Insurance Law has three areas of focus: insurance coverage, insurance defense litigation, and insurance compliance. Insurance coverage actions generally involve an insurer and the insured. The insured is seeking to recover under a policy of insurance, and the central legal question is whether the insured’s policy covers the loss or liability. Insurance coverage actions can involve complex issues, including disputes between insurers related to matters such as primary/excess coverage or reinsurance. Insurance coverage cases tend to focus on the language of the policy and the case law analyzing the policy language. In the aftermath of Hurricane Katrina, flood exclusions and related provisions in homeowners and commercial policies are being challenged vigorously in the courts. Thousands of claims remain to be tried in individual and class action suits. Federal as well as state courts, chiefly in Mississippi and Louisiana, have and are issuing rulings. Tens of billions of dollars are at stake in these direct challenges to the flood—or water damage—exclusions in Katrina-related litigation.

 

Insurance compliance involves the 50-state regulation of the business of insurance, from rates to advertising/solicitation to licensing of adjusters. Insurance companies must get into compliance and stay in compliance in order to avoid regulator investigations and ultimately, penalties for non-compliance. Insurance compliance is primarily handled by compliance staff within insurance companies, but often companies have outside counsel handle responses to investigations by state regulators. Insurers use actuarial models based on past events to develop products, decide where to sell them, at what price, assess risk, lobby for regulatory change, etc. Climate change, also known as “global warming,” is forcing a paradigm shift in this business model. Both the insurance industry and federal and state governments are attempting to address this crisis.

 

Insurance defense refers to situations where an insurer hires counsel to defend its insured against an action brought by a third party—typically an action alleging that the insured has caused the third party to suffer bodily injury or property damage. The parties to the action are typically the insured and the third-party claimant. The legal issues revolve around whether the insured defendant is liable to a third party, and if so, for how much. Insurance defense cases tend to focus on the facts of a particular incident or occurrence. In insurance defense litigation, in-house counsel will create a set of guidelines for outside counsel to follow as a means of managing the expenditures incurred during litigation. However, given the tripartite relationship unique to insurance litigation, litigation guidelines continue to create much debate among insurers and defense law firms.

 

Insurance litigation covers such areas as construction defects, reinsurance, catastrophic loss, bad faith, disability, insurance fraud, and more. Insurance-related assignments for new associates include locating and adapting standardized policy language, reviewing documents, researching and analyzing cases interpreting policy language, and analyzing state regulations governing the business of insurance. In an insurance defense firm, a new attorney would participate in litigation by draft pleadings, motions, and written discovery.