insurance Policies

A merger, acquisition, or other corporate transaction can raise a number of issues for the insurance coverage of the parties involved.  The transaction may affect the parties’ current coverage and their rights under their historic policies.  The parties will want to specify clearly the intended interplay of other aspects of the deal, such as indemnities, with available insurance.  And the parties may wish to consider purchasing various types of insurance for aspects of the deal itself.
Continue Reading Insurance and Mergers & Acquisitions

It is becoming increasingly important for tech companies considering a merger, acquisition, or other corporate transaction to understand the use of Representation & Warranty Insurance (“R&W Insurance”). R&W Insurance is a type of insurance policy purchased in connection with corporate transactions; it covers the indemnification for certain breaches of the representations and warranties in the transaction agreements. It is designed to provide additional flexibility in addressing these obligations by, for example, reducing or eliminating the need for an escrow by the Seller. 
Continue Reading Representation and Warranty Insurance Coverage for Corporate Transactions