Every Dawg Has Its Day – A Report From Philly I-Day 2016

cyber securityGuest Blogger: Emily Breslin Markos, Weisbrod Matteis & Copley PLLC

On Thursday, April 28th, I had the pleasure of attending Philly I-Day, an annual event where insurance professionals gather to network, share ideas and get informed about industry trends.  The attendees had the opportunity to hear from Tom Finan, who previously served as the Senior Cybersecurity Strategist and Counsel with the Department of Homeland Security.  While in this role, he established and led the agency’s Cyber Incident Data and Analysis Working Group (CIDAWG), which I previously blogged about.  I appreciated hearing him speak about the important work that the CIDAWG has done to secure businesses against cyber-attacks.  Mr. Finan shared that the National Protection and Programs Directorate (NPPD) recently held a workshop to focus on the execution of the repository for reporting cyber incidents, as described in my previous blog post.

I was surprised to learn that Mr. Finan invented the acronym CIDAWG for the working group, and intentionally made it, well, awesome.  He boasted that it is the best acronym in the federal government to date, and I tend to agree, at least until we all start calling the President “P-Dawg.”   To learn more about the CIDAWG’s continuing cyber-security efforts, please visit:  www.dhs.gov/cybersecurity-insurance.

While at the event, I also had the opportunity to attend a Presentation given by our own Lee Epstein, with Kevin M. McPoyle of KMRD Partners, on effective communications between brokers and policyholders.  In our work representing policyholders, we have seen our clients rely on brokers as an incredible source of expertise, guidance, and comfort when it comes to our client’s coverage needs.  Unfortunately, we have also had the firsthand experience of having communications between the policyholder and broker unearthed in coverage litigation, and sometimes used against the policyholder.

For example, when a broker gives the unequivocal opinion that a certain claim is not covered, that can come back to haunt the policyholder.  The insurer may rely on that statement as evidence of no coverage, and a court may find the broker’s statement compelling.  In light of that, Lee and Kevin discussed how can brokers strike a balance between providing helpful and definitive advice to their clients, while aware that their statements can carry a great deal of weight if the claim is ever litigated.

Two main themes emerged from the discussion.  First, the broker’s role is to offer business advice, not legal advice, and couching communications in business terms can avoid many problems if the claim ever goes to litigation.  Second, when there is a question as to the scope of coverage, setting forth advice in terms of what the insurer’s position may be provides sound advice to the policyholder, but also protects the policyholder in the event of litigation.  It was an eye-opening Presentation, and fodder for continuing discussion.

To learn more, contact Emily Breslin Markos

Loose Lips Sink Ships: Policyholder Communications with Insurance Brokers May Not Be Privileged and Immune from Disclosure

Insurance brokers play a vital role in the insurance process. Beyond assisting in the placement of the insurance program, they are often the first to be consulted by the policyholder after a major loss or liability. In fact, brokers are often so involved in the claim process that policyholders may consider their communications with brokers to be privileged and immune from discovery by insurers after a claim dispute arises. Unfortunately, that is not always the case.

Generally, the attorney-client privilege protects confidential communications between attorneys and their clients with regard to the rendering of legal advice. Communications are protected when they are necessary for the effective communication between attorneys and their clients. Protection may not be available when the communication is extended to someone outside of the attorney-client relationship or when the communication involves business, as opposed to legal advice.Man afloat on desk in sea of currency

Courts throughout the country are split on whether broker communications are privileged. Those courts that uphold the privilege recognize that insurance brokers negotiate the coverage and, thereafter, serve as necessary advisors to policyholders. Other courts uphold the privilege when the communications with the broker are made for the purpose of facilitating legal advice. Conversely, some courts refuse to extend the privilege after concluding that insurance brokers are outside the scope of the attorney-client relationship or that the broker provided business, as opposed to legal, advice.

Accordingly, any communications with brokers should be undertaken with an understanding that they may not be protected from disclosure. And, in order to maximize whatever protection that may be available, any sensitive communications with insurance brokers should be made pursuant to a confidentiality agreement and clearly marked as “Privileged and Confidential.”

Questions? Contact  Lee Epstein at Weisbrod Matteis & Copley PLLC.