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Monthly Archives: October 2012

What Do Ice Cream and Pornography Have in Common?

 

A pint of Ben & Jerry's ice cream

 

For the answer, it is only necessary to refer to the recent lawsuit filed by Ben & Jerry’s against the creator and distributor of X-rated “Ben & Cherry’s” DVDs, Caballero Video (Video Company). (http://www.bloomberg.com/news/2012-09-05/ben-jerry-s-sues-porn-seller-over-flavor-tied-titles.html)

In the case, Ben & Jerry’s claims that the “hardcore, pornographic” films infringe and dilute the famous trademarks and trade dress of the ice cream maker, additionally claiming unfair competition and deceptive trade practices. The lawsuit, filed in the U.S. District Court, in Manhattan, complained that the design and sale of the pornographic DVDs tarnished and damaged the reputation of Vermont-based Ben & Jerry’s. The complaint alleged the defendants’ “exploitative, hardcore pornographic films” used titles and themes based on “well-known and iconic” Ben & Jerry’s ice cream flavors. The DVDs also used packaging that directly copied elements of the ice cream containers, including a grazing cow, green grass and large white puffy clouds.

Ben & Jerry’s complained that the films would likely cause “confusion, mistake or deception” by use of such X-rated names as “Boston Cream Thigh,” “New York Fat & Chunky” and “Peanut Butter D-Cup.” Ben & Jerry’s ice cream flavors include “Boston Cream Pie,” “New York Super Fudge Chunk” and “Peanut Butter Cup.” The lawsuit requested temporary and permanent injunctions, plus unspecified damages. Companies, such as the Video Company, referred to as “grasshoppers,” may look harmless enough, but in the world of intellectual property (IP) they are becoming a dreaded plague. They find a successful company, jump in, in this instance, copy or modify the slogan or image, and ride the coat tails of Ben & Jerry’s fame and goodwill and notoriety.

Where is the insurance coverage for this lawsuit? 
There are actually two questions: 1) Does the Video Company have any insurance coverage to defend the lawsuit and, 2) does Ben and Jerry’s have any insurance coverage to sue the X-rated Video Company for trademark or trade dress infringement? The policy many would automatically turn to is  the Commercial General Liability (CGL) policy, where there would be extremely limited coverage, if any, for intellectual property (IP) risks. Undoubtedly, there would be a “NO COVERAGE” answer for both companies.

The Video Company would have looked to the Personal and Advertising Injury section under the CGL policy and, in an edition dated prior to the 1998 CGL, some defense coverage for trademark infringement could have been found. Since the Personal and Advertising section of the CGL policy greatly transformed in 1998 by providing coverage only for “infringing upon another’s copyright, trade dress or slogan in your advertisement,” the Video Company would have a tough time finding any coverage, because the inclusion of the word “advertisement” would preclude such coverage. Likewise, the CGL policy would only provide defensive coverage, on a limited basis. Accordingly, there would have been no coverage for Ben & Jerry’s litigation expenses as a plaintiff to enforce their IP rights.

The Insurance Solution:
Both parties could have benefited by holding specialized IP insurance policies for their IP risks. According to Intellectual Property Insurance Services Corp. (IPISC), the industry leader in providing insurance products for IP risks, an IP Defense Insurance policy would cover allegations of infringement by the names of products, including catalogs of media offerings. The underwriters would consider the scope of use and proximity to other marks of products to be insured. When a business, such as the Video Company, employs parodies of existing trademarks, the likelihood of conflict increases. If found insurable, this type of business would have a higher business risk, and probably an increased self- insured retention.

To enforce its IP rights, Ben & Jerry’s could obtain an IP Abatement insurance policy, a unique plaintiff’s policy, to help cover the costs of enforcing its trademarks and trade dress against alleged infringers. Abatement policyholders are put in the stronger position to make cease and desist demands because they can tell an infringer that insurance proceeds support the case.

Fortunately for Ben & Jerry’s, the court quickly granted a preliminary injunction order forbidding the Video Company from further distributing the offending titles. If the case had been more arguable, either side would have been at an advantage with specialized IP insurance. Many times, dedicated IP insurance policies can be a critical piece of a company’s risk management plan. Ensuring minimal protection is in place for a potentially devastating IP litigation exposure is essential to protecting companies’ overall financial strength.

 

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Let’s Sell Life Insurance in 2013 Improving our Bottom Line

 

As we round the corner to 2013, we are all in the budget process and hopeful that our profitability will improve next year. We have already learned to work lean and mean by decreasing our work staff but now we have to look to new ways to make money WITHOUT adding overhead.

The Insurance Community Center and University has a solution for you.

Our world has changed. Ten years ago or more, our property and casualty insurance companies were begging us to sell their life products offering us special trips and prizes tied into life sales. That just is not happening anymore, few property and casualty companies are pushing the life sales with the exception of many of the direct writers. So it amounts to us not having pro-active markets; not being enthused by the sale and passing up the sale—missing the revenue that would be a natural add on to our book of business.

Over the past 30 years, I have talked to many Property and Casualty brokers about adding life Insurance products to their product offerings, rounding out their own accounts. Depending on the size of the agency, we have heard a lot of reasons why they are NOT selling life insurance or how they are attempting to create that sale such as:

We do not want to sell life insurance because:
1. We are a P & C shop and don’t want to get into the life area
2. We are a P & C shop and have no one that knows anything about life
3. We don’t have the time!

We would like to make money selling life insurance, but:
1. We would have to add a life producer to our agency
2. We would have to cross train one of our over-worked P & C people to sell and handle life insurance
3. We would have to refer the life client to the one branch office that handles life insurance
4. We have a relationship with a life agent that gives us a split on the commission
All of these excuses or solutions amount either to lost revenue (premium leakage) or incurring additional overhead expense.

For those P & C agents that have attempted to enter the life industry, many of them have crashed and burned in the process: For those P & C agents that have adopted the procedure of referring their trusted clients to an outside entity, not only are they losing control and revenue but also putting that customer in contact with a firm that is not branded as part of our operation. Whether it is a life wholesaler from one of your carriers, or a firm that you are collaborating with, you still have the issues of trust and access.
We have to approach this New Year with a new directive—to increase our revenue in writing life insurance WITHOUT overburdening our staff or add more overhead cost. By every study that LIMRA has published over the last 20 years the Life Insurance market is under served, fewer people than ever are being contacted about Life Insurance and by all accounts there are fewer agents selling the product. With the contraction of the retail distribution system selling Life Insurance over the past 20 years there are fewer agents being trained to sell the Life Insurance products – so competition, especially for the more complex and lucrative sales is getting lighter and lighters spelling out opportunity for producers.

By partnering with Quick life, you can remove the barriers and expense to writing life insurance. The Quick Life platform solves the structural problems.

Quick Life creates an immediate back office support system, which eliminates the overhead needed to create a life and annuity department. Quick Life is a delivery system that produces consistent results.

Quick Life Structure:
• Provides online quoting of competitive carriers
• Factors in health issues before underwriting
• Allows application taking from all carriers over the phone
• Takes over all parts of the underwriting process, including examinations and signatures
• Facilitates appointments with needed carriers
• Has concierge service which eliminates any producer time
• Will assist in the servicing of in force policies.
• Provides street compensation to the producer

Quick Life Delivery:
• Is structured to allow greater capacity
• Utilizes existing staff
• Integrates internal social media and technology based marketing systems to existing and new clients
• Allows for involvement and control by broker, without commensurate time commitment
I have been using this platform myself for the past 4 years and it has allowed me to create a structure that historically would have required time and capital. Quick Life is working together with the Insurance Community Center to make this platform available to all of its members. For details, please visit – http://www.iccquicklife.com or contact Insurance Community Center Attend our seminar on October 11th titled Sales Opportunities in Life & Annuities—An Introduction to Quick Life taught by George Fraser, Director of Marketing for Quick Life.
This could be the most valuable hour you spend preparing to succeed in 2013.

Written by:
Laurie Infantino AFIS, CISC, CIC, CRIS, ACSR, CISR
President, Insurance Community Center
and
George C. Fraser III,
Director of Marketing
Quick Life

 

 

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Of Mice & Men

 

Yosemite

 

We are not talking here about the book “Of Mice and Men” written by John Steinbeck but; rather the recent incident In Yosemite National Park involving Deer Mice infecting visitors to Curry Village with Hantavirus Pulmonary Syndrome (HPS).  The incident was reported in early September, 2012 after a ninth person had contracted the disease that had already killed three people.  The latest guest that contracted the disease had stayed in the hotel in July and had recovered from the disease. Deer mice are the carriers of this virus and spread it to humans by their waste products left behind, in this case, in the cabins and inhaled by the guests when the virus mixed with the dust and air in the poorly ventilated cabins.  There is no cure for HPS which kills more than 1/3 of the individuals it infects.  Early detection is the key to preventing serious illness.

There are a lot of issues in play on this loss as relates the responsibilities and potential insurance exposures and solutions for Curry Village AND Yosemite National Park as a whole.  I might as well warn you now that many of the potential insurance losses may not be covered.

Notifying the Public about the infestation and disease:
This comes with a price tag and a long-term affect.  Yosemite had originally notified 30,000 visitors who slept in two specific locations in the park and then had to expand their warning by notifying 230,000 more who stayed in the general areas in the park as a precaution.  This notification goes well beyond just emails.  Representatives must make statements in the press and make every effort to manage the crisis.  Following a “crisis” it is vital that an organization communicate to the public about what occurred in order to save their reputation and limit public anxiety. This key public awareness effort and costs associated with the campaign can be covered under specialty coverage known as Crisis Management or Crisis Communication Coverage.  Coverage can be purchased as a stand-alone policy, by endorsement to the CGL or Umbrella and some companies are including limited coverage in a “bucket” of coverages they add to their policy.  Liberty Mutual, for example launched a crisis management insurance endorsement to their umbrella policy with a standard limit of $50,000 with additional coverage up to $250,000 available.

See the entire Business Insurance article at: http://www.businessinsurance.com/article/20120118/NEWS05/120119881?tags=%7C338%7C69%7C75%7C305%7C340%7C83#

Some insurance companies, such as Philadelphia Insurance Company, includes Crisis Management coverage in their package policies.  The coverage language will vary slightly and a number of specifically described coverage responses are included within this “bucket” limit.

Another crucial component to reacting to a crisis of this type is to be pro-active in having a Crisis Risk Management Plan in effect. This goes way beyond the issue of mitigating the loss when it happens to. What is important to address is the “long –term “effect of such an incident that stays in the minds of potential customers long after the problem has been remedied.

Taking all necessary measures to make sure they have eradicated the problem with safeguards put into effect that it will not occur again.

The outbreak of HPS has been linked to a higher rodent population in the national park.  The National Park Service currently has assigned two epidemiologists to work in the park trapping rodents for testing. Additional studies are being done to determine if the Yosemite rodent population is higher than normal after a record snowpack in 2011 provided ample water for the grass seeds mice favor.

“Rodents and mice are native to the park, but we are looking at the populations and working with our wildlife biologists to determine if the population is too high,” Gediman said. “There are rodents here, and we could never trap them all so that’s not going to mitigate it.” Since the first illness was reported earlier this month, employees of Delaware North disinfected all 408 canvas-sided and wood-sided cabins in Curry Village. Workers are in the midst of shoring up the cabins in an attempt to keep mice from have easy access. http://www.insurancejournal.com/news/west/2012/08/29/261096.htm

It is clear from this report that the park is taking significant measures to identify the problem; contain the problem but, admittedly, cannot eradicate the cause of the problem which is indigenous to the area.

On September 26, 2012, California public health officials and researchers announce that a groundbreaking series of studies of this rare disease have been launched and they will essentially be using the 1,200 square mile park as its natural laboratory to gain insights into this disease and its transmittal to humans.  Public health officials are also developing a voluntary medical screening of the parks’ 2,500 plus employees.

And all of this comes at a cost to the park which, for all practical purposes, is not a cost that would be covered by insurance.  Perhaps you are thinking Extra Expense would pay for these extra costs—but, look more closely at what caused this loss!

Loss of Income and Extra Expense
This is the easiest insurance answer of them all—no coverage.  It is true that the park is suffering extra expenses; it is true that the park can demonstrate that they lost income directly as a result of the illnesses caused by the rodents; it is true that the park will suffer a long-term effect of this loss to the public perception of this loss and fear to re-visit the area. The Insurance Journal Article of August 29, 2012:   “People with reservations in the affected cabins are not being notified before arrival, but they are being warned during check-in to report any sightings of mouse feces. Rangers are handing out information brochures at the park entrance warning people to avoid mice in general and mouse droppings in particular.”

This statement comes as somewhat of a surprise to me that the park would not be notifying people who have reservations about the outbreak and potential danger.  It is reported that many visitors have cancelled their reservations that have become aware of the situation in the park.

However, this loss does not meet the required elements of a covered loss under Business Income or Extra Expense coverage.  Specifically there is no direct damage AND there is a specific exclusion in the Special Cause of Loss form for:  “Nesting or infestation, or discharge or release of waste products or secretions, by insects, birds, rodents or other animals.” CP 10 30 10 00.

The loss of income, in this cause arises from the “bodily injury” (illness and death) as a result of rodent waste products.  Neither Business Income nor Extra Expense will come to pay in this loss.

Financial Loss to the Individual due to cancellation of their registration
The internet is taking advantage of showcasing this incident as to why an individual would need Travel Insurance. As a result of the outbreak Delaware North Cos Parks & Resort’s spokeswoman Lisa Cesaro said : “for us, we’ve had unprecedented cancellations.  There was a 20% cancellation rate on Labor Day weekend that should have been sold out. There is travel insurance and travel cancellation insurance available by many insurance providers.  Needless to say, we have to check the provisions of these policies carefully to make sure that this type of incident would be covered and reimburse the traveler for any costs they incur for cancelling their travel.

Liability Concerns
Now we look to what is going to become a focus in this loss.  Specifically if there is any liability on the part of the park and the specific living quarters that where the infections were contracted. It is reported that the tent cabins were “questionable” mentioning they  were built in 2009, meaning that up until this year people had stayed in them following harsh winters. This was the first season in which people stayed in them after a mild winter.

Jim Patton, curator and professor emeritus of integrative biology for the Museum of Vertebrate Zoology at UC Berkeley, believes the tent cabin conditions at Curry Village had more to do with the spread of the virus than the mouse population or the amount of pathogen circulating among rodents.

Eight of the nine people who contracted the disease in Yosemite slept in the higher-end “signature” tent cabins, on the east side of Curry Village between early June and mid-July. The other victim hiked and camped around the same time in Tuolumne Meadows and the high sierra camps about 15 miles away. http://www.sfgate.com/health/article/Hantavirus-outbreak-puzzles-experts-3888327.php

Read more: http://www.sfgate.com/health/article/Hantavirus-outbreak-puzzles-experts-3888327.php#ixzz27Qc23xGE

So, that leads us to a number of issues regarding liability insurance.  The first is whether or not the Park is vulnerable to any lawsuits for injury or wrongful death.  More and more information is coming to light, but here is what is known at this time:
Approximately 10,000 tourists visited Yosemite National Park this summer and 12,000 in campsites in the surrounding area.  An unknown number of those may have been exposed to the Hantavirus.  It appears that Park employees+ and private concession camp employees may have been aware of the infestation going back to 2010.  Visitors were not notified until the recent deaths made notification a requirement.

Lawyers are still deliberating whether or not there is adequate evidence of negligence to form a class-action lawsuit, but are clearly looking at individual litigation in the known cases of injury and death.

Legal liability?  If it is shown that Park staff knew and did not disclose, absolutely the attorneys are going to argue for negligence.

As a personal aside:  Fear of disclosure and cover up has caused irreparable harm over the years.  The thought that this could be the situation in my beloved Yosemite is personally very disturbing.  I spent every summer while growing up with my family there and believe that there is not a more beautiful place on this earth.

Well, let’s move on to the issue of “occurrence”.  The general liability policy defines this as “an accident, including repeated exposure to substantially the same general harmful conditions.”  So, it is possible that all of the injuries and wrongful death claims will be treated as a single occurrence, thus triggering the typical $1,000,000 limit of liability on the CGL.  If there is a sizeable deductible or self-insured retention on that CGL, the adjusters may argue that each even is its own occurrence (even if the inhalation of the virus took place over days or weeks).  Now is the time that you would like to see to things in the coverage structure:  (1)  If there is a deductible or retention, a policy aggregate to stop the loss to the insured  (2)  An Umbrella policy with really high limits of liability.  At this point, there is no way to determine the number of injured parties, some of whom may not even yet be aware that they have been injured.

That leads us to the next issue, which is the statute of limitations.  In California the statute does not begin until the date of discovery.  That means another two full years, at least, until the suit must be filed to stop the statute from applying.  Since many of the visitors are families, for the children, the statute is tolled until the child reaches its age of majority (18) and then a full two years after that.

Now, the last item is not a good one and that is the Fungus or Bacteria exclusion endorsement.  This liability exclusion doesn’t just confine itself to these two items, regardless of its name.  Now, I am not a scientist, researcher or physician, but I believe that bacteria is not a virus and thus this exclusion does not remove coverage.  But I am not going to bet against claims adjusters taking a really hard-line on this one.  Since the researchers and health officials are quick to point out that not a lot is known about this disease, Note also that some insurers do not use the standard ISO exclusion endorsement, but rather strike out on their own and remove all coverage for any microorganism or known or unknown pathogen.

The last area of discussion are the employees.  We might as well conclude this article on another easy insurance note:  If the employees are infected are they covered?  You bet.  Remember, AOE –COE (Arising out of and in the course of employment).  I think it is of interest that they will all be used as “voluntary” medical screening.  Hopefully, the Park will develop a really thorough disclaimer and release before the volunteers line up.

 

 

Written by:
Laurie Infantino AFIS, CISC, CIC, CRIS, ACSR, CISR
President, Insurance Community Center
and
Marjorie L. Segale, AFIS, CISC, RPLU, CIC, CRIS, ACSR, CISR
Director of Education, Insurance Community Center

 

 

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