Ensuring that Businesses are Assured about Insurance LitigationNovember 19, 2011
The attorneys at Hornberger & Brewer have a proven method for getting business clients the results they seek in business and commercial litigation. Our practice has touched on many disputes common to the business community.
In the area of insurance litigation, we have in-depth experience regarding insurance defense, insurance agent or broker error, fraud or malpractice, insurance coverage and bad faith issues.
Insurance fraud occurs when companies, agents, adjusters, health care providers or consumers intentionally deceive others or misrepresent facts for financial gain.
Since companies divide the costs of claims among policyholders, fraudulent insurance claims drive up premium costs. Each year, insurance fraud costs consumers an estimated $150 billion, an average of almost $1,000 per family in additional insurance premiums.
Fraud against Businesses
Businesses with risks that are hard to insure and small businesses that have difficulty affording coverage are particularly vulnerable to insurance fraud.
Some insurance companies or agents, many times unlicensed, often target businesses to sell fraudulent insurance policies.
In October 2011, the owner of a Houston-based insurance brokerage pleaded guilty in a Texas federal court to one count of conspiracy to commit wire fraud. Christopher Purser, who owned Monarch Insurance Services Inc., faces up to 20 years in federal prison for selling a fake insurance policy to an upstate New York tour boat operator. He then tried to retroactively limit the policy after a 2005 boating accident that killed 20 passengers.
A fraudulent insurer might also claim its plan is exempt from state regulation because it is self-funded or offers an authorized federal Employee Retirement Income Security Act (ERISA) plan. While it is true that ERISA plans are exempt from most state laws, they are usually created by businesses and organizations to cover their own employees or members. A business will almost never be sold a valid ERISA plan from an outside company or agent.
Business insurance fraud also often involves workers’ compensation coverage. In most cases, employers with a valid workers’ compensation policy are legally protected from lawsuits brought by injured employees. Policies sold by unlicensed or fraudulent companies are not considered workers’ compensation under state law and do not provide this protection.
Fraud-minded insurance companies and agents might also try to sell the following types of policies:
- Medical malpractice
- Commercial general liability
- Contractor performance bonds
- Auto liability coverage for truckers
Remember, if you have insurance litigation issues, the attorneys at Hornberger & Brewer thoroughly understand underlying business concepts and California business law.
Verdicts & Settlements
- $33 Million verdict Wrongful death action against O.J. Simpson
- $19 Million verdict Malicious prosecution action against Chinese importers
- $6.8 Million verdict Business fraud & conversion case representing a Russian company
- $6.5 Million settlement Breach of contract action against multinational corporation resulting in a $6,500,000.00 settlement
- $5.3 Million verdict Business fraud and breach of contract case
- $4.7 Million verdict Wrongful death / Fraudulent transfer case representing both American and Ukrainian residents
- $4.7 Million settlement Liver Transplant case for wrongful death of Saudi Arabian citizen
- $3.1 Million binding arbitration Personal injury's head on collision
- $2.0 Million settlement Fraudulent transfer case
- $2.0 Million settlement Independent Sales Organization for alleged breach of contract claim
- $1.75 Million settlement Shareholder in connection with corporation shareholder dispute
- $1.5 Million settlement Fraud and breach of contract case
- $1.5 Million Judgment Breach of contract and defamation action resulting in default judgment collected
- $1.3 Million verdict Employment and breach of contract case
- $1.2 Million verdict Misappropriation of trade secrets and indemnity claim
- $1.0 Million settlement Employment termination and breach of contract case
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