The Insurance & Risk Report
July 2014
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Who Says Insurance
Can't Be Fun?
Lloyds of London Uses Insurable Value to
Predict Winner of 2014 World Cup
Lloyds of London, the 325 year old insurance market, thinks it can predict the winner of the 2014 international world cup based upon the insurable values of each country's team.  Click here to see Lloyd's prediction.
Certificates of Insurance
Proposed Michigan Law Heads to Governor's Desk 
The Michigan Senate has concurred with the House in the bill which would prevent an insurance agent from altering or modifying a certificate of insurance that changes the terms and conditions of the policy and prevents a person from requiring or pressuring someone to alter a certificate. The bill now goes to the Governor. See Senate Bill 715.
Michigan Trespasser Law Likely

It is likely that the Michigan Legislature will pass a bill currently before the House and Senate which would substantially limit the liability of landowners for injuries incurred by trespassers.


Click here for more information.

Recent Interesting Projects
  • Testified in arbitration involving builder's risk issue.
  • Retained to evaluate 100+ franchisee member insurance program.
  • Retained in contingency
    commission case involving reinsurance placements.
Our Experts Have Been Published In The Following:
  • Insurance Law & Practice (ICLE)
  • Michigan Lawyers Weekly
  • The Michigan Bar Journal
  • The CPCU Journal
  • The Michigan Agent Magazine
Looking to Assess a Claim Denial?
Commercial or personal lines claim denial or reservation of rights?  We can help assess the insurer's position 
and provide input on the claims process. Call us at 248-321-8941 for additional information.
How Clairmont Can Help You
  • Expert help from seasoned insurance attorneys who are also insurance brokers.
  • Checklists on commercial and personal key coverage provisions.
  • Best practices from our how-to guides on handling errors and omissions cases.
  • Time-saving sample insurance requirements provisions and waivers of subrogation.
  • Review of insurance programs and broker selection / oversight.
  • Insurance pricing reduction consultation.
  • Risk management services including contract and lease review.
  • Review of insurance requirements provisions in lender / bank relationships.
Michael S. Hale, J.D., CPCU, AAI
In this Issue we discuss three recent cases out of the  Michigan Court of Appeals on insurance and risk management related topics.
We also point out the potential uncovered liability of businesses for unsolicited facsimiles and text messages based upon a recent settlement.
Finally, we cite a specific publication from  the Marsh McLennan Agency on best practices in purchasing business insurance. 

We hope that you find these articles of interest. If we can be of assistance to you, please contact us.

Sports Release May Not Bar Claim for
Severed Achilles
In an April 17, 2014 decision the Michigan Court of Appeals analyzed whether a claim for a torn Achilles heel at an exercise facility was barred by a waiver and release signed by the participant.
There, the release applied to "injur(ies) or death that may result from participation in any activity or class" and "in any way connected with my participation in this activity."
The court determined that a factual question existed as to whether the injured person was engaged in physical training when he was injured.  There was a dispute as to whether the person was standing around waiting or was actually engaged in training.  If the former, the release would not apply.
This case provides an important lesson on language in a sports release or any release for that matter.  
 Unsolicited Faxes or Excessive Texts Can Expose Businesses to Substantial Liability
Using facsimiles or text messaging for alerts or marketing to consumers?  Be cautious of the Telephone Consumer Protection Act.
In a recent case, the Buffalo Bills paid $3,000,000 to settle a class action suit involving sending more text message alerts than its terms of text service allowed.
This law also governs unsolicited faxes.
Note that many insurance policies specifically exclude such activities. 
As a result of the above, be cautious in marketing through text messages or unsolicited faxes.
No Profit Requirement to be Liable for Joint
Venture Enterprise

Involved in business with another enterprise?  You could have liability under the joint enterprise doctrine.  This doctrine holds that the negligence of one organization is imputed to another where there is a "joint enterprise."


In a April 17, 2014 case, the Michigan Court of Appeals reiterated that those companies engaging in a joint enterprise can be liable for the acts of the other parties if every member has an equal right of control and joint responsibility for decision making and expenses.  However, there is no requirement that the parties share profits.


Joint enterprises can expose the parties to liability for the other company's acts.  This can sometimes be managed by way of a properly negotiated indemnity and hold harmless agreement.

 Wishful Thinking:
The Reasonable Expectations of Policyholders?  

Kenneth R Hale, Chairman of Cambridge Property & Casualty, a Marsh McLennan Agency, is one of the most experienced insurance professionals in the country.


Mr. Hale recently published an article entitled "Wishful Thinking" in which he discusses the most important lesson his organization has learned on insurance: Courts will enforce the words of insurance policies over any reasonable expectations of the insured.


Where most buyers get it wrong in buying insurance is assuming that insurance companies will make good on coverage even if the policy language supports a denial.  We see this type of wishful thinking almost every day in our practice.  In Michigan, the reasonable expectations doctrine is not recognized as a way to interpret unambiguous insurance policy language.


The insurance agent you select can, in some ways, be more important than the insurance company writing the account.  A competent agent will read the policies, negotiate the better terms and conditions and discuss potential coverage issues with the buyer.


For a complete copy of Mr. Hale's white paper, please click here

Health Insurance Agent Sued for Misrepresentations on Application 

In a May 1, 2014 decision, the Michigan Court of Appeals analyzed a lawsuit against an insurance agent for misrepresentations in an application for insurance and whether there was a duty to provide alternate coverage through Blue Cross Blue Shield.


In that case, the mother of the injured person had applied for coverage for her son and met with an independent insurance agent.  The application asked her son's weight and if he engaged in "scuba or skydiving, organized racing, flying or other hazardous activities."  The mother answered "no" to this question and stated that her son's weight was 249 pounds.  The application was later e-signed by the son.


The insurance company sent a letter to the son indicating that his application was under review. During the pendency of that review, he was hurt in a motorcross accident and the insurer denied coverage stating that he misrepresented his weight (he was over 300 pounds) and cited his history with organized motorcross racing.  The insurer rescinded the policy.
The son argued that the independent agent his mother purchased the policy from owed a duty to "ensur[e] that the insurance contract properly addresse[d] their needs" and that he breached that duty by not offering a Blue Cross Blue Shield policy.  However, the Court of Appeals determined that the son did not provide enough evidence to show that the Blue Cross policy would have provided coverage under these facts.


This case provides lessons for policyholders and insurance agents on the importance of accurately completing insurance applications.

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