These are slides for a presentation that two of my partners and I gave last week to the Japan American Society of Georgia. The presentation focuses on how companies, particularly manufacturers, can find hidden resources in their insurance policies. For example, policies that are decades old may provide coverage for claims made today for environmental and asbestos claims. Companies can also potentially save hundreds of thousands of dollars through defense obligations in their current policies. The presentation also covered potential gaps in coverage due to increasing exclusions in general liability policies, and the need for companies to have an experienced and proactive agent or broker willing to take the time to understand their business and its risk profile.

1. Buried Treasure: John L. Watkins Mari Yamamoto Regnier
john.watkins@btlaw.com mari.regnier@btlaw.com
Finding Resources in 3475 Piedmont Road, N.E.
Suite 1700
Atlanta, Georgia 30305
One North Wacker Drive
Suite 4400
Chicago, Illinois 60606-2833
Your Insurance (404) 264-4043 (Direct)
(404) 663-0538 (Cell)
(312) 214-8335 (Direct)
Policies
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© 2012 CONFIDENTIAL Barnes & Thornburg LLP. All Reserved. This This and all information on it, on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, may not be disseminated or disclosed to anyone other other than an employee or partner of
Barnes & Thornburg LLP who iswho is authorized to receive it. page and all information on it mayit may not be reproduced, in any by anyone without the express written consent of the of the author or presenter.
Barnes & Thornburg LLP authorized to receive it. This This page and all information on not be reproduced, in any form, form, by anyone without the express written consent author or presenter.

2. Are You Sitting on Buried Treasure?
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© CONFIDENTIAL Barnes & Thornburg LLP. LLP. All Rights Reserved. This and and all information is it, is confidential, proprietary and the property of Barnes & Thornburg LLP, may may not be disseminated or disclosed to anyone than than an employee or partner of
Barnes & Thornburg LLP who is authorized to receive it. This page pageall information on it may not be reproduced, in any form, form, by anyone without the express written consent of the author or presenter.
Barnes & Thornburg LLP who is authorized to receive it. This and and all information on it may not be reproduced, in any by anyone without the express written consent of the author or presenter. 2

3. Your Insurance Policies May Provide Hidden
Resources
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CONFIDENTIAL Barnes & Thornburg LLP. All Rights Rights Reserved. This page, information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which which may not be disseminated or disclosed to other than an employee or partner of
Barnes Barnes & Thornburg LLP authorized to receivereceive it. This page and all information on not be reproduced, in any form, by anyoneanyone without the express consent of the author or presenter.
& Thornburg LLP who is who is authorized to it. This page and all information on it may it may not be reproduced, in any form, by without the express written written consent of the author or presenter. 3

4. This Presentation Will Help You Find It!
• How policies cover
claims
• Unexpected claims
your policies may cover
• Possible gaps in your
coverage
• Common sense steps
to protect your
business
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Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 4

5. Caution!
• This presentation will not make
you an expert
• Insurance is complicated
• Just about every “rule” has an
exception!
• Goal is to increase your
awareness of insurance
resources
• Get professional advice from
your own jurisdiction!
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Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 5

6. The Basics: How Liability Policies Are
Structured
• Policies typically are written for one year periods
– And renewed or replaced every year
• “Occurrence” policies typically include:
– Commercial general liability
– Excess liability (sometimes “umbrella”)
– Motor vehicle policies (“accident”)
• “Claims made” policies typically include:
– Professional liability (malpractice; errors and omissions)
– D&O policies
– Environmental liability coverage
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Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 6

7. “Occurrence” vs. “Claims Made”
• “Occurrence” policies cover liabilities:
– Resulting from an “occurrence” (an act or omission, accident or
event)
– That happens during an annual policy period
– Regardless of when the claim or lawsuit is asserted
• “Claims made” policies cover “claims” (demand for
money or lawsuit):
– Made (and usually reported) during the policy period
– Regardless of when the act or omission happened
– But subject to the “retro date”
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Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 7

8. Occurrence Policy: How It Works
Policy Period Begins
(12/ 01/ 2010) Policy Period Ends (12/ 01/ 2011)
2010 2011 2012 2013 2014
"Occurrence" (07/ 01/ 2011)
Claim or Law suit (11/ 01/ 2013)
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© CONFIDENTIAL Barnes & Thornburg LLP. All Rights Reserved. This page, and and all information is confidential, proprietary and and the property of Barnes & Thornburg which may not not be disseminated or disclosed to anyone other an employee or partner of
Barnes & Thornburg LLP LLP who is authorized to receive it. This page all information on it on it maybe reproduced, in any form, by anyone without the express written consent of the author or presenter.
Barnes & Thornburg who is authorized to receive it. This page and and all information may not not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 8

9. Claims Made Policy: How It Works
Policy Period Begins (12/01/2010) Policy Period Ends (12/01/2011)
Retro Date (01/01/2005)
2005 2006 2007 2008 2009 2010 2011 2012 2013
Act or Ommission Claim Asserted (08/11/2011)
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© 2012© 2012 CONFIDENTIAL Barnes & Thornburg LLP. All Reserved. This page, and all and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP,may not be disseminated or disclosed to anyoneanyone other than an employee or partner of
CONFIDENTIAL Barnes & Thornburg LLP. All Rights Rights Reserved. This page, information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which which may not be disseminated or disclosed to other than an employee or partner of
Barnes Barnes & Thornburg LLP authorized to receivereceive it. This page and all information on not be reproduced, in any form, by anyoneanyone without the express consent of the author or presenter.
& Thornburg LLP who is who is authorized to it. This page and all information on it may it may not be reproduced, in any form, by without the express written written consent of the author or presenter. 9

10. Occurrence vs. Claims Made: What It Means
• Occurrence policies
can cover claims
made decades after
the policy was written
• “Claims made”
policies were
developed by insurers
to avoid “long tail”
risks
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Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 10

11. Buried Treasure in Old Insurance Policies
• Most occurrence policies (CGL and excess) provide
coverage for claims for “bodily injury” (including death)
or property damage subject to stated exclusions
• Older policies often have broader coverage with fewer
exclusions
• “Long tail” risks that may be covered include:
– Environmental claims
• For example, old plant sites
– Asbestos claims
 Note: Plaintiff’s lawyers are now on third or fourth tier targets
 Companies with little obvious risk may have exposure
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12. Most Likely “Treasure Hunters”
• Companies long-term
on-going operations
– Paper and wood product
companies
– Chemical companies
– Manufacturing companies
– Utilities
• Do not forget about mergers
and acquisitions!
– Insurance review should be
part of “due diligence”
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13. Buried Treasure: Defense Costs
• Never assume a claim is not
covered
– Insurer’s basic obligations
usually include providing a
defense and paying claims and
judgments
• Basic rule: If any part of a
lawsuit is potentially covered,
the insurer must defend the
entire case
– Obligation to defend is broader
than obligation to indemnify
– Defense obligation can save
hundreds of thousands of
dollars
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14. Buried Treasure: Unexpected Coverage
• Insurance coverage is not intuitive
• Types of claims that may be covered
– Construction defects
– Defamation (libel and slander)
– Trade secret violations
– Breach of contract (if coupled with negligence allegations)
– Breach of fiduciary duty
• Always assume a claim may be covered
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Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 14

15. Current Coverage Issues: Buyer Beware!
• The on-going game:
– Courts find claims are covered
– Insurers add exclusions
• “Commercial general
liability policy” is not
so general anymore
• Exclusions increase
every year
– “Absolute” pollution exclusion
– Fungus exclusion (mold)
– Asbestos exclusion
– Silica exclusion
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Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 15

16. Aggressive Coverage Positions
• Insurers combine increasing exclusions with aggressive
efforts to deny coverage
• Example: “Absolute” pollution exclusion
– Purpose was to avoid liability for environmental risks
– Use has expanded far beyond this:
 Death resulting from carbon monoxide from faulty furnace
 Curry odor from Indian restaurant
 Can result in the “never pay policy”
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Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 16

17. The Era of “A la Carte” Coverage
• Insurers are forcing insureds to buy specific extra
coverage or to pay extra to avoid exclusions
• Examples
– Professional liability coverage
– Environmental coverage
– Cyber-liability risks
– Sexual misconduct coverage
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© 2012 CONFIDENTIAL Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of
Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 17

18. The Critical Importance of an Expert Agent
• Insurance is bought
through agents and
brokers
• Agents are not equal
• Agents should:
– Develop a comprehensive
understanding of your business
and risks
– Be able to advise regarding
coverage trends and risks
– Be expected to review all
coverage, including major
exclusions
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© 2012 CONFIDENTIAL Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of
Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 18

19. Common Sense = Buried Treasure
• Obtain copies of all
policies
– Not just the “declarations”
pages
• Keep copies of all
policies
• Find copies of old
policies
– Ask agent or broker
– Ask insurance company
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Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 19

20. Common Sense = Buried Treasure
• Assume any claim
may be covered
• Provide prompt notice
– Insurers often deny coverage
based on late notice
– Particularly critical for claims
made policies
– Do not assume it’s just a
technicality!
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Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 20

21. Common Sense = Buried Treasure
• Special considerations apply to claims made policies
– Claims must often be “reported” during the policy period
– In order to have continuous coverage, coverage must be
renewed every year
– Or purchase an “extended reporting period”
– Very important if you are exiting a business
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Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 21

22. Common Sense = Buried Treasure
• Never accept your insurer’s determination (or even your
agent’s) that a claim is not covered
• When to involve coverage counsel:
– If there is a “bet the company” claim
– If you receive a “reservation of rights” or “denial” letter
– If you need a comprehensive review of your insurance program
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© 2012 CONFIDENTIAL Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of
Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 22

23. What Do Coverage Lawyers Do?
• Evaluate coverage programs
– Including regarding mergers and acquisitions
• Evaluate coverage for particular claims
• Monitor and serve as independent counsel in claims
being defended by insurers
• Negotiate with insurers
• If necessary, file or defend coverage and bad faith
litigation
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© 2012 CONFIDENTIAL Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of
Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 23

24. Conclusion
• Goal: Increasing your awareness of possible insurance
resources
• Questions?
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© 2012 CONFIDENTIAL Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of
Barnes & Thornburg LLP who is authorized to receive it. This page and all information on it may not be reproduced, in any form, by anyone without the express written consent of the author or presenter. 24