From automated estimating to mobile technologies, on-demand tools and networked solutions, technology advancements introduced during Crawford’s 80-year history are improving claimants’ experience. In this Business Insurance Risk Perspective, Crawford leaders highlight some of the biggest changes in claims handling over the past eight decades.
Kristen Peed, corporate director, risk management and insurance at CBIZ Inc. discusses D&O renewal strategies, increased disclosure requirements expected from the Biden administration and how virtual meetings can actually lead to deeper business relationships.
The U.S. Supreme Court’s somewhat surprising ruling barring workplace discrimination based on sexual orientation or gender identity finally gives the country a uniform federal law, but employers should brace themselves for additional claims in areas of remaining ambiguity, including medical coverage and the ruling’s applicability to religious institutions, experts say.
In its 6-3 ruling last week, the Supreme Court held in Bostock v. Clayton County Georgia that under Title VII of the Civil Rights Act of 1964 an employer cannot fire someone “simply for being homosexual or transgender.”
“Those who adopted the Civil Rights Act might not have anticipated their work would lead to this particular result,” said the ruling by Associate Justice Neil Gorsuch. “But the limits of the drafters’ imagination supply no reason to ignore the law’s demands.”
Some observers had not expected the court to rule in the plaintiffs’ favor. Others had expected a favorable ruling but were surprised that two conservative judges, Justice Gorsuch and Chief Justice John Roberts, ruled in the plaintiffs’ favor.
“It’s a huge win for the LGBTQ community, especially for employees who were working in jurisdictions that had no state or local law that protects LGBTQ status in the workplace,” said Vincent M. Rizzo, an associate with Hinshaw & Culbertson LLP in Chicago, who focuses on labor and employment, constitutional violations and government.
“The Supreme Court is sending a message that employers need to recognize LGBTQ rights,” he said.
“The ruling is the beginning of a seismic shift” in the LGBT legal framework, said Moiré Morón, Atlanta-based assistant vice president and claims leader with QBE North America.
The ruling covered three cases:
- In the Bostock case, the 11th U.S. Circuit Court of Appeals in Atlanta upheld a lower court decision and ruled against Gerald Lynn Bostock, a gay man who contended he was fired as a child welfare services coordinator for the Clayton County, Georgia, juvenile court system because of its systemic sexual orientation discrimination.
- In R.G. & G. R. Harris Funeral Homes Inc, v. Equal Employment Opportunity Commission, the 6th U.S. Circuit in Cincinnati ruled in favor of Aimee Stephens, a transgender worker who was fired when she told her funeral home employer she was undergoing a gender transition from male to female.
- In Melissa Zarda et al. v. Altitude Express, the 2nd Circuit in New York decided in favor of Donald Zarda, a gay man who had sued his former employer alleging he was fired from his job as a skydiving instructor because of his sexual orientation.
Mr. Zarda and Ms. Stephens died before the high court reached its ruling.
Experts say that because of policies already voluntarily introduced by large employers, in particular, as well as federal and state court rulings and local ordinances, safeguards that protect most LGBTQ Americans are already in place.
“Major employers in the country, either on their own to attract talent or because of state or local laws, already are in compliance with this,” said Jay A. Zweig, a partner with Bryan Cave Leighton Paisner LLP in Phoenix, who represents employers.
Observers say that rather than breaking entirely new ground, in some respects the ruling is an expansion of previously issued Supreme Court rulings, including its 1998 decision in Oncale v. Sundowner Offshore Services Inc. et al., in which it held that sexual harassment discrimination charges can be made when the plaintiff and defendant are of the same sex.
Last week’s ruling establishes welcome uniformity in federal law, observers say. Many states and localities have anti-discrimination provisions, but “there was a question at least on the federal level that has now been resolved,” said attorney David L. Barron, a member of Cozen O’Connor P.C. in Houston.
“It’s not going to affect your everyday employee decisions,” but “adverse employment tactics that affect work conditions or work pay,” such as hiring decisions, terminations, promotions and job placements, Mr. Rizzo said.
“Now that we have this ruling, perhaps individuals who identify as LGBTQ will feel more empowered to file complaints and bring suits they were hesitant to do before” for harassment, retaliation and disability discrimination as it relates to transgender individuals, according to Ms. Morón, who said she is a member of the LGBTQ community. “We can see potentially a huge impact on some of the claims that employers face or will be facing.”
More claims can be expected, observers say.
“You’re going to see more claims based on either perceived, disparate treatment of LGBTQ, or implicit bias types of claims, where a person says, ‘Well, you didn’t put me in this position, or I didn’t get this promotion, or this adverse employment even happened because of my sexual orientation,” Mr. Zweig said.
“You’re going to see a lot of litigation of that under Title VII,” and there will be fact-intensive inquiries about the shifting burdens of proof under Title VII, he said.
“There will be some impact in those geographic areas of the country that were covered by circuits that previously interpreted the statute to not cover gender identity or sexual discrimination,” said Michael W. Johnston, a partner with King & Spalding LLP in Atlanta, who focuses on employment litigation and employment-related internal investigations.
“We’ll see filings for sexual orientation and gender identity claims with the EEOC, certainly, now that there is clearly protection,” although only about 2% of employment-related claims involve such characteristics, said D. Ryan Derry, a partner in Paul Hastings LLP’s employment law department in San Francisco.
“The ruling’s pertinence to religious organizations is “going to be a huge area of debate,” Mr. Barron said.
In its 2012 ruling in Hosanna-Tabor Evangelical Lutheran Church and School vs. Equal Employment Opportunity Commission et al., the Supreme Court held a religious school can claim a “ministerial exception” to a discrimination charge under the Americans with Disabilities Act for a teacher who also taught secular subjects, but the exception bars only employment discrimination lawsuits.
Experts point also to the U.S. Supreme Court’s 2014 ruling in Burwell vs. Hobby Lobby Stores Inc., in which it ruled that requiring closely held corporations to pay for insurance coverage for contraception under the Affordable Care Act violated the Religious Freedom Restoration Act.
“We likely will see some defendants trying to rely more on the Religious Freedom Restoration Act,” said J. Randall Coffey, a partner with Fisher & Phillips LLP in Kansas City, Missouri, who represents management in employment and labor matters. “I think there’s a fair amount of respect for people’s sincerely held religious beliefs.”
However, David Ritter, a partner with Barnes & Thornburgh LLP in Chicago, who represents management in labor and employment issues, said he does not anticipate a flood of claims in this area. “Religious institutions have been litigating issues regarding Title VII since its inception,” he said.
Experts suggest employers check the language of their employment policies to be sure they conform with the ruling. Employers “should be looking at this decision and taking note of how broad it is, and then making sure that they update their policies and train all employees consistently with this, and then follow good practices and make sure when they do something adverse with an employee (they) still document a good business reason for their actions,” Mr. Zweig said.
Employers should also examine their bathroom policies, which could be affected by the ruling, Mr. Rizzo said.
The ruling did not specifically address employee benefit plans, but employers should look at their plans’ eligibility for same-sex spouses to see whether coverage is excluded, said Michael Garrett, a principal with Mercer Inc.’s total health management specialty practice in Seattle.
Mr. Garrett also suggested employers see if their benefit plans provide coverage for gender dysphoria and gender affirmation or treatment. There are also issues related to mental health parity, he said.
Another issue is whether medical plans provide family planning coverage for fertility, adoption and surrogacy for same-sex couples, Mr. Garrett said. Employers should check as well to see if there is disability coverage for gender affirmation surgeries.
Employee training is also important, experts say. “Think about how to put in place training to create a workplace that is inclusive, and make sure that all employees feel included within the workplace,” Mr. Derry said.
Observers say they do not expect the ruling to materially impact employment practices liability insurance rates. The ruling is consistent with the position the EEOC has been taking and is already viewed by employers, to an extent, as the “cost of doing business,” said Samuel Fenwick-Schwartz, a partner with Seyfarth Shaw LLP in Chicago, who defends complex class actions.
Higher EPLI rates are possible, but not in places such as New York State and New York City where these individuals were already protected, said Regina E. Faul, New York-based partner who chairs Philip Nizer LLP’s employment & labor practice.
By Gavin Scouter
A coronavirus business interruption suit filed against Berkshire Hathaway Inc. alleges that virus exclusions that have been used by insurers since 2006 should be ruled invalid because the policy wordings organizations that devised them made misrepresentations to regulators.
In the proposed class action 1 S.A.N.T. Inc. d/b/a Town & Country and d/b/a Gatherings Banquet & Event Center v. Berkshire Hathaway Inc., a New Castle, Pennsylvania
, restaurant and tavern argues that Berkshire Hathaway wrongly denied its claim for business interruption coverage for income lost during the COVID-19 lockdown.
Like many similar suits filed by policyholders against insurers nationwide, the 1 S.A.N.T. suit, which was filed in federal court in Pittsburgh on June 11, alleges that the coronavirus pandemic caused direct physical damage to the plaintiff’s property, which it argues triggers business interruption coverage under its commercial insurance policy.
In addition, the suit argues that the virus exclusion in the policy does not apply because the groups that drew up the wordings 14 years ago — Insurance Services Office Inc. and the American Association of Insurance Services — told regulators that existing property polices did not cover “disease-causing agents” and the exclusions were intended to “clarify” coverage.
However, courts had previously ruled that property policies covered claims involving disease-causing agents, court papers say. The suit does not cite specific past rulings on the issue.
“The foregoing assertions by the insurance industry (including Defendant), made to obtain regulatory approval of the Virus Exclusion, were in fact misrepresentations and for this reason, among other public policy concerns, insurers should now be estopped from enforcing the Virus Exclusion to avoid coverage of claims related to the COVID-19 pandemic,” court papers say.
Berkshire Hathaway, ISO and AAIS did not immediately respond to requests for comment.
By Judy Greenwald
A putative class-action directors and officers liability lawsuit filed in federal district court charges that a biopharmaceutical company falsely claimed a 100% accurate COVID-19 test while company officials made millions dumping their stock.
Directors and officers of Salt Lake City, Utah-based Co-Diagnostics Inc. “including Ph.D.-level scientists who should know better – made continual, knowing and willful misstatements about their main product, a Covid-19 diagnostic test,” to pump up their stocks’ prices while its officers and directors “exercised low-priced options and dump their stock into the market,” said the complaint in Gelt Trading Ltd., a Cayman Islands limited company, v. Co-Diagnostic et al., which was filed in U.S. District Court in Salt Lake City on Monday. The lawsuit was first reported in the D&O Diary blog.
The complaint says Co-Diagnostics, which first received regulatory clearance to sell its tests in Europe in February, and its company officials and directors “made unequivocal statements” its tests were 100% accurate, and its stock price rose to a high of $29.72 a share.
Before it was set to announce its first-quarter earnings, however, news outlets reported the company was reticent to participate in U.S.-based testing to verify its accuracy claims, and the stock began to decline in price, to where it is now selling between $15 and $16 a share.
“During this time, and with a cloud of doubt hanging over the company’s claims of accuracy, Co-Diagnostics’ directors and officers have been rapidly exercising stock options for pennies per share and immediately selling their shares into the market reaping millions of dollars from the fraud-inflated price of the stock,” said the complaint, which charges the company with securities law violations.
The company did not respond to a request for comment.
Comparable litigation has been filed against companies including Plymouth Meeting, Pennsylvania-based Inovio Pharmaceuticals Inc. and San Diego-based Sorrento Therapeutics Inc. and their directors and officers.
By Gavin Souter
Higginbotham Insurance Group Inc. has acquired Ascend Insurance Brokerage, a Dallas-based firm specializing in placing insurance for the entertainment industry.
Terms of the deal were not disclosed.
Ascend CEO Paul Bassman will become a managing director of Higginbotham and the 13-person unit will operate as Ascend, a Higginbotham Company, Fort Worth-based Higginbotham said in a statement Wednesday.
By Judy Greenwald
A Delaware judge, ruling for two different state courts, is permitting some charges filed by the previous owners of a Virginia brokerage acquired by AssuredPartners Inc. to continue, while dismissing others, in mixed rulings.
Separate rulings were issued Friday by Delaware Superior Court Judge Abigail M. LeGrow on behalf of the Delaware Chancery Court and Delaware Superior Court, an intermediate appeals court, in litigation over the December 2014 acquisition of Haymarket, Virginia-based Sheehan Insurance Services Inc. to Lake Mary, Florida-based AssuredPartners, according to the two rulings.
The Chancery Court ruling is William Patrick Sheehan and Mark Joseph Sheehan v. AssuredPartners Inc., et al. while the Superior Court ruling is AssuredPartners Of Virginia LLC v. William Patrick Sheehan et al.
The Chancery Court opinion states the Chancery Court litigation was filed on Oct. 4, 2019, and the Superior Court litigation on Oct. 15, 2019. Judge LeGrow was designated to decide the Chancery Court action “so that one judicial officer could resolve the parties’ overlapping and related disputes,” according to her Chancery Court opinion.
The Chancery Court complaint includes several claims for breach of contract, with defendants contending the complaint fails to state any claim against them.
AssuredPartners charges breach of contract in the Superior Court complaint, and the charges are denied by the Sheehans.
The Chancery Court ruling states that in connection with the sale of their insurance agency to AssuredPartners of Virginia LLC and AssuredPartners Inc., the Sheehans signed employment agreements with AP Virginia, under which Pat Sheehan accepted the position of president of AssuredPartners’ Haymarket operations while Mark Sheehan signed substantially the same agreement and accepted an insurance producer position.
The transaction also involved an earn-out agreement, a limited partnership agreement and an equity incentive plan. Management employees were also offered the opportunity to invest in AssuredPartners by becoming limited partners of its ultimate parent company. This offer included the right to purchase Class A-2 interests and eligibility to be awarded Class B Profits Interests in the parent company, according to the ruling.
On Feb. 12, 2019, the buyers terminated the Sheehan’s employment classifying it as “for cause.” It also informed the Sheehans it was repurchasing their class A-2 interests for cost and canceling their Class B Profits Interests.
On Feb. 20, 2019, GTCR (AP) Holding, a Chicago-based private equity firm, acquired Assured Partners’ parent company and the surviving entity became a GTCR entity.
The Sheehans’ subsequent lawsuit alleged noncompliance with the earn-out agreement, employment agreement, limited partnership agreement and equity incentive plan.
The Chancery Court ruling states the Sheehan’s claims for breach of contract, breach of the implied covenant of good faith and fair dealing and declaratory judgment “survive under minimal pleading standard applicable to a motion to dismiss.”
AssuredPartners charges the Sheehans in the Superior Court litigation with a breach of the asset purchase agent’s representations and warranties, and that the sellers “fraudulently concealed material facts with the goal of making Sheehan Insurance Inc. look more attractive than it was, resulting in an inflated purchase price” for its assets. The Sheehans moved to dismiss the case.
“I conclude the action cannot be dismissed as untimely at this stage of the litigation, but I dismiss the sellers’ fraudulent inducement and civil conspiracy claims for failure to state a claim,” says the ruling. Remaining counts in the case include those for breach of contract and, breach of the implied covenant.
Assured Partners’ attorney had no comment while the Sheehan’s attorney did not respond to a request for comment.
(Reuters) — Four Republican U.S. senators on Tuesday urged the Federal Communications Commission to review whether to revise liability protections for internet companies after President Donald Trump urged action.
President Trump said last month he wants to “remove or change” a provision of a law that shields social media companies from liability for content posted by their users and directed a U.S. Commerce Department agency to petition the FCC to take action within 60 days.
Senators Marco Rubio, Kelly Loeffler, Kevin Cramer and Josh Hawley asked the FCC to review Section 230 of the Communications Decency Act and “clearly define the criteria for which companies can receive protections under the statute.”
“Social media companies have become involved in a range of editorial and promotional activity; like publishers, they monetize, edit, and otherwise editorialize user content. It is time to take a fresh look at Section 230 and to interpret the vague standard of ‘good faith’ with specific guidelines and direction,” the senators wrote.
U.S. Attorney General William Barr, in an interview aired on Fox News Channel on Tuesday, echoed the senators’ views. “These entities are now engaged in censorship,” he said.
“We are looking, as many others are, at changing Section 230,” Barr said, adding that the change would require action by the U.S. Congress.
White House spokesman Judd Deere noted President Trump’s executive order formally requesting the FCC take a second look at Section 230.
President Trump’s order seeks to curtail their legal protections after Twitter Inc. added a notice that one of his tweets violated its rules for “glorifying violence,” shortly after it slapped a fact-check label on another of his tweets opposing voting by mail. It was the first time Twitter had challenged his posts.
Last week, an advocacy group backed by the tech industry sued, asking a judge to block the executive order.
FCC Chairman Ajit Pai, who in 2018 said he did not see a role for the agency to regulate websites like Facebook Inc., Alphabet Inc.’s Google LLC and Twitter, declined to comment on potential actions in response to President Trump’s executive order. He told reporters on Tuesday it would not be appropriate to “prejudge a petition that I haven’t seen.”
FCC Commissioner Mike O’Rielly said on Tuesday the order poses a lot “of very complex issues.”
Mr. O’Rielly tweeted earlier “as a conservative, I’m troubled voices are stifled by liberal tech leaders. At same time, I’m extremely dedicated to the First Amendment which governs much here.”
(Reuters) — Radio-frequency chipmaker MaxLinear Inc. said on Tuesday it was hit by a cyberattack, with a hacker releasing some proprietary information about the company online.
The “Maze” ransomware attack affected some operational systems, the company said in a filing.
Ransomware is a type of malicious program used by hackers to take control of files in an infected system and then demand hefty payments to recover them.
According to cybersecurity firm McAfee, hackers who deploy Maze threaten to release information on the internet if the targeted companies fail to pay.
MaxLinear said on Tuesday it was working with a third party for advice on the content of information posted and that the chipmaker was also able to reestablish some affected systems and equipment.
The company does not expect the incident to adversely impact its operating expenses.
(Reuters) — Six former eBay Inc. employees have been criminally charged with cyberstalking a Massachusetts couple who published an online newsletter viewed as critical of the e-commerce company, federal prosecutors in Boston said on Monday.
U.S. Attorney Andrew Lelling said the defendants engaged in a “determined, systematic effort” to emotionally “terrorize” the couple with anonymous email threats, and deliveries such as live cockroaches, a bloody Halloween pig mask, a funeral wreath, and a book on surviving the loss of a spouse.
The defendants include eBay’s former senior director of safety and security, James Baugh, 45, of San Jose, California, and former director of global resiliency David Harville, 48, of New York.
Prosecutors charged all six defendants with conspiring to commit cyberstalking and tamper with witnesses.
EBay terminated the defendants’ employment last September, cooperated with prosecutors, and apologized to the couple.
Lawyers for Mr. Baugh and Mr. Harville did not immediately respond to requests for comment. The other defendants, including three former managers, live near eBay’s San Jose headquarters.
The alleged victims lived in Natick, Massachusetts, and were the editor and publisher of an online newsletter covering e-commerce companies such as eBay.
Prosecutors said that in one instance, the husband was told by email last Aug. 10 to expect the delivery of a pig fetus, and that after receiving the pig mask, his wife got a follow-up email asking: “DO I HAVE UR ATTENTION NOW????”
At a news conference, Mr. Lelling called the alleged harassment an attempt from “pretty high up the chain” to “weaponize the internet” to protect eBay’s brand.
“This case struck us as something unique,” he said.
EBay said its own probe found that while former Chief Executive Devin Wenig, who stepped down last September, had made “inappropriate” communications, there was no evidence he had advance knowledge of or authorized actions against the couple.
Efforts to reach Mr. Wenig for comment were unsuccessful. He told the Financial Times he had known nothing about the alleged harassment.