Insurance Law Outline – Spring 2008 (Dunham)
The Final Exam
– Opens on the first day of exam period and closes 7 days later.
– Have all 7 days to finish the test.
– 4 questions and only have to choose 3.
– 1 page limit for each question.
– Can use any source you want.
I. Introduction
1) What is insurance?
– Transfer of risk to insurance company.
– Coverage for Fortuitous Losses
o Losses that are not known or in progress.
o American Insurance companies do not protect against losses already in progress.
o The London market does cover losses in progress but they are nuts and charge a lot.
– Types of Insurance
o Primary: 1st dollar spent
o Excess: doesn’t kick in until primary coverage is exhausted.
o Umbrella: higher level of dollars, but protects what primary and excess does not pick up.
o Re-Insurance: insurance on the insurance.
o Retro-Sessionaires: insurance on the re-insurance.
– Drivers
o Insurance policies
o Insurance K’s
– Basic Parts of Policies
o Declaration Page
§ How much
§ Term
§ Possible Exclusions
§ Premiums
o Grant of Coverage
§ “will insure against any losses sustained as a result of fire”
o Exclusions
§ What is not covered.
§ Very extensive
§ Very important
o Definitions
o Endorsements
– Types of Policies
o Form
§ Pre-written policy, lots of small writing.
o Manuscript
§ Customized policies
§ Much more of K from the beginning, lawyers from client and insurer write out the particular policy (more common on London market).
– How to Construe
o Intended v. Expected
o Courts try to construct the intent of the parties.
o Must consider Parole and Extrinsic Evidence.
o Courts generally enforce the plain language of the policy.
o Courts will try to determine the intent of the parties by looking at the 4 corners of the policy – if it can be determined just by the 4 corners then that is the end
§ If however there is a real issue then they often go to the Parole Evidence Rule
§ A way to avoid this is for the lawyer to wri
nce companies advantage.
§ Failure to disclose must be material.
· i.e. Saying one employees 250 employees when the number is 248 is not “material.”
3) Brining a Claim
– Obtain all of the relevant facts.
o Do not allow any new facts come out at trial.
– Analyze the policy.
– Write a letter to INS company
o Explain COA,
o Layout policy,
o Layout facts of claim with great clarity,
o Go over each and every relevant exclusion and tell INS company why exclusion is NOT applicable.
– Will probably receive a Reservation of Rights letter from the INS company.
o Letter stating that INS will pay, but if found that action is not covered in the future, INS retains the right to recover payment.
o Also requires that defense costs be refunded as well.
– At this point, keep digging up the facts.
