Mark Pring and Claudia Gwinn examine the Third Parties (Rights against Insurers) Act 2010, focusing on 2025 decisions relating to notification of conditions precedent (Makin v QBE; Archer v R ’N’ F Catering) and disclosure requirements (AmTrust v Endurance). They highlight practical points regarding, in particular, ensuring compliance with policy terms and using “extended disclosure” applications to address “information asymmetry.”

In this episode focusing on data centers, real estate partner John Simonis and insurance recovery partner Chris Mosley join Paul Sovik-Siemens, senior VP and managing director for project risk at Lockton, to explore critical insurance considerations, challenges, and best practices for data center development and construction projects. The panel discusses the nuances of builder’s risk and liability insurance, the importance of wrap-up policies, and strategies for structuring insurance programs to protect large-scale data center investments.

Reed Smith insurance attorneys Amy Koss, Stephen Raptis and Anthony Crawford survey the unique risk landscape facing data center owners and operators. Because no off-the-shelf “data center policy” yet exists, the trio explores how traditional coverages – property, cyber, technology E&O, and general liability – can be layered to safeguard both the bricks-and-mortar infrastructure and the critical information coursing through it. If you build, host, or rely on data centers, this episode is your blueprint for intelligent risk transfer. This is latest episode in our Data Center series. ----more---- Transcript:  Hello: Hello and welcome to Insured Success, a podcast brought to you by Reed Smith's Insurance Recovery Lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policyholders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Amy: Welcome to Insured Success and our Data Center series. My name is Amy Koss. I'm an Insurance Recovery associate attorney in Reed Smith's Philadelphia office, and I'm joined today by Steve Raptis, an Insurance Recovery partner in our D.C. Office, and Anthony Crawford, an Insurance Recovery partner in our New York office. As part of the Insurance Recovery Group, we represent policyholders in complex insurance disputes and counsel corporate policyholders on coverage issues. In today's episode, we're going to discuss the unique risks that data center owners and operators should consider when purchasing their insurance coverage. Data centers have been popping up all over the place, and they're really being integrated into our way of life. For example, very recently, OpenAI launched its Stargate project, and as part of that project, OpenAI intends to invest over $500 billion in building and supporting AI infrastructure over the next four years. And these infrastructure efforts are only going to continue to increase as technological advancements like AI and the Internet of Things become enmeshed with the way that we live our lives and the way that we do business. And much like anything else, with big investment comes big risk. So we're going to talk today about what owners and operators of data centers should consider as they look to ensure their risks, especially those risks that are unique to data centers. Stephen, Anthony, how are we doing today?  Stephen: Hi, Amy. Doing well. Thank you.  Amy: Great. So as I mentioned, data centers carry a unique set of risks. What should data center owners look for when shopping for insurance and reviewing different policy options?  Stephen: It's a great question, Amy, and I know from personal experience where I live in northern Virginia, data centers are everywhere, and every large piece of unused property seems to be in the process of being transformed into a data center. So it is just including what we hear in newspaper reports and trade press about this being an expanding industry. There's no doubt about it. Everywhere you look, there are more and more data centers coming up and AI is only going to increase that demand over time. And we know that the insurance industry is usually pretty good about coming up with specialized products once an industry hits a certain critical mass, they will start to produce specialized insurance products for that industry. And one might think that the data center industry is large enough now that it would have its own specialized insurance products. But in fact, we have not seen that. And we've talked to a number of insurance brokers to see if they might be aware of specialized products that are out in the marketplace. And they told us that they're not, at least not yet. So where that leaves data center owners and operators is that they need to take traditional off-the-shelf, for the most part, insurance policies and make those fit into thei

While the devastating Los Angeles wildfires earlier this year were extinguished, the risks associated with those fires – and wildfires more broadly – continue to affect policyholders. In this episode, Nick Insua, Matt Weaver and Kya Coletta discuss important topics related to wildfires, including recent insurance updates, smoke damage remediation, the threat of mudslides, the California FAIR Plan and the process of rebuilding after a loss. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's Insurance Recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policyholders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Nick: Welcome everyone to the Reed Smith podcast Insured Success. My name is Nick Insua. I’m a partner in the New York and New Jersey offices of Reed Smith and I’m in our insurance recovery group. I primarily work on first party property and business interruption insurance claims although my practice is varied on liability coverage disputes as well. I'm joined for today's podcast by my partner, Matt Weaver. Matt is a partner in our Miami and Dallas offices, and a significant part of his practice involves dealing with the aftermath of natural disasters. And finally, we are joined by Kya Coletta. Kya is an associate in our Los Angeles office, and she primarily focuses her practice on representing corporate policyholders in insurance coverage disputes and does have a particular focus currently on losses relating to aviation clubs. And today we're going to be talking about some of the current legal and different coverage developments related to the terrible wildfires that struck the Los Angeles and greater Los Angeles area early in this year of 2025. We did want to acknowledge the devastating losses that many families and the communities there are facing due to these recent wildfires. Our hearts continue to go out to everyone affected. And we hope to provide some useful insights today and resources to assist those affected in recovering. Our firm, along with many, not only in the West Coast, but around the country, work very closely with an organization called United Policyholders. They're a nonprofit organization that provides invaluable information and support for policyholders navigating insurance claims and recovery efforts. Homeowners should visit their website for guidance on filing claims, negotiating with insurers, and accessing disaster recovery resources. United Policyholders is based in California and has a lot of experience dealing with natural disasters and their aftermath from an insurance perspective, and in particular on wildfire claims. Our podcast today is going to hit on a few key topics. The key areas of focus will be smoke damage remediation, mudslides, the fair plan, rebuilding after a loss, and some recent insurance policy updates. The reason why these topics matter is because there is and we've seen an increased risk of wildfires. Not only these in California, but others in California. We've now seen some subsequently in southwest of the United States. This is a risk that's growing in frequency and severity. Insurance policies, terms and conditions are evolving, and there's a lot of change in policy terms and how those might apply to losses. And we've also seen some recent court rulings from California, and there will be others, undoubtedly, that all policyholders and lawyers working with them should be aware of. So with that, we're going to step into some substantive segments of our podcast. Our first segment is going to be key initiatives by Insurance Commissioner Ricardo Lara since our last podcast. And the first topic in that segment is going to be provisional approval of State Farm's rate increase request. And I'm going to ask Kya if

In this podcast, Peter Hardy, Eleanor Ruiz and Claudia Gwinn provide an introduction to cryptocurrency insurance, including key issues such as crypto-related risk coverage (i.e., theft, hacking, fraud and operational mistakes), considerations in respect of valuation wording and notification requirements to the insurer in the event of loss. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policyholders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Claudia: Welcome back to Insured Success. My name is Claudia Gwinn and I'm a junior lawyer in Reed Smith's insurance recovery group and I'll be in conversation today with my colleagues in the London team, partner Peter Hardy and counsel Ellie Ruiz. Today we're going to be discussing the cryptocurrency insurance market and in particular the types of crypto policies available and the risks they seek to cover, insured considerations as to the policy wording and them respective disclosures. And finally, making a claim under a crypto policy. So to start off, what does the cryptocurrency insurance market look like currently? What kind of policies are available? And what are the risks currently attaching to cryptocurrency and digital assets? Ellie: Hi, Claudia. So when we're talking about cryptocurrency insurance, there's probably two broad categories. There's coverage for assets that's available to consumers, For example, your individual, your corporate investor, and then there's insurance for the key stakeholders within the crypto industry, and that would include crypto custodians or exchanges. There's then various types of assets that crypto insurance might cover. There's a type of custodial insurance that might protect against sort of general loss as a result of hacking, theft, loss of funds. There's also the option to look under crime insurance policies. That's more directly relating to theft, potentially crime-related events, individual insider involvement. And then you can also look for some types of specific policies targeting risks that are directly related to being in this cryptocurrency environment. For example, a specific type of policy that addresses theft of an element of the software or hacking in particular based on the, relevant industry rather than a broader concept of crime or of general custodial insurance. The risks that we're looking at, those risks that are inherent when you're holding crypto assets, some of them are very new. It's a relatively new area and they're quite specific risks to this area that have to be considered. Those might include that this is an area where there's a lack of regulatory oversight. There's definitely market volatility that everyone is aware of that really affects the value of the cryptocurrency that might be being held. And there are also a whole different host of security concerns around encryption, how assets are held, and particularly on cryptocurrency platforms, that makes these systems vulnerable to a different type of attack than you might think about assets held in a bank account, particularly the collapse of FTX in November 2022. That made, I think, crypto asset holders and the public generally more aware of those risks and that there's a real need to protect these digital assets in as many ways as possible. And one of those ways is to look at taking out insurance. And it'll come as little surprise, I think, that one area that we've seen particular activity is that these crypto exchanges are a tempting target for hackers. There's the high value nature of the assets that are involved. And as I mentioned before, new potentially untested security. There might be new vulnerabilities that haven't yet been pro

The 2025 Los Angeles wildfires have left many businesses and individuals in Southern California facing significant challenges. In part 2 of a podcast focused on insurance claims following a natural disaster, we hope to assist victims as they navigate the insurance claims process. In this podcast, John Ellison, Chris Kuleba, Max Louik and Esther Kim discuss claim submissions, the post-loss insurance policy conditions that policyholders need to comply with and the coverages that are available for losses resulting from a natural disaster under a first-party property policy. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policyholders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  John: Greetings and welcome back to the latest episode of Insured Success. Today's topic is part two of our podcast on dealing with natural disaster claims. We're focusing on three topics related to natural disaster claims for business owners and also individuals. Part one, we'll talk about claim submission. Part two will be the post-loss insurance policy conditions that policyholders need to comply with. And part three is the various coverages that are available for losses resulting from a natural disaster under a first-party property policy. My name is John Ellison. I'm a senior partner in Reed Smith's Insurance Recovery Group in both our Philadelphia and New York offices. And I am joined by my colleagues, Max Louik, a partner in our Pittsburgh office, Chris Kuleba, a partner in our Miami office, and Esther Kim, a senior associate in our Philadelphia office. Natural disasters are covered by first-party property policies, including wildfires, hurricanes, and windstorms. And this topic is particularly timely given the tragic events that have been ongoing in LA for the last several weeks. Moody's, among other estimators, have proposed that the insured losses from the 2025 LA wildfire claims will likely be in excess of $20 to $30 billion dollars. Other prognosticators have estimates that are even higher. An LA Times article earlier this week stated that the wildfires have damaged or destroyed about $350 million in public infrastructure. And as of another estimate earlier this week, over 16,000 structures have been destroyed in both the Palisades and Eaton fires. For individuals and businesses affected by these events, United Policyholders, a nonprofit organization based in San Francisco, has a page dedicated to the wildfires with information and resources on submitting insurance claims and disaster recovery that has a whole lot of useful information. And in addition to that, the California Department of Insurance, which has been particularly active in the post-wildfire time, has the latest announcements and updates regarding what the insurance department is doing on behalf of policyholders with respect to their insurance policies and claims resulting from the wildfires. So with that introduction, let's talk about what you take as your first steps in dealing with a natural disaster loss. And I'm going to pass it over to Esther to pick it up from here.  Esther: Thanks, John. So when your property has been damaged by a natural disaster, you should first review all of your insurance policies to determine which policy provides coverage for that specific property and cause of loss. Most individuals and businesses will generally have one policy that responds. For a business, the commercial property and business interruption policy will likely cover losses caused by natural disasters and lot fires. In California, after a property loss, an insurance company must provide free of charge a complete and current copy of an insurance policy wi

Cyberattacks, including hacks, ransomware and malware attacks, are on the rise. Nearly every industry has been or could be affected, including professional and financial services, manufacturing, distribution, health care, education, tech, retail, energy, government and non-profit. Experts believe this trend will only continue. But insurance may be able to help manage the growing risks, as Lisa Szymanski and Adrienne Kitchen discuss in this episode. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policyholders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Adrienne: Welcome back to Insured Success. I'm Adrienne Kitchen, and I'm joined by Lisa Szymanski. Cyberattacks, including ransomware, business email compromise attacks, third-party breaches, network intrusions, inadvertent disclosures, and malware attacks are on the rise. Nearly every industry has been or could be affected, from professional and financial services to manufacturing and distribution, healthcare to education, tech to government, and non-profits and retail to energy. And experts believe this trend will only continue.  Lisa: The cyber threat landscape is quickly evolving, creating new and unique risks. Data and privacy breaches are disruptive, expensive, and embarrassing, and many lead to litigation. Malicious attacks are on the rise. So it's a question of when, not if, a business will suffer a data breach.  Adrienne: That's right, Lisa. And most states, including D.C. And the U.S. minor outlying islands, have data breach notification statutes. A handful of states have statutes mandating methods by which businesses must secure data. The federal government also has enacted several statutes and regulations addressing data privacy and security in different realms, from health to finances and government to family.  Lisa: With respect to insurance, traditional insurance like commercial general liability policies typically exclude losses arising from a data breach. However, other policies like employment practices liability policies, directors and officers policies, errors and omissions, and even property policies may provide some cover. This is because security breaches may give rise to claims against management, commercial crime policies may cover certain direct losses, and computer fraud and property policies may provide cover for damage to types of electronic data.  Adrienne: An often overlooked, unpurchased, optional feature of some cyber policies is system failure insurance, which is usually triggered by an unplanned outage of a computer system resulting from operator error, erroneous updates of software, or a similar unintentionally damaging maintenance of computer systems. Another often overlooked aspect of cyber policy is customer attrition, which provides cover for lost profits due to a residual loss of customers following a service interruption.  Lisa: Data security and privacy liability policies may be placed as standalone policies, or coverage sections in package policies, or endorsements to traditional liability policies. All of this cover is relatively new, so the forms vary significantly and are always evolving. Data security and privacy liability insurance is negotiable, and policyholders should compare the policies and try to obtain bespoke coverage whenever possible. Generally speaking, data security and privacy liability policies may cover several risks, including, for example, misappropriation of private information, unintentional disclosure of private information leading to a risk of or actual identity theft, failure to protect confidential information from misappropriation or disclosure, failure to disclose or notify vi

Continuing our two-part series on Bermuda Form policies, John Ellison, Richard Lewis and Catherine Lewis return to discuss how policyholders can perfect their coverage and handle the dispute resolution process. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's Insurance Recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policyholders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  John: Greetings, everyone. Thanks for joining us again for another session of Insured Success. This is part two of our podcast on the Bermuda Form, and today we are focusing on perfecting the coverage available under the Bermuda Form coverage and how to deal with the dispute resolution process. We've already covered the history of the form and key policy terms and coverage issues in our part one podcast, but now we're on to how the policy actually works and how you can put it to use. Joined today by two Lewises, Richard in New York and Catherine in London. And without further ado, I'll turn it over to you, Rich.  Richard: Okay. We're going to talk a little bit about some of the issues that we've seen at the claim side from the manner in which the program is structured. As we covered, I think, in the first one, the limits of Bermuda Form policies are huge. A program can have hundreds of millions of dollars in limits. And so are the retentions. They can be, I think when the policies first came out, they were 25 to 50. And a lot of policy holders have up to a hundred million dollars in retentions. And what will often happen is a policy holder will buy different products, whether it be captive insurance or actual domestic GL insurance and put that in their retention. And this can lead to some issues. The first issue being, as we covered in the first podcast, that the trigger of the occurrence-first reported policies, the Bermuda Form policies, is notice of an occurrence or notice of an integrated occurrence during the annual period. The problem would be if the policyholder in the retention purchase GL insurance that's triggered on a different mechanism, either an occurrence policies or claims made policies. Occurrence policies are policies that are generally triggered by injury during the policy period. And the issue you can see that may occur, and we've seen it many, many times, is that, you know, the policyholder gives notice in say 2005 of an integrated occurrence or an occurrence under its Bermuda Form policies. And there have been problems with this, you know, say a product over a 10-year period with injuries triggering a 10-year period in the occurrence policies. And so what the Bermuda Form carrier will say is that I'm excess not only of the retention in my year 2005, but I'm also excess of all the other limits that were recoverable under the occurrence policies from years 1995 to 2005. So I'm excess of 10 retentions. There's language you can use in your occurrence first report or in your occurrence policies, either like a deeming clause or something that deems only one year to be triggered. Similar issues occur with claims made policies, although generally claims made policies have a batching mechanism where only one year is triggered. Unfortunately, if the first claim came in in say 2003 and you give notice of integrated occurrence in 2004, the same issue can occur. The Bermuda Form carrier will say that I'm excess of two retentions. The other big problem that we've seen a lot is where the underlying coverage has defense costs outside the limit. Obviously, in these mass tort cases that implicate Bermuda form coverage, the defense costs can be massive. And a lot of those defense costs are incurred before there's any settlements or judgments. And if for some reason, the coverage and

In 2024, the citizens of more than 60 countries have gone or will be going to the polls to exercise their electoral rights, leading some to dub this year the “super-cycle” election year. The political change that some of these elections will bring could also bring political risk, but political risk insurance can mitigate some of those risks. In this podcast, Laura-May Scott, Emily McMahan and Katherine Ellena discuss what this insurance is designed to cover, how it could be triggered during this year’s elections and some practical considerations for evaluating a company’s risk profile and insurance suites in respect of political risk. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's Insurance Recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policyholders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Emily: Hello, listeners, and welcome to the Insurance Success Podcast. My name is Emily McMahan, and I am an associate in the Global Commercial Disputes Group at Reed Smith in London.  Laura-May: And I'm Laura-May Scott, a partner in the Disputes Group at Reed Smith in London.  Katherine: And lastly, I'm Kat Ellena, an associate in the Insurance Recovery Group in Los Angeles. Today, we're going to talk about a key insurance in a business's armory, political risk insurance. We will also be considering this type of insurance in the context of elections. Emily: So this year, over 60 country citizens have gone to or are going to the polls to exercise their electoral rights, dubbing 2024 the super cycle election year. As we know, political change brings about uncertainty and therefore increased risk for organizations operating from or doing business in those affected countries. This is where political risk insurance can step in to mitigate some of these risks experienced by organizations that are associated with political change.  Laura-May: Exactly that. And for those experienced in insurance and risk management, political risk insurance isn't just a peripheral concern. It's a critical tool in strategic planning and operational continuity. This insurance serves as a crucial tool for mitigating uncertainties that arise from political shifts, which we often see are magnified during elections or political unrest.  Katherine: So with that backdrop in mind, in the next 10 minutes or so, we will explore three things. First, what political risk insurance is designed to cover. Second, how this coverage could be triggered in light of this year's super cycle of elections throughout the world. And lastly, some practical considerations for risk managers and company executives alike when evaluating their company's risk profiles and insurance programs in respect of political risk coverage.  Emily: Great. So let's start with setting out what exactly political risk insurance is. Political risk insurance is designed to cover a policyholder's financial losses and operational disruptions arising from political events, such as government changes, policy shifts, civil unrest, and geopolitical tensions.  Katherine: That's right, Emily. and political risk insurance specifically provides coverage for risks like expropriation, political violence, currency and convertibility, and government contract breaches. During election periods in particular, these risks can become pronounced, which requires a proactive approach to risk management.  Laura-May: Yes, and in an election context, the risk faced by companies is twofold. So we have immediate market reactions, where there's riots and civil unrest, which results in business interruption. And you also have long-term policy implications as a result of government policy changes, which can cause more permanent implications for businesses. So let's l

In this podcast, Bert Wells, Cristina Shea and Adrienne Kitchen of Reed Smith’s Insurance Recovery Group delve into the critical topic of insurance coverage for supply chains, highlighting the significant risks and disruptions that can impact global logistics. This episode explores how events like political instability, cyberattacks and natural disasters can disrupt supply chains, and highlights the essential role insurance plays in mitigating these risks. The team shares real-world examples of supply chain disruptions and the insurance lessons learned from these cases, emphasizing the importance of understanding risks and ensuring adequate coverage. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's Insurance Recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policyholders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Adrienne: Welcome to Insured Success. My name is Adrienne Kitchen. I am a senior associate in Reed Smith's Insurance Recovery Group. Joining me are Bert Wells, a partner from our New York office, and Cristina Shea, a partner in San Francisco. Today, we're talking coverage for supply chains. Supply chains are relationships between a seller or manufacturer of goods and the supplier of those goods or things like the materials incorporated into products, raw materials, component parts, things like that. Supply chains can be disrupted by numerous things, whether price changes, transportation or storage failures, labor shortages, political instability, man-made physical losses to plants like fires, storage facilities, stores or cyber attacks, all of which pose a significant risk to businesses. A disruption in any part of the chain can cause losses in other parts of the chain. Insurance has become central to managing risk in global supply chains and logistics, particularly as they grow increasingly complex and vulnerable to disruption. Some types of insurance that may help cover losses to supply chains are contingent business interruption, supply chain, and trade disruption or cyber insurance. Other coverage types may cover some potential gaps in these insurance types. Global supply chain risks also is a focus of national policy and security. Cristina, would you like to discuss some of those?  Cristina: Yeah, thank you, Adrienne. So focusing on the U.S. first, you know, going back about, I don't know, 12 years or so, the U.S. Department of Homeland Security really started to recognize and understand the importance of securing the global supply chain. And along with that was recognizing, you know, its vulnerabilities and how it was susceptible to external forces. So to ensure that the global supply chain continued to function smoothly, the Obama administration adopted a national strategy in 2012. And that was designed to bolster and support the efficiency, I guess, of the insecurity of the global supply chain and ensure that it was able to withstand evolving threats. And then, you know, during the pandemic, the strain on the global supply chain really, it was, you know, front and center. It was under a microscope. And following the pandemic, the Biden administration really greatly enhanced some of that implementation of that strategy. And they took that program and addressed some of the acute supply chain crisis that had arisen due to the pandemic. And in the context of that, the Biden administration created a council on supply chain resilience and it implemented the use of the Defense Production Act that allowed U.S. Manufacturers to start creating essential medicines in the U.S. in order to mitigate some of the drug shortages. And all along throughout both the Obama and the Biden administration, the real focus has been on implementing security measures

From “greenwashing” to “greenhushing,” from sustainability goals to boardroom debates, ESG exposures are fluid and formidable. Learn from Carolyn Rosenberg and Jennifer Smokelin how claims have morphed and how pro-active strategies, including insurance, can be implemented to lower the temperature. ----more---- Transcript:  Intro: Hello and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policyholders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist. Carolyn: Hi, everybody, and welcome back to Insured Success, where today our topic is It's Not Easy Being Green, ESG Claims and Potential Protections. I'm Carolyn Rosenberg. I'm a partner in the Chicago office of Reed Smith in our insurance recovery group, where I work with policyholders in connection with insurance review, as well as handling insurance coverage disputes and all kinds of risk management and corporate governance. My partner, Jennifer Smokelin, who is a partner in Pittsburgh, is steeped in energy and ESG and related issues and is one of our leaders in our ESG initiative. We're delighted that she is here today to help inform us and discuss these important issues. We've certainly talked about all the acronyms, ESG, DEI. Most people are familiar with greenwashing claims and, of course, the newest claim of green hushing. So, Jennifer, to try to hallucinate this a little bit further, when companies are talking about ESG and green hushing, what is the landscape? What is green hushing? Jennifer: Thanks, Carolyn. Companies are talking less these days about ESG in earning calls and marketing materials. But they are mentioning it nearly as frequently as ever in their financial reports and disclosures. The apparent disconnect here suggests that companies haven't fully shelved their sustainability-related goals. They're just talking about them less. There's a number of data points over the past year that indicate that investor interest in ESG has cooled down. Many companies in the last year have exited the Climate 100+, an initiative pushing companies to address environmental issues. However, many companies still recognize that investing in sustainability is important for long-term value creation. So they keep doing the initiatives related to sustainability, just not specifically labeling them as ESG. Companies have adjusted their terminology. As I said, they don't use ESG. They might refer to sustainability instead. We're even seeing some companies talking more in the language of clean air, clean water, and economic opportunity, effective and apparently palatable terms other than ESG. This trend, nicknamed green hushing, stems from a recent tide of ESG backlash and mounting legal considerations. Carolyn: What are some of those mounting legal considerations? Jennifer: In three words, Carolyn, litigation and regulation. From shareholder suits to regulatory actions to class action litigants that have lodged greenwashing claims against companies they accuse of releasing rose-tinted marketing materials. To those of you listening, we strongly recommend you talk to us or the lawyer you regularly deal with at Reed Smith regarding how to address these litigation and regulatory risks. Let me highlight some examples of legal risks and quick upshot regarding specifics to talk to Reed Smith about. First, there is a risk regarding NGO suits. These are suits brought against public companies for allegedly misleading climate change with regard to ESG. The up shot here is that it's important to regularly act on any given ESG commitment in meaningful ways that are grounded in science, regardless of how many years away a particular deadline for an ESG goal might be. We also recommend publicly sharing clear update

Most large U.S. companies buy catastrophic liability insurance through a Bermuda Form, a unique policy with many features designed to protect the selling insurance company. Further, Bermuda Forms require arbitration in London or Bermuda, under English procedural law and modified New York substantive law. John Ellison, Richard Lewis and Catherine Lewis explore how best to incorporate the Bermuda Form into policy programs, as well as the unusual hurdles to recovering under the Bermuda Form. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policy holders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  John: Hi, everybody, and welcome back to Insured Success. our continuing podcast series of important insurance topics. And today's topic is the Bermuda Form Part 1. This will be part of a two-part series we're going to do on this unique insurance product. And today's focus will be on the history behind the Bermuda Form and its development, and then some of the key policy terms. And then in our next episode, which will be coming out shortly, we will discuss how to perfect coverage under the Bermuda Form and issues relating to the unique dispute resolution provisions that are in the form. Today, our presenters are going to be my colleagues, Rich Lewis, who's a partner in the New York office, and Catherine Lewis, who is a senior associate in our London office, and I am John Ellison, a partner in the Philadelphia office. The three of us work together often on these Bermuda Form matters, as do many members, other members of our group. And due to our firm's geographic setup, depicted today by Catherine in London and Rich in New York, you'll learn that our firm is uniquely qualified and situated to handle these types of issues. So, Rich, I'm going to turn it over to you to give us some of the history and overview of the Bermuda Form. Rich.  Richard: Okay. Well, I don't know, obviously, our listeners' experience with coverage disputes, but policyholders in the 70s and 80s started buying a lot of liability insurance, and that had to do with developments in tort law in the United States. And if you've ever been involved in a case involving those policies, they typically were occurrence forms triggered by injury or damage in the policy period. And the coverage charts, as you got later in the 70s and through the 1980s looked like ski jumps. Companies were buying hundreds of millions of dollars of insurance in the late 70s and the early 80s. This also, as I'm old enough to remember, accelerated a lot in the early 80s because of the high interest rates that insurance companies could get. It was something called cash flow underwriting, where they would underwrite lots and lots of policies just to get the premiums in to invest the income. The bill came due in the mid-80s for a couple of reasons. One, there were a number of coverage decisions in the asbestos context that said that multiple policies could be triggered by the same injury to one person. So that meant that in an asbestos case, many, many years of coverage from the early 60s through the time when asbestos exclusions were more common in the early 80s could be triggered. The second reason was circled liabilities from environmental cases. And as a result, everybody was recovering under these policies that had been sold for not very much premium so that the carriers could get the money in the door. And what happened was the liability insurance market crashed. You literally could not buy liability insurance from any of the major players in 1985. So what happened was a number of Fortune 50 companies got together with Marsh & McLennan and they created a Bermuda form

With hurricane season underway and wildfires ravaging parts of California, understanding how to go about an insurance claim after a natural disaster is as important as ever. In part one of a two-part series on the topic, Matt Weaver, Chris Kuleba and Jessica Gopiao take listeners through many of the issues commonly faced by property owners immediately following a loss or potential loss and offer important advice for anyone in such a situation. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policy holders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Matt: All right, welcome back, everyone, to the Insured Success Podcast. My name's Matt Weaver. I'm a partner here at Reed Smith in the insurance recovery practice in Miami. I'm joined here by two of my favorite people, my partner, Chris Kuleba, who also sits with me in the Miami office, and my colleague, Jessica Gopiao, who splits her time between California and South Florida. It's hurricane season. It's also, unfortunately, wildfire season. We're here to talk today about some practical things and some important pieces of advice for anyone who's facing a loss or a potential loss due to any one of these events. Jess, Chris, you want to say anything more about who you are?  Chris: Sure, Matt. Thanks, and thank you for everybody for tuning in. My name is Chris Kuleba. As Matt mentioned, I'm a partner at Reed Smith in our insurance recovery group. I'm based in Miami. I've been doing insurance recovery work essentially my entire career. I was barred in 2013, so I'm going on 11 years now. I'll turn it over to Jess.  Jessica: Hello, everyone. My name is Jessica Gopiao. I am a senior associate and member of the Reed Smith's Insurance Recovery Group. As Matt had mentioned, I split time between South Florida and Southern California. Back in June, I chatted with Rich Lewis and John Ellison about navigating insurance claims after natural disasters. And with hurricane season being amongst us and the record-breaking wildfire season, we are now going to talk more about that.  Matt: So I think the goal here for everyone is to focus on what we, in our experience, have seen as key issues in these cases and these claims that drive outcomes. A lot of things can happen in the course of an insurance claim. Some of it is important. Some of it, candidly, is not. But we want to talk a little bit about things from our perspective that tend to really matter and tend to push these claims in one direction or the other. So Chris, you want to start us off?  Chris: Sure. And as Matt mentioned, this is by no means an exhaustive list. What we'd like to do is sort of take you through some of the sort of big picture, significant driver issues, starting from the beginning of a loss through the claims process and then through a process that's called appraisal, which is a alternative dispute resolution process found in most property insurance policies, though the nature and the scope of those provisions can vary based on the text of the policy. But first, if it's okay with everybody, I'd like to start with some causation issues. And by that, I mean when an insured or a property, I should say, suffers a loss, what is the relevant cause of that loss for purposes of determining coverage? In the instance of a hurricane or a wildfire, that is often very obvious, at least with respect to some of the immediate damage. But you'll find, as many of us have, that when submitting a claim, an insurance company will often point to damage, maybe that preexisted a hurricane or preexisted a fire in the case of a partial loss and seek to find ways within the policy to deny coverage for all or part of a loss.

Reed Smith partners Luke Sizemore and Andy Muha address challenges posed by mass tort litigation and discuss strategies for permanently resolving mass tort claims through bankruptcy and corporate dissolution. They also analyze the role of insurance recoveries in these strategies. ----more---- Transcript: Intro: Hello and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policy holders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist. Andy: Welcome to another episode of the Insured Success podcast. This is Andy Muha, a member of Reed Smith's insurance recovery group in Pittsburgh. And I'm joined today by my colleague Luke Sizemore, also of Pittsburgh, and from our firm's restructuring and insolvency group. Thanks for being here, Luke. Luke: Of course, Andy. I'm happy to be here. Andy: Luke and I are here to discuss an issue that intersects our two practices, insurance recovery and restructuring and insolvency. That is how to develop a permanent solution for the challenge of mass tort litigation. And I think the best way to start would be to talk briefly about the dimensions of the challenge. Mass tort litigation has been a part of the American legal scene for several decades. The term mass torts generally refers to claims for bodily injury arising from exposure to a product or continuously repeated conditions or behavior. Often, they involve a latency element, the period after the conduct that caused the injury, but before the injury manifests itself. And because of that latency period, mass torts typically pose the specter of an unknown number of future claimants. Bodily injury claims for asbestos exposure are the prototypical mass tort, but they also include claims for injury caused by talc, opioid painkillers, silica, defective medical products, and even institutional sexual abuse. Litigation of mass tort claims is expensive. Mass tort claims are typically filed in state courts, which are becoming more unpredictable and more plaintiff-friendly by the day. Claims are often filed in a variety of jurisdictions, and coordination of the defense efforts spread across multiple states adds expense and complexity. Historically, mass tort defendants have sought to cover the costs of both defending mass tort claims and paying for settlements or judgments on those claims by relying on liability insurance, whether in primary, umbrella, or excess policies. But many defendants face a troubling reality. If the mass tort claims at issue continue to be asserted indefinitely, the cost of defending and resolving those claims may exceed the limits of available insurance. That risk often is compounded by the fact that insurers themselves actively seek ways of evading coverage obligations that the policyholder defendant believes to be unassailable. Companies with healthy operating businesses may nevertheless find themselves beset by mass tort claims arising from long-since discontinued operations or from business units that were acquired recently or distantly. And despite a healthy operating business, mass tort problems can cast a pall over the company's overall prospects for growth. And they may be an impediment to strategic mergers, acquisitions, or other types of business combinations that the company may wish to explore. Given that it's typically impossible for a company to predict when the mass tort claims against it may come to a natural ending point, it can be difficult for mass tort defendants to make long-range plans that account for those mass tort liabilities in a realistic and reliable way. So, is it possible to find a permanent solution for mass tort claims in a way that puts a final stop to the financial blood loss those claims so often cause? The answer

Lisa Szymanski and Catherine Lewis are joined by Elizabeth Vieyra to discuss topical issues related to insurance towers and how policyholders can take steps to manage the issues that can arise in complex insurance programs. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policy holders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist. Lisa: Good morning, and welcome back to Insured Success. My name is Lisa Szymanski, and I am joined by my colleagues Catherine Lewis and Liz Vieyra to talk about some topical issues relating to insurance towers and how policyholders can take steps to manage what can often be very complex towers of insurance. On this podcast, we are sharing our views across international offices. Great to have you both here with us. So the majority of Reed Smith's clients are international clients operating across jurisdictions and seeking insurance for a wide range of risks. Our clients very often have a need for high limits. For example, they may operate in particularly risky sectors, by way of example, the energy sector or the transportation sector, where a loss has the potential to be catastrophic and therefore pierce multiple layers of a tower. Capacity reasons may make it necessary to approach multiple insurers in multiple markets. There may be limited capacity in certain markets. For example, D&O has seen high claims volume of late, and some years have high numbers of natural disasters, which squeeze the property market. Accordingly, it is not uncommon to have a range of London market, Lloyd's Syndicates, Bermuda, and U.S.-based insurers on any given risk. There may be local law issues which require placement of a primary policy in a certain jurisdiction, which is then reinsured in one or multiple global reinsurance markets. We will split this podcast into a few sections. First, we will discuss issues relating to continuity of cover. Second, we will look at issues regarding continuity of approach in the event a dispute occurs. For example, issues of governing law and forum. And finally, we will summarize our top tips for policyholders. But before we get into the detail, Catherine, could you tell us what we mean when we talk about an insurance tower?  Catherine: Right. So I'm going to assume that our listeners are all familiar with insurance generally. What we typically see is a primary policy or even a captive policy, which will respond to the first amount of loss over any deductible up to an agreed limit of liability. As you say, Lisa, the majority of our clients are major international companies with complex insurance arrangements. A single policy and a single limit of liability may be unlikely to provide them with the full cover that they need. And as you said, Lisa, there's a whole range of reasons why a policyholder may need more cover than a single insurer is able to provide. So these additional policy limits might be achieved by purchasing additional individual policies with different insurers which sit above the original policy. So for example, a primary policy might provide 50 million US dollars of cover, the next layer might be a further 25 million US dollars in excess of the original 50 million. And you might have a further layer providing an additional 50 million in excess of the 75 million dollars we've already talked about. So on that analysis, the tower would provide 150 million dollars of insurance cover in total. Ideally, the policies higher up the tower, but not always, which are written by different insurers are done so on identical terms as the primary policy. But I mean, we can discuss this in some more detail in a moment. There are some problems that can aris

Reed Smith insurance recovery lawyers, Richard Lewis, John Ellison and Jessica Gopiao discuss the complexities of handling insurance claims after natural disasters. This episode covers critical topics such as the nuances of replacement cost insurance, business income coverage, and the impact of wider effects of losses in mass catastrophes. They also discuss the foundational issues in property insurance, the importance of timely communication and documentation, and the role of forensic accountants and brokers in expediting claims. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policy holders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Jessica: Good morning, afternoon, or whatever time it is for you, and welcome back to Insured Success. My name is Jessica Gopiao. I am a senior associate and member of the Reed Smith's Insurance Recovery Group based in both Miami and Orange County. I am here with Rich Lewis and John Ellison, and we'll let them introduce themselves before we get started.  Richard: Hi, I'm Rich Lewis. I've been handling property and business income cases for about 30 years. Handled them from 9/11, Katrina, Rita, some of the storms in New York, and I've also written a book on business income insurance disputes that I keep updated and been writing it since 2006.  John: Hi, everybody. I'm John Ellison. I'm a senior partner in the Philadelphia and New York offices in the firm's insurance recovery group. Along with Rich and about 80 others of us, we handle first-party property and business income losses around the globe and have been doing it as long and probably with as much success as any other firm. So hopefully some of our experience today will translate well to assist you if you ever are in the unfortunate situation of having to deal with a natural disaster insurance claim.  Richard: All right, so just as a matter of background, we're going to be talking about first party or property insurance, and that generally covers tangible properties such as buildings and equipment and machinery and intangible property being the expectation of profit or additional costs you have to incur to keep in business. There are a number of foundational issues that come up in most property claims. The first is most people buy replacement cost insurance, And that is insurance that gives you new for old. And there is often a delta between what your property is worth when it is destroyed and how much it would cost to replace it. And what a lot of people discover for the first time with a property claim is that under policies, the insurance company only needs to front you what's called the actual cash value. And you have to arrange to get the replacement cost. And sometimes that is difficult. other issues that come up the carrier may want to repair damaged equipment or and you want it replaced in general you know if the way to handle this is to ask the original equipment manufacturer if they will honor any warranties if the equipment is repaired and they generally say they won't and if you're not put in the same position that you had prior to an event that's not the rule the rule is that you should be put in the same position. And that usually means replacement property, not repaired. As for the time element part of property, the general rule in business income is that it's to do what you would have done, but for the event. And that's, So for business income, that's the profit and the unavoidable continuing expenses. Extra expenses are expenses that you incur to keep in business, and there's usually coverage for extra expenses. One thing to note at the outset, and I think we're going to talk about it a little b

Carolyn Rosenberg, Stephen Raptis and Jalen Brown explain what “bump up” exclusions in D&O insurance are, and policy considerations when considering or structuring a transaction. ----more---- Transcript: Intro: Hello, and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues, and topics of interest affecting commercial policy holders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Carolyn: Welcome to our Insured Success podcast, the bump-up exclusion. I'm Carolyn Rosenberg. I'm a partner in our insurance recovery group on behalf of policyholders here in Chicago. With me today are my colleagues, Jalen Brown, also in Chicago, and Steve Raptis in our Washington, DC office. We'll get right into it. We've talked about the bump-up exclusion, which is a name. Jalen, can you start us off and tell us what do we mean when we say a bump-up exclusion?  Jalen: Yes, thank you, Caroline. So bump-up exclusions have become a hot issue for D&O insurance coverage. Insurers have begun raising these issues regularly in claims involving corporate mergers and acquisitions, insurers assert these bump-up exclusion claims whenever consideration paid in an acquisition is alleged to be too low. And so while a bump-up exclusion is referred to as an exclusion, we won't find a bump-up exclusion in exclusion sections. There is a carve-out for the definition of an otherwise covered loss. And so a bump-up exclusion provisions are often found within a D&O policy's definition of loss, and attempts to exclude the amount of a settlement or judgment that represents an increase in the price paid to acquire an entity where such consideration was alleged to be inadequate. There are a few exceptions to the bump-up exclusion. Virtually all bump-up exclusions carve out coverage for defense costs and side A claims, and I know Steve is going to tell us a little bit more about what side A claims are.  Stephen: Just as a little bit of history, D&O policies were originally put into the marketplace largely to protect the directors and officers from non-indemnified claims, the kind of claims that the company will not indemnify them for or can't indemnify them for legally. Those are side A claims. Many D&O policies also include side B and side C coverage that protects the company. But the side A claims are the non-indemnified claims against the officers and the directors.  Carolyn: So, Jalen had mentioned that these come into play in acquisition situations and transactions. Steve, tell us, where do you think the bump-up exclusions come into play most? What kinds of cases or situations should you be on the lookout for?  Stephen: In my experience, I've been seeing insurers assert that bump-up exclusions apply to really all types of corporate transactions. They haven't limited it to one type. It's become sort of a go-to generic defense anytime there's an allegation in a case that inadequate consideration was paid and consideration with a transaction. And that includes both public and private companies. And we have seen sort of a morphing of these exclusions. It used to be traditionally they would apply to, they would contain language that made them applicable to acquisitions. That was a key word, and often it would be accompanied with acquisitions of all or substantially all of the assets of some other entity, and that was where the exclusion applied. But more contemporary versions we're seeing have really gotten away from that acquisition language. We might call it a restriction. And we know that with most public company transactions, they will be challenged. It's the nature of the beast. And when I say challenged, one side, one set of shareholders or another will claim that either their side paid too much or the other side wil

Catherine Lewis and Emma Shafton team up to discuss the UK's Economic Crime and Corporate Transparency Act of 2023 and its potential impact on directors and officers (D&O) insurance coverage. Both based in London, the lawyers discuss important steps that policyholders can take to mitigate risks. ----more---- Transcript: Intro: Hello and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues and topics of interest affecting commercial policyholders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Catherine: Welcome back to Insured Success. My name is Catherine Lewis. I'm a senior associate in our London office. I am joined today by my colleague Emma Shafton, who is a senior associate in our global regulatory enforcement group who specializes in white collar crime and investigations. Today, Emma is going to talk to us about the two new corporate criminal offenses contained in the Economic Crime and Corporate Transparency Act 2023 which came into force in the UK at the end of 2023. And we are going to share our insights on what this means for policyholders operating in the UK. The potential impact on your directors and officers and other insurance cover and some of the steps that policyholders can take to mitigate risks. Emma, could you give us an overview of this new legislation?  Emma: Sure. So the Act, ECCTA I'll refer to it as, came about as part of the UK government's response to Russia's invasion of Ukraine in February 2022. By this time, there was an increasing understanding that London had become um a dumping ground really for dirty money by foreign elites, Kleptocrats and other bad actors and that the UK's economy was being abused. So the act represents a complete overhaul of the UK government's framework for tackling economic crime. The act itself covers a very broad range of issues. You know, beyond the scope of this podcast, including companies house reforms, but today, we're going to focus on two significant changes to corporate criminal law. The first is the new senior manager's offense and the second is the new failure to prevent fraud offense. So let's deal with the first offense first. So that's the senior manager's offense and that's under section 196 of ECCTA. Uh This came into force very quietly on boxing day last year actually. Um and a lot of Corporates have been caught by surprise by it and it's worth flagging at the outset that this is completely separate to the FCA's existing senior managers and certification regime. These are different things. It's perhaps unfortunate that the draftsman of a decided to use the same language because the definitions unhelpfully do not correlate. Um So I just wanted to flag that at the beginning, we're dealing with a completely new corporate criminal offense here. What the offense means basically for corporates is that if a senior manager of the organization acting within the actual or apparent scope of their authority commits a relevant criminal offense and those offenses are economic crimes. So things like theft, bribery, fraud, false accounting money laundering, and also certain tax offenses. If that senior manager commits one of those specified offenses, the corporate can be criminally liable. Now, what the repercussions of that would be, is a very large fine. Essentially. Now, this offense um can apply to senior managers of a body corporate or partnership and there's no size criteria or threshold. So that means that all organizations um of any size could be liable so long as the jurisdictional requirements are met, you know, this is a UK act and we'll come on to that um, Later.  Catherine: Interesting, this seems like a really big shift from the previous regime. Is, is that right?  Emma: It is. So the new senior manager's offense is

David Cummings and Lauren Gubricky are joined by Jeff Buzen of McGill and Partners to discuss representations and warranties insurance, best practices for making claims and trends in the industry. ----more---- Transcript: Intro: Hello and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues and topics of interest affecting commercial policy holders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  David: Hello and welcome to another episode of Insured Success. Thanks for joining us. My name is David Cummings. I'm a partner at Reed Smith in our insurance recovery group. A way of just a little bit of background. My practice focuses on navigating insurance coverage, disputes, litigation, mediation and arbitration for our corporate policyholder clients, as well as helping those clients navigate insurance placements, renewals claims and the like all with their insurers. An ever growing part of that practice involves a product called representations and warranties insurance or reps and warranties insurance. That's a topic of our discussion today. So before we get started, I have a few introductions are in order. Uh I'm joined today by my colleague, Lauren Gubricky, an associate in Reed Smith's insurance recovery group. Hi, Lauren.  Lauren: Hi, Dave. Thanks for having me.  David: I’m also joined by our guest, Jeff Buzen, a partner in financial lines at McGill and Partners. Hi, Jeff. And thanks for joining us today.  Jeff: Thanks Dave. Great to be here.  David: So, between the three of us, we're gonna cover a few topics today. So I'm gonna start and provide a high level overview of reps and warranties insurance, what it is and how it's used. Then I'm gonna pass it to Lauren who's going to focus on reps and warranties claims and a few best practices. And along the way, we're gonna talk with Jeff to provide us with some insights and trends with respect to the reps and warranties market. So with that, let's get started. So let's start with a quick overview, reps and warranties insurance. What even is it? At at a very high level in a private equity deal, we have company A, the buyer purchasing company, B, the seller. So as part of that purchase and as a result of information borne out through due diligence, the seller makes certain reps and warranties regarding its business. Those can include ongoing risks, contingent liabilities, reps related to financial statements and so on. Traditionally, to hedge against the risks of inaccurate or incomplete information, the asset purchase agreement would provide recourse to the buyer in the form of an indemnity provision and the way that works is a seller would have to back that obligation with funds in the form of a hold back or escrow uh and keep those funds in place for a negotiated survival period, often for several years. Now, the issue is that these indemnity provisions can be the source of extensive negotiations in and of themselves negotiations that could add layers of unwanted complexity to a deal. Um And that may result in delays and disagreements. And in some cases, historically, the deal could collapse entirely over, over these disagreements and these negotiations. So insteps reps and warranties insurance. This product was developed to at least in part to avoid these issues and speed up deals by shifting the risk to a third party insurance company. This allows for higher indemnity limits and survival periods without material increasing seller exposure all while being able to keep up deal pays to close quickly and not be bogged down by extensive disagreements or negotiations between the buyer and the seller. So what do these policies look like? So they can be purchased by the buyer as first party coverage or the seller as third party coverage in practice t

Laura-May Scott and Margaret Campbell analyze the ABN AMRO Bank N.V. v. RSA et al case in detail and also cover what should be included in a marine cargo policy. ----more---- Transcript: Intro: Hello and welcome to Insured Success, a podcast brought to you by Reed Smith's insurance recovery lawyers from around the globe. In this podcast series, we explore trends, issues and topics of interest affecting commercial policy holders. If you have any questions about the topics discussed in this podcast, please contact our speakers at insuredsuccess@reedsmith.com. We'll be happy to assist.  Margaret: Hello, welcome back to the Insured Success IRG podcast. I'm Margaret Campbell, a partner at Reed Smith and this is my partner, Laura-May Scott. We are both insurance recovery specialists. Today we're going to present to you a case analysis on a very important case that we worked on during the pandemic. In this case, we represented ABN AMRO who was suing a group of 14 insurers in the company and the Lloyds Market and ABN’s broker, Edge, for losses it thought it should have been covered for under its marine cargo insurance policy.  Laura-May: And it's worth setting the scene here a bit and reminding listeners what a marine cargo policy typically covers. A marine cargo policy does not just provide cover for marine transit. It's capable of being extended to cover transport by air, rail, road and storage. So marine cargo cover can ensure the entire movement irrespective of the means of transport of the underlying goods. Now, under a standard insurance policy, it's only the physical loss or damage to the goods which is generally the subject matter of the insurance.  Margaret: So going back to the ABN case, the case there concerned losses of £35 million suffered by the bank when two of its customers Transmar and Euromar defaulted under a series of repo financing deals over cocoa and cocoa products. And a significant fraud was uncovered in relation to the defaulted transactions. Not only had the same goods been pledged to various banks, but the quality of the goods was absolutely terrible. Following their defaults, the bank was left holding large quantities of cocoa and cocoa products worth only a fraction of the loan repayments due to the bank. During the course of this case, Laura-May and I learned a lot about cocoa and cocoa products, much more than the man on the street ever knows. And we would issue a warning to everyone listening to this podcast to avoid cheap chocolate.  Laura-May: Yes, indeed. Initially, we worked with the bank and the broker to seek to persuade the insurers to actually pay out under the policy. We gave presentations to them on the underlying goods and the steps that were being taken by the bank to recoup losses. Thereafter, we entered into formal correspondence where the bank formally claimed an indemnity for the shortfall under an all risks policy of marine cargo insurance, which as Margaret says was placed with 14 cargo insurers in the London market by Edge brokers. However, the insurers formally rejected the claim after five long months of discussion.  Margaret: So this claim was actually made for financial losses arising from the defaulted transactions. The problem was the cargo was valued at 35 million and when it came to be sold, it was worth, you know, just a couple of million. Uh There had been no physical loss or doubt with just a question of quality. For those of you familiar with marine cargo insurance, there have been many legal authorities in England that say that in order to trigger a marine cargo policy, you must have physical loss or damage to the cargo. So what was different here? Well, in this case, this was precisely the risk that the bank was, was concerned about and they talked about it internally, they took legal advice from outside lawyers, they talked to their brokers, they went backwards and forwards for months saying in this scenario, what would happen in that scenario, what would h