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Insurance & Reinsurance Consulting & Outsourcing Services

All Should Use Greater Care Handling Underwriting Information

By Akos Swierkiewicz

One of the tenets of insurance law is that parties to an insurance policy are expected to deal with each other in utmost good faith. Applicants for insurance or their brokers must disclose all relevant underwriting information fully and accurately to prospective insurers. If the application contains any misrepresentation or omits information that could affect the underwriting decision of the insurer, the standard of utmost good faith is not met and the insurer may deny coverage for claims or rescind the policy.

Allegations about misrepresentation or omission usually surface in the course claim investigations by insurers. In many instances the ensuing litigation may result in denial of the claim or rescission of the policy. Even if misrepresentation or omission is not proven, litigation inevitably causes significant delays in claims adjustment and direct and indirect expenses to the parties

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Insurers: To Rescind or Not to Rescind

By Akos Swierkiewicz

 

Rescission of an insurance policy is serious business. Such action could result in serious financial difficulties to insureds, especially if it occurs after a major loss. Furthermore, costly and protracted litigation almost inevitably follows to contest the rescission.

 

Fortunately, insureds and their brokers can minimize the potential for rescission by simply exercising greater care to ascertain the accuracy of underwriting information, and by providing all material information to insurers. Also, rescission decisions are made by insurers only if they are convinced that they have adequate justification for them.

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The World Trade Center Property Insurance Trial: Lessons Learned?

By Akos Swierkiewicz

 

 

Had the tragic events on 9/11/01 not occurred, we would have never learned about negligence, mistakes, errors and omissions, inconsistencies, and confusion that plagued the placement and negotiation of the property insurance program for the WTC and brought to light during the WTC trial.

The primary parties involved in the litigation were 13 WTC insurers, including Lloyd’s syndicates, counted as one, the broker Willis and their client, Silverstein Properties, the leaseholder. The insurers contended that they were bound by the WilProp 2000 form, which defines “occurrence” and would limit the WTC claim to $3.5 billion, while Silverstein’s position was that the Travelers’ form applied, which does not define occurrence and would respond to each of the WTC towers separately, resulting in a $7.0 billion claim.

 

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