The negligent premises liability inspection: Potential liability for the insurer?
Features • September 25, 2006
People are always on the search for the "deep pocket" and insurers are very often the target of such searches. A common fixture of the underwriting process for many insurers is the inspection of ...
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Subject: Other underwriting exposures
Posted On: October 27, 2006, 11:15 am CDT
Posted By: Ted Bartenstein
Comment:
In a recent products liability case, the Plaintiff attorney was frustrated that all an insured did to evaluate the potential risk associated with a product was to rely on the insurance company advising that they did not see any need to increase the premium or otherwise limit coverage as a result of the product being sold.
It is interesting that as insureds try to save money, in effect they are outsourcing risk management decisions to their insurers. While the case in the article failed, I could see a similar claim being made against an insurer for issuing a policy on products the Plaintiff claims are clearly dangerous.
The problem is that the more the insurers do to effectively evaluate risk, the more they seem to be opening themselves up to these kinds of claims. Hopefully the Courts will continue to limit that exposure, but having to defend those claims is an unfortunate additional expense.
Subject: Other underwriting exposures
It is interesting that as insureds try to save money, in effect they are outsourcing risk management decisions to their insurers. While the case in the article failed, I could see a similar claim being made against an insurer for issuing a policy on products the Plaintiff claims are clearly dangerous.
The problem is that the more the insurers do to effectively evaluate risk, the more they seem to be opening themselves up to these kinds of claims. Hopefully the Courts will continue to limit that exposure, but having to defend those claims is an unfortunate additional expense.