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Posts Tagged ‘insurance policies’

Independent Contractor vs Employee Status in the Gig Economy

Posted on: May 31st, 2018

By: Daniel Walsh

As recently noted by FMG’s Connor Bateman, Courts across the country are now reexamining coverage issues stemming from auto insurance policies held by drivers working with Transportation Network Companies (“TNCs”) such as Lyft and Uber.

In Dynamex Operations W. v. Superior Court, 2018 Cal. LEXIS 3152, the California Supreme Court set forth a refined and more inclusive standard on the classification of employees vs. independent contractors in the “gig economy” commonly associated with Lyft and Uber but also extending to various delivery services.   An underappreciated side effect of this decision is the effect upon coverage issues that have been litigated for years throughout California courts.  With a robust gig economy in California, the Courts have seen a high number of general liability cases that have turned upon the Trial Court’s interpretation of employee vs independent contractor status.  This, in turn, has created a high volume of declaratory relief lawsuits centered upon liability coverage for the actions of a gig economy participant, as most insurance policies grant coverage to an employee but deny it to an independent contractor.  With the Court clarifying that distinction in Dynamex, California insurance coverage opinions regarding personal injury liability in the gig economy will now require a new focus and analysis.

If you have any questions or would like more information please contact Daniel Walsh at [email protected].

Are We Speaking the Same Language?

Posted on: July 15th, 2014

By: Seth F. Kirby

When describing insurance coverage analysis to individuals unfamiliar with the nature of my practice, I often compare it to assembling a puzzle.  Coverage counsel has to examine the claim presented to determine if it fits within the framework of coverage set forth in the insurance contract.  Of course, the puzzle pieces that we are examining, and the framework in which they are placed, are not three definitional objects with tangible shapes.  The puzzle pieces that we use to define coverage and set forth claims are words.  Unfortunately, words are imprecise and frequently fail to adequately express our desires.  The scope of coverage provided by a policy, the nature of a claim asserted by a plaintiff and the applicability of a policy exclusion can turn on the interpretation of a single word or phrase.

In cases involving the interpretation of insurance policies, courts across the nation will frequently cite the maxim that words are to be given their common and ordinary meaning.  Nevertheless, convincing a court what a particular word means is always a difficult proposition, and if an ambiguity exists, then it will be construed in favor of coverage.  A carrier can legitimately believe that a word or phrase is crystal clear, only to be told that its interpretation is flawed.  Why does this happen?

A recent article published on Slate.com may provide some insight regarding this question.  In “Why Do You Think You’re Right About Language?  You’re Not.” author Gretchen McColloch investigates a concept known as “micro-language.”  In short, she explains that “micro-language” is the intuitive sense of what sounds like proper use of the English language and what doesn’t.  The intuition is developed based upon the listeners’ interactions with other speakers throughout their life.  It is shaped by geography, education, age, gender, level of education, family influence and other factors.  “A doctor who watches a lot of sci-fi will have a slightly different vocabulary than a lawyer who reads a lot of historical fiction, and both of them will have a slightly different vocabulary from their neighbor who’s a birdwatcher. Just as no two people live the same life, no two have the same set of linguistic influences. In other words, no two people end up speaking the same language.”

Ms. McColloch’s article is a fascinating exploration of what it means to use “proper” English.  For instance, in the South it would be “proper” to tell someone that you “might could” pick them up from the airport, while the phrase “could might” would be rejected as inappropriate.  Why?  Because that is the way we say it.  Understanding these differences and adapting to your audience can be the key to effective communication.

From an insurance coverage perspective, we must continually remind ourselves that our puzzle pieces may not convey the meanings that we ascribe to them.  If we forget that words and phrases can mean different things to different people, we run the risk of walking into surprise outcomes.  One such surprise outcome that turns on the interpretation of a phrase will be addressed in an upcoming blog post.  In the interim, to the extent that you are interested in “micro-language,”  Ms. McColloch’s article can be found at: http://www.slate.com/blogs/lexicon_valley/2014/05/30/arguing_over_language
_everyone_has_an_idiolect_standard_english_prescriptivism.html

Statutes Affecting Indemnification Agreements in Construction Contracts

Posted on: November 6th, 2012

By: Kamy Molavi

It is quite common for parties involved in construction projects to include indemnity provisions within their construction contracts. In recent years, a majority of states have enacted anti-indemnity statutes that restrict, modify, or invalidate indemnification agreements in construction contracts. With respect to the degree of fault against which indemnity may be barred, two types of anti-indemnity statutes have emerged across the nation. We refer to them as “sole negligence” statutes and “any negligence” statues.

Nearly half of the state anti-indemnity laws void provisions that attempt to require the indemnitor to indemnify the indemnitee for the indemnitee’s sole negligence or willful misconduct. Indemnity in “sole negligence” states is allowed when the indemnitor and indemnitee are each partially at fault, or a portion of fault can be attributed to a third person. Stated another way, under these statutes an indemnitor may have to pay for the injury even if the indemnitee is 99 percent responsible for the injury. Further, in most states that only invalidate “sole negligence” provisions in indemnity contracts, workers compensation and insurance agreements are not affected by the “sole negligence” indemnity prohibition in the statute. However, several state statutes are silent on these issues. Examples of typical “sole negligence” anti-indemnity statutes are those enacted in Alaska and Georgia.

Several states have enacted versions of a different variety of anti-indemnity statute, referred to as “any negligence” states. This type of anti-indemnity statute voids contract provisions that require indemnification for losses or damages arising out of the indemnitee’s negligence, whether sole or partial. Thus, this type of anti-indemnity statute would necessarily include “sole negligence” prohibitions.  In states that have “any negligence” anti-indemnity statutes, the indemnitee is more restricted from shifting the risk onto a non-negligent party than in “sole negligence” states.

Recent case law addressing anti-indemnity laws has highlighted some of the fine points in the statutes and public policies of the states. One current issue is whether the contract qualifies as a “construction contract” and thus is subject to the state’s anti-indemnity statute.  All of the states that have analyzed this issue recently have decided that the term “construction contract” in the anti-indemnity statutes should be interpreted broadly. Georgia courts, for example, have interpreted the anti-indemnity statute broadly to apply to assignment agreement transferring the maintenance and repair of a residential subdivision to the homeowners association. Likewise, New Mexico has interpreted the applicability of its anti-indemnity statute to encompass maintenance activities in improving a property and agreements for rental equipment to be used in construction activities.

Another recent trend involves the interplay between indemnity and insurance, and specifically those statutes which contain an “insurance savings” clause. These situations arise in states where the anti-indemnity statute expressly prohibits contractual provisions that require the indemnitor to indemnify the indemnitee for the indemnitee’s negligence, and also expressly state that the code section does not affect the validity of an insurance contract and/or any other agreement issued by an insurer. An example of an insurance savings clause is in the Alaska statute that states it does not affect the validity of insurance policies. The interplay between these two statutory provisions has not uniformly interpreted among the various jurisdictions. As one example in a coverage dispute, the Delaware Supreme Court found that despite the public policy against indemnification for someone else’s negligence, whether the indemnification is direct or indirect, the “insurance savings provision” is enforceable. The Delaware Supreme Court stated that insurance companies are sophisticated and should not be able to use the anti-indemnity statute as a shield to decline coverage after it is purchased.

Some states are statutorily silent with respect to the validity of indemnity agreements in construction contracts, but their courts recently have addressed the issue. For example, the Nevada Supreme Court recently found that a party can be contractually required to indemnify another for the indemnitee’s negligence, but only if the contract for indemnity contains “an express or explicit reference to the indemnitee’s own negligence.” Thus, a general statement requiring the indemnitor to indemnify the indemnitee for “any and all claims” is not sufficient in Nevada.

In summary, if a loss arises and any applicable contract contains an indemnification clause, it is imperative for construction contractors and designers, as well as their claims adjusters and attorneys, to carefully review governing statutes and court opinions in order to determine whether the indemnification clause is enforceable, and if so, to establish the types of claims and damages to which the clause may apply.

This article is excerpted from materials for a Defense Research Institute seminar presented in Phoenix, AZ, in September of 2012. For a copy of the complete article, including a chart of various statutes, click here.

D&O Insurance Policies Now Tailored to Health Care Organizations

Posted on: October 12th, 2012

By: Kelly Morrison

The new wave of insurance policies explicitly addresses antitrust and HIPAA concerns unique to the medical industry.

Please visit the following link for more information: D&O Insurance for Healthcare Organizations: Our Prescription for Better Coverage.