Covered for Intellectual Property Infringement Risks?

You may not even be aware of a critical breech in your general liability coverage. But you’re not alone. Many businesses carry little to no intellectual property infringement coverage, when, in fact, they would be wise to do so.

Over the past decade or so, there has been a growing trend by many insurers to dramatically reduce coverage for advertising injury in general liability policies. In addition, newer policy forms exclude coverage for trademark and patent infringement claims altogether.

The common misconception is that this coverage applies primarily to the publishing industry. But, if your business has any involvement with media, technology, or both, you may need to conduct a risk audit to uncover exposure to potential intellectual property infringement claims.

Does your business need intellectual property insurance?

Businesses which might be exposed include:

  • Publishing companies
  • Companies which mimic a popular brand slogan or name in their own advertising
  • Companies involved in e-commerce
  • Any company which has a web presence
  • Media companies which specialize in advertising, publishing, broadcasting, photography and similar related professions 

Types of insurance 

Depending on your exposure, available coverage options include: 

  • Intellectual property insurance which is a more encompassing form of insurance to enforce your patents and also extends coverage to copyrights and trademarks.
  • Patent insurance to protect holders of patents from patent infringement losses.
  • Liability insurance for patent infringement to protect sellers, manufacturers and also users when a claim is brought against them for alleged infringement of patents.
  • Specialized media liability insurance for any company which specializes in any media format.
  • Advertising injury insurance to cover any potential claims that stem from advertising campaigns.  An advertising injury is any statement made in advertising that causes loss to another person or entity.

Types of coverage 

There are generally three types of intellectual property insurance coverage currently available which include: 

  • Legal defense only which will provide coverage for the costs of legal defense but nothing for any awarded damages.
  • Indemnity and legal defense which pays for both legal defense costs and any awarded damages.
  • Enforcement coverageto pay for any legal costs to pursue an intellectual property infringement claim against a third party.

To qualify for intellectual property insurance you may be required to show that you have performed an Intellectual Property Search or have registered for a patent, copyright, or trademark.

Intellectual property is specialized insurance coverage. Premium differences for any form of intellectual property infringement coverage vastly differ so carefully examine what each policy covers and excludes. You may need to consult with both your insurance broker and your legal counsel to limit your risk exposure.

Choose a Safe Car for Your Teenage Driver

If you’re the parent of a teenager, you may have very mixed feelings about the day your teen gets a driver’s license. On the one hand, you’re proud that your teen has reached this milestone, but on the other hand, you’re worried about reckless driving and safety issues.

You have good reason to be concerned. Motor vehicle crashes are the leading cause of death among teens, according to the Centers for Disease Control, accounting for 36% of all deaths in this age group. In 2004, 4,767 teens ages 16 to 19 died due to motor vehicle crashes, and during 2005, nearly 400,000 teens sustained nonfatal injuries serious enough to land them in the emergency room. According to the Insurance Institute for Highway Safety (IIHS), per mile driven, teens are four times more likely than older drivers to crash.

The Insurance Information Institute (I.I.I.), together with the IIHS, advises parents of teenage drivers to do more than worry. They should take a proactive role in protecting their teens. This starts with selecting a safe vehicle:

-Avoid vehicles that encourage reckless driving. Teen drivers not only lack experience…they also lack maturity. As a result, speeding and reckless driving are common. Sports cars and other vehicles with high performance features, such as turbo charging, can encourage speeding. Choosing a vehicle with a more sedate image will reduce the chances your teen will be in a speed-related crash.

-Don’t let your teen drive an unstable vehicle. Sport utility vehicles are inherently less stable than cars because of their higher centers of gravity. Abrupt steering maneuvers-the kind that can occur when teens are fooling around or over-correcting a driver error-can cause rollovers where a more stable car would, at worst, skid or spin out.

-Pick a vehicle that offers good crash protection. Teenagers should drive vehicles that offer state-of-the-art protection in case they do crash. Review the IIHS and National Highway Traffic Safety Administration test results when selecting a vehicle.

-Don’t let your teen drive a small vehicle. Small vehicles offer much less protection in crashes than larger ones. However, this doesn’t mean you should put your child in the largest vehicle you can find. Many mid- and full-size cars offer more than adequate crash protection. Check out the safety ratings for cars in this group.

-Avoid older vehicles. Most of today’s cars have better-designed crash protection than cars of six to 10 years ago. For example, a newer, mid-size car with airbags would be a better choice than an older, larger car without airbags. Again, before you make a final choice on the car your teenager will drive, consult crash test results and safety ratings.

With time and experience, your teen will become a seasoned driver and move out of the highest-risk category. Incorporating these suggestions into your car selection will help him or her to get there, safely.

Understanding Waivers of Subrogation

Suppose an air conditioning contractor, while installing a system for a new industrial building, has an accident. Another contractor’s employee on the job site suffers injuries when the AC contractor’s scaffolding collapses and falls on top of him. The injured worker sues the AC contractor and the project owner. The project’s contract included a requirement that the contractor assume the owner’s liability for any accidents arising out of the contractor’s work. Consequently, the contractor’s general liability insurance company pays the injured worker for both the contractor and owner’s shares of the damages. The insurance company, however, has determined that the owner was twenty percent responsible for the accident. It files a claim with the owner demanding some of its money back.

The insurance company’s action is entirely legal. Many project owners and general contractors, wanting to avoid this situation, insist that their subcontractors agree to a waiver of subrogation.

Subrogation is a legal principle in which a person who has paid another’s expenses or debt assumes the other’s rights to recover from the person responsible for the expenses or debt. For example, if someone hits your car in a parking lot and causes significant damage, your insurance company will pay you for the damage (assuming you bought collision insurance,) then recover the amount of its payment (subrogate) from the other driver (or, more commonly, from the driver’s insurance company.) Subrogation holds ultimately responsible the person who should pay for the damage.

Owners and general contractors want to transfer their liability to subcontractors, to the extent that they can. Therefore, contracts often include a waiver of subrogation agreement. In such an agreement, the subcontractor promises not to pursue recovery from the other party. That agreement might bind the subcontractor’s insurance company, depending on the type of policy and its terms.

A standard commercial general liability policy forbids the policyholder from doing anything to impair the insurance company’s rights after the loss occurs. This implies that a waiver of subrogation agreed to before a loss binds the company. Also, the sub’s policy may protect the other party if it names him as an additional insured. Under common law, an insurance company may not subrogate against its own insured. To remove any doubt, the sub should ask the company to add an endorsement applying a waiver of subrogation to the person or organization named in it. Insurance companies vary on the amount of premium they charge for this; some make no charge at all.

The standard business auto insurance policy has language similar to the general liability policy. Unlike GL insurance, there is no standard waiver of subrogation endorsement for auto insurance. Some insurance companies may offer their own versions of such an endorsement. Again, premium charges will vary.

Workers’ compensation policies require an endorsement whenever a waiver of subrogation is desired. This endorsement may apply on a blanket basis to all parties with whom the insured has written contracts requiring waivers. Alternatively, it can apply only to the party listed on its schedule. The insurance company may charge up to two percent of the policy premium for blanket coverage or two to five percent of the project’s premium for individual coverage.

Commercial property and inland marine insurance policies vary as to whether they permit waivers of subrogation even before a loss.

In all cases, a contractor or building tenant who is required by contract to provide such a waiver should check the relevant insurance policies. Policy changes should be requested if it is unclear whether they permit pre-loss waivers. The firm should consult with an insurance agent on all insurance-related contractual matters to ensure that the proper coverage is in place.

Risky Behaviors Behind the Wheel Can Lead to Car Crashes

Drivers do the strangest things when they’re behind the wheel, but how many of those activities actually cause accidents? Dr. Sheila Klauer, a senior research associate at the Virginia Tech Transportation Institute, and her research team examined driver behavior to find the answer to this question.

The researchers, sponsored by the AAA Foundation for Traffic Safety, looked at the daily driving habits of more than 240 study participants in and around Washington, D.C. The drivers’ vehicles contained five digital video cameras and a “black box” that registered following distance, lateral acceleration, speed, forward acceleration, braking and other data.

After viewing videos of 82 collisions, 761 near-crashes and 8,000-plus incidents in which the study participants were involved, researchers identified four specific behaviors that increase the odds of having a crash:

·   Speeding-The researchers defined speeding as driving faster than prevailing traffic or driving at a speed “inappropriate” for conditions.

Speeding nearly tripled the crash odds.

·   Driving while drowsy-Drowsy drivers were defined as those who stare fixedly through partially closed eyes. The chief characteristic of this type of driver is lack of eye movement. Most drowsy-driving episodes occurred during broad daylight. This behavior also tripled the crash odds.

·   Becoming distracted while driving-The distractions that caused accidents required drivers to look away from the road for two seconds or more. They included such activities as applying make-up, dialing a cell phone, searching for a CD or reading behind the wheel. This kind of behavior doubled the crash odds, and the increased crash risk shows how quickly and unexpectedly traffic conditions can change. Even when the driver maintained a safe following distance, this didn’t prevent distraction-related accidents. For example, many of the rear-end crashes in the study occurred while a driver was keeping a greater-than-two-second headway behind the car in front.

·   Aggressive driving-Researchers defined aggressive driving as using a vehicle to menace another driver or pedestrian. This included behaviors such speeding, weaving in and out of traffic, running stop signs, tailgating and frequent lane changes. Oftentimes the driver exhibited a combination of these activities. Aggressive driving doubled the risk of a crash.

The researchers’ work has a number of potential applications. For example, the risky behaviors can be studied independently to determine how they contribute to crashes when associated with particular types of drivers, and videos and black-box readings can be used to develop collision-avoidance systems. But most importantly, for each and every driver on the road, this research shows just how important it is to stay alert and keep your eyes on the road at all times.

Key Coverage Options under Employment Practices Liability Policies

Uninsured employment practices claims can devastate a company. Many organizations find Employment Practices Liability Insurance essential to their risk management programs. Once a firm decides to buy EPL coverage, it must weigh several important coverage options.

A business can buy a stand-alone EPL policy or as an additional coverage on a Directors and Officers Liability policy. Adding it to a D&O policy may be less expensive, easier to manage, and the defense provisions for the two coverages will be consistent. However, a stand-alone policy provides additional limits, offers more flexibility in terms of defense provisions, and may offer broader coverage.

The firm also must choose the deductible amount (also called the “self-insured retention.”) A relatively low deductible means lower out-of-pocket costs when a loss occurs but a higher premium. It can also mean even higher future premiums or policy non-renewal if the firm suffers frequent small losses. A higher deductible reduces the immediate premium and may help lower future costs, but can also be a strain on a firm with frequent losses or troubled finances.

Policies can either obligate the insurance company to provide defense when a loss occurs or they can relieve the company of that duty. With a “no duty to defend” policy, the firm controls the selection of legal counsel, decides which claims to contest, and manages its reputation. However, this can involve considerable upfront expense — the firm must pay for the defense and settlement first, then seek reimbursement from the company. Also, the firm may lack the expertise in claims handling that an insurance company can offer.

Some firms, such as retail stores, medical offices, and restaurants, have frequent exposure to customers. These firms may be susceptible to claims that an employee harassed customers. Standard EPL policies and Commercial General Liability policies do not provide third party coverage for claims made by people other than employees or job applicants. Therefore, firms like these may want to add this coverage to their EPL policies. This will cost an additional premium, but the additional cost may be much less than the cost of uncovered claims.

Studies have shown that courts award punitive damages in a large number of employment practices cases. These damages can run into hundreds of thousands of dollars. While not all states permit insurance to cover punitive damages, firms in those states that do may want to consider buying it. Insurance companies may offer it subject to the regular policy limits, or only with reduced limits. The cost is normally some percentage of the standard policy premium.

EPL policies provide coverage on a “claims made” basis, meaning that they cover claims submitted to the insurance company during the policy term. The policies normally contain a “retroactive date;” they will not cover claims for incidents that occurred prior to that date. For example, a policy with a retroactive date of January 1, 2004 will cover claims submitted during the policy term if they occurred on or after January 1, 2004. The retroactive date can be the same as the policy’s inception date or some prior date. The earlier the retroactive date, the more claims the policy may potentially cover and the higher the policy premium will be. Firms buying EPL coverage for the first time or switching insurance companies may want to purchase early retroactive dates.

The correct choices for these options will vary greatly, depending on a firm’s characteristics and needs. An insurance agent experienced with EPL policies can provide guidance for these decisions. Because employment practices claims can be so costly, it is worth it to weigh these options carefully.

Know When to File an Auto Insurance Claim

If your car has become damaged in an accident, through vandalism or from another cause, filing a claim with your auto insurance company isn’t always the best course of action. For example, if your deductible is more than the cost of the damage, it’s a good idea to pay for the repairs yourself and not report the claim. Each time you do decide to file, even if the damage is less than your deductible, the report goes on your insurance record. Although small claims don’t affect your individual premium, insurance companies use information from policyholders to establish the overall premium rates they charge their entire customer base. The more accidents reported, the higher the premium rates the company charges.

Legally, you aren’t required to report an accident to your insurance company. The reason your company requests that you report every accident is so that it can protect itself against possible fraudulent claims. Documenting each accident helps an insurer spot a current claim for damages that really happened in an earlier accident.

If you already have a speeding ticket on your record, and your car is damaged at a later time, you have another reason to think twice about filing a claim with your insurer. That’s because in some states, if you file a claim for an at-fault accident and you have been previously ticketed, you may not be able to renew your auto insurance policy.

However, if there’s another car involved in the accident, or someone else in the car with you at the time, it’s important to report the accident. You never know if the passenger or other driver will file a claim on your insurance, and you should report the accident to make sure that your side of the story is documented with both the police and your insurer.

Another reason to report an auto accident involving another car or passengers is that injuries are not always immediately apparent. Your carrier should have a report on file in the event you, or someone else involved in the accident, sustain injuries that show up the next day and which require medical treatment.

While you should always consider carefully before you file an auto accident claim, you should never stockpile comprehensive claims. It may seem logical to file a number of small damage claims together; however, insurers watch for excessive repair estimates for comprehensive claims and your carrier may question the validity of the claim.

There is a growing trend toward nonrenewals and tighter restrictions on what is covered across the industry. Save your car insurance for expensive damage, and plan ahead so you can pay for the smaller repairs yourself.

Financing Environmental Loss with Environmental Insurance

Virtually every type of business has some exposure to losses caused by pollutants. The classic example is a factory dumping waste in a river, but health care facilities have medical waste, schools have fleets of busses and fuel storage facilities, print shops have inks and solvents, and offices have toners and other substances used in office equipment. Standard commercial general liability insurance does not cover many types of pollution incidents that could result in lawsuits. However, many specialized policies are available.

Every contractor has some exposure to pollution-related losses. Heavy equipment can leak fluids. Paints and solvents can spill at a job site. Fuel storage tanks at the contractor’s building can leak. A truck hauling hazardous debris from a job site can overturn. To protect themselves against these types of losses, contractors can purchase Contractor’s Pollution Liability Insurance. These policies protect the contractor against claims from third parties for bodily injury, property damage and cleanup costs, and will pay the costs of defending lawsuits. The claim must result from a “pollution incident” (as the policy defines the term) for coverage to apply.

Firms outside the construction industry may need Pollution Legal Liability Insurance. Insurers have designed these policies to address the environmental risks associated with owning property, operating a facility, or running a worksite. Manufacturers, hospitals, schools, power plants, repair shops, and fuel distributors are just a few businesses that need this protection. Like the contractors’ form, it covers injuries, property damage, cleanup and defense costs. However, this policy applies only to specifically identified locations. It can cover multiple exposures, such as new and existing pollution conditions, pollution caused by products the firm sells, liability from the existence of mold, and liability from transporting pollutants.

Many organizations have fuel storage tanks above or below ground. If they leak, the resulting cleanup costs can be very expensive. A Tank Pollution Liability policy will pay for injuries and damage to others and government-mandated cleanup costs.

Lenders run the risk that their debtors will default on loans because of a pollution incident. Lender Liability Pollution policies can address this risk by covering financial loss resulting from the default of a loan on an identified location due to a pollution incident. The policies typically pay the amount of the outstanding loan balance or the cost of remediation, whichever is less.

Many products are either hazardous themselves (such as fertilizers, fuels, paints and cleaning chemicals) or are designed to contain or store hazardous products (such as drums, hoses, tanks, and pumps.) Manufacturers, distributors and sellers of these products are vulnerable to liability for harm they cause. Products Pollution Liability policies cover injuries, damages, and remediation costs resulting from the failure of a product or caused by the product itself.

Property owners and remediation firms that implement pollution cleanup projects sometimes get nasty surprises in the form of cost overruns. To give these firms some certainty for projects costing $2 million or more, Remediation Cost Cap policies are available. These programs cover losses resulting when contamination is greater than expected, new contaminated areas at the site are discovered, regulatory requirements change during the project, or when regulators re-open projects that were thought to be complete.

The terms and conditions of all these policies will vary from one insurer to another, so it is important to review them carefully. It is also advisable to consult with an insurance agent with expertise in environmental insurance. An uninsured pollution loss can devastate an organization. Environmental liability insurance, chosen carefully, can help ensure your organization’s survival.

Reduce the Dangers of Driving in the Dark

With winter’s arrival, most people find themselves spending more time driving in the dark with decreased visibility. While you can’t change the fact that there are fewer daylight hours, you don’t have to be hampered by poor visibility.

Protect your night vision by wearing a hat and sunglasses during the day when exposed to bright sunlight. The retina in the human eye contains photoreceptors, which have pigments that change shape when struck by light. This change process is called “bleaching.” Very bright light, like sunlight, may bleach so many of the pigments in a photoreceptor that it cannot respond to any other visual stimuli for a while, which means your eyes can have trouble adjusting to the dark. The longer your eyes are exposed to the sun, the worse your night vision gets.

Consider taking a daily multi-vitamin to enhance your vision. In numerous studies and clinical trials antioxidant vitamins, such as vitamins A, C, and E, have been linked with eye health. They help to maintain healthy cells and tissues in the eye.

There also are things you can do to your car, and steps you can take while driving at night, to enhance visibility-

·   Clean your windshield at least once a week. Light is refracted through a dirty windshield, which intensifies glare. In addition, a clean windshield will have less reflection. Wash your headlights as well. Even a thin layer of grime can reduce the light headlights emit by as much as 90%.

·   Dim the dash lights. The dimmer the light inside the car, the better you can see outside. Your instrument panel should just be bright enough for the instruments to be readable.

·   Adjust your outer (side view) mirrors. Sit in the driver’s seat, and tilt your head until it rests against the window. Adjust the driver’s side outboard mirror until you can see the rear fender at the edge of the glass. Then tilt your head to the right until it’s at the center of the car. Adjust the passenger side outboard mirror until you can see the rear fender at the edge of the glass. These adjustments will reduce blind spots, and prevent the bright spots in trailing cars’ headlights from shining directly into your eyes. 

·   Avert your eyes away from the lights of oncoming cars. When oncoming headlights shine into your eyes, look at the white line marking the edge of the pavement.

·   Fill your gas tank with one eye closed. This helps you recover from “flash blindness,” the condition that results when a few seconds of brightness temporarily interfere with your night vision. Closing one eye preserves night vision in that eye, and you can use it when you resume driving while your other eye adjusts to seeing in the dark.

Though nighttime driving is a time of reduced visibility, you can make it a safe driving time by following these suggestions.