Articles Posted in D&O

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Feeling wired about risks arising from the Telephone Consumer Protection Act? Maybe you should. The TCPA subjects businesses that use text messaging, auto-dialing, and bulk faxing for advertising and marketing to potential class action litigation. Financial institutions, various supermarket chains, and recently Caribou Coffee have all been targeted in TCPA class actions. But policyholders who get static over such claims are not without recourse: several lines of liability insurance may answer the call.

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Many policyholders assume that if an insurer pays to defend a claim against them, the policyholder will never be asked to pay those costs back. And most often they’re right. But sometimes the insurer may demand that the policyholder pay back some or all of the defense costs. Such insurers treat the contractual duty to defend or to indemnify the insured for defense costs as little more than a lending facility.

PrintMost of the time, such insurer demands are unjustified. But companies should understand when and under what circumstances insurers might seek reimbursement or recoupment of defense costs so they can avoid agreeing to do so unnecessarily or at least plan in advance financially.

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