INSURING YOUR PRESENT AND FUTURE

PACDC WORKSHOP – February 24, 2011Jay Barry Harris, Esquire

Fineman Krekstein & HarrisJames R. Domenick

Domenick & Associates

OVERVIEW

CASE STUDY Lessons learned How your broker and lawyer can assist you

GENERAL ISSUES Replacement Costs Material change of risk Reporting a loss

CHECKLISTS

LESSON LEARNED

Insufficient coverage Insufficient security on the property Insufficient safety measures taken Insufficient evaluation of the risk

BROKER’S ASSISTANCE

Evaluating risk Recommending insurance that address

the risk Helping to determine the policy limits –

Concept of Probable Maximum Loss as it pertains to third party liability

LAWYER’S ASSISTANCE

Initiate settlement discussions Evaluate Bad Faith exposure

CASE STUDY Hankinson v. American Western Home

FACTS Residential property located at 70 Cabin

Road, Tunkhannock, PA Owner lived in Alabama Unoccupied and for Sale Insured for three months for $125,000 as a

vacant property and $1,000,000 for liability Owner stated that regular checks were

being made to protect the vacant building

CASE STUDY Hankinson v. American Western Home

FACTS Policy contained vacancy and secured

premises warranties Former partner rented the property to

tenants without owner’s consent or knowledge

Arson fire Tenant injured and the property destroyed Lawsuits by owner and tenant

LESSON LEARNED

Property was inadequately secured Representation in the application process

is critical Knowledge and complicity of owner were

irrelevant

BROKER’S ASSISTANCE

Explain coverages Explain exclusions and warranties

LAWYER’S ASSISTANCE

Judge’s role in interpreting the policy Exclusions v. Warranties

GENERAL ISSUES

Replacement Cost v. Actual Cash Value Legal Duties of a landowner

Duty of care Responsibility of the municipality

Material Change of Risk Impact on coverage Insured’s duty to report material changes

GENERAL ISSUES

Reporting a Loss Notice of loss Sworn statement under oath Duty to cooperate

Shielding your assets