Waivers of Subrogation: Are you Really Protected?

It’s common for a construction contract to contain a “waiver of subrogation” provision under “insurance requirements.” Unfortunately, these provisions are widely misunderstood. Although they’re designed to shield owners, contractors and subcontractors against lawsuits by insurers covering project-related claims, the protection offered may not be as extensive as you might think.

Understanding the Concept

Subrogation is a legal concept under which an insurance company that covers a loss gains the right to “step into the shoes” of the insured. The insurer becomes “subrogated to” the rights of the insured, allowing it to sue any third party or parties allegedly responsible for the loss.

Suppose, for example, that an owner hires a contractor to build an office building. During construction, an electrical subcontractor causes a fire that does $3 million in damage to the building. If the owner’s property insurance or builder’s risk policy pays for the loss, the insurance company becomes subrogated to the owner’s rights and may sue the subcontractor for the damage it caused to the building.

Waiving the Provision

The rationale behind waiver of subrogation is that the parties to a construction contract pay substantial premiums to buy insurance to protect themselves against certain risks. If an insurer pays a claim, the argument goes, it should bear the loss and not be permitted to pass it on to another party. Otherwise, insurance companies would rarely pay for anything. Another benefit of waiver of subrogation is that it avoids costly litigation that can result if an insurer goes after one or more parties to the contract.

For these reasons, most standard construction contracts, including the American Institute of Architects form documents, contain waiver of subrogation provisions. Typically, under these provisions, parties waive all rights against each other for damages caused by fire or other perils to the extent such damages are covered by builder’s risk or other property insurance.

Assessing your Protection

Just because your contract contains a waiver of subrogation clause doesn’t necessarily mean that you’re fully protected. The breadth of protection depends on the terms of the parties’ insurance policies and the applicable law in the relevant jurisdiction or jurisdictions.

First, for an insured party’s waiver of subrogation to be effective, its policy must permit the insured to waive the insurer’s subrogation rights.

Many standard property insurance policies authorize waiver of subrogation, but some require an endorsement.

Second, the treatment of subrogation waivers varies from court to court. Some courts, albeit a minority, make a distinction between work and nonwork damages. In other words, the waiver extends only to property that’s part of a contractor’s “work,” as defined in the contract. It doesn’t prohibit subrogated claims related to nonwork property.

So, in our previous example, the waiver of subrogation would apply only to the subcontractor’s electrical work; it wouldn’t prevent the insurance company from bringing a claim for damages to other parts of the building. (The “majority rule,” however, holds that a subrogation waiver bars claims by the insurer for both work and nonwork property.)

Getting the Full Picture

Before signing a construction contract that contains a waiver of subrogation, consult a subrogation lawyer like Stephen Barker today to get a full picture of its level of protection and potential impact on profitability. Call Stephen Barker Law today at 561-910-4340 +15619104340.

Property Damage Litigation Against Utilities – Negligence

Negligence by a utility company may cause extensive damage to your property. If so, the utility company may be held liable. Each state has laws regarding whether or not a utility company can be sued for damages, but most states require the utility to take responsibility and pay for damage caused.

In this article, we will help you understand what legal rights you have if your property is damaged by a utility company.

Types of Damage Caused by Utility Companies

The types of damage caused by utility companies are extensive. For example, a broken water main may cause erosion under your driveway that leads to its collapse. If a car is parked over the eroding spot, it can be heavily damaged.

If a tree-trimming crew isn’t careful, a large branch may fall on a vehicle or building and cause damage. All utility companies have a utility easement on private property. If you park a vehicle on the easement or build on it, then the utility will not be held liable in most cases.

A downed wire can cause a fire. If the wire damage was the result of a storm or other “act of god,” then the utility company will probably not be considered liable. However, if the downed wire was the result of poor maintenance or if it was allowed to remain on the ground too long, the utility might be found liable.

Your Rights When a Utility Company Causes Damage

Most utility companies quickly compensate their customers for damage caused by negligence or accidents. However, if you’re having trouble collecting, you’ve got two options.

The first option should be to contact the state agency that has oversight of public utilities. Contact the office and find out how to file a complaint. Follow through with your complaint and see how it is resolved. In most cases, the utility will agree to pay for damage it caused. Search your state’s .gov website for the agency responsible for public utilities.

If the problem is not resolved, you may have the right to take the utility to court. In most states that allow this, you will have to have a complaint with the state rejected before you can file suit.

Talking with a Litigation Attorney

If a utility company has damaged your property and you have not been compensated, even after going through the proper channels, you might want to speak with a litigation attorney. Find one with experience in utility company issues. Discuss your case with the a subrogation lawyer to determine whether or not a lawsuit is possible and if it is likely to be successful.

If you would like more information or have a utility company that you would like to pursue legal action on, please contact a subrogation lawyer like Stephen Barker Law today at (561) 910-4340 or +15619104340.

Plumbing Damage to Property – Get Help With Subrogation Today!

Damages resulting from water are one of the most common homeowner claims and are often very costly.  High paid claim dollars can result if the leak is not detected early.  Because plumbing is often hidden (running behind walls, in attics and in many instances encased in cement below the floor) water can be running for some time before a loss is discovered.  Most homeowners and business owners do not conduct an inspection of piping, fittings, and hoses and rarely even give much thought to them all until they are ankle deep in water!  Subrogation may exist if faulty plumbing work is the culprit or defective materials can be established but in most instances, the failure and ultimate loss is simply age.

The use of plastic (CPVC) materials has become universal in the plumbing industry mostly due to its low cost.  In addition, plastic is lightweight, easy to work with and does not rust.  However, plastic plumbing parts are frequently made of poor plastic material, are improperly shipped, are poorly manufactured or the part design may be substandard for its intended use.  Imperfect product installation is also a contributing factor to water damage claims.  There have been many instances where pipes are laid in slab work by one worker who is followed by another gluing the line together who unfortunately misses a few joints.  The pipes are then covered by cement and usually maintain their connectivity for a few years, then eventually start moving apart which results in a very costly slab leak.

For a Subrogation Specialist to be successful in pursuing a subrogation claim against the proper party in water damage losses the investigation must include onsite exploration of the plumbing system to determine the failure as to whether there is a  design or manufacturers defect or possibly an installation or maintenance problem.  A plumbing system less than 10 years old should not fail. Hiring the proper expert to conduct an inspection may be somewhat costly but the dollar amount of the paid claim often justifies the expenditure on water damage claims.  That is where we at Stephen Barker Law come in and save you time, energy, and money with a highly experienced professional like Stephen Barker. Contact us today so we can work together and solve your subrogation case at (561) 910-4340 +15619104340.

10 Reasons To Hire An Attorney for Your Subrogation Case

Small Business Lawyer

If you have been injured in an accident, it is in your best interest to hire a subrogation attorney to get you the reimbursement you deserve. If the accident was the result of another person’s negligence, then you are entitled to compensation from the at-fault party. But, getting that compensation can be tricky, and you need to have someone working for you who knows the ins and outs of subrogation law. There are several reasons why you should hire a subrogation attorney, some of them include:

1. Objectivity

When you have been involved in an accident, your judgment is likely to be clouded, and you aren’t going to be overly objective. An attorney has no personal stake in the case, so they are going to be objective and be able to make the best decisions on your behalf and ensure that you are compensated for your injuries.

2. Experience

A subrogation injury attorney has experience with these types of cases. You won’t have to worry about doing a lot of research, because a lot of it has been done in past cases. Your lawyer will know what to do every step of the way until your case is settled.

3. Red Tape

As a layperson, you likely don’t know about subrogation law, or how to get through all of the red tape that insurance companies like to put up. You don’t have to worry about learning a lot of confusing legal and medical jargon, and your attorney can deal with all of the paperwork and other red tape.

4. Save Time

Getting a hold of the medical records, reviewing police files and medical charts, communicating with insurance companies, etc. takes a lot of time. Most people have to work, raise families, etc., and they don’t have time to do everything on their honey do list. But, this is exactly what a subrogation attorney is there for; to save time, and get you more money.

5. Investigators

Most subrogation attorneys work with a team of investors. This team will examine every detail of the case, do re-enactments, interview witnesses, etc. to make sure that you get the best settlement possible.

6. Work with other Lawyers

The other party or parties involved in your case will have their own attorneys. Your lawyer has the experience to work with them directly, and in many cases, they know each other to begin with. This makes a lot of the process easier, especially the fact-finding part where all parties involved exchange documents and facts.

7. Jury Trials

If you do end up in the courtroom, a subrogation attorney will make sure that you are represented and that you receive a favorable jury verdict. They will ensure that you get the compensation that you are entitled to, which will cover medical costs, other legal costs, missed time from work, and future expenses related to your injury.

8. No Fees

If you do not win your case, you will not have to pay any legal fees. Most subrogation attorneys charge a contingency fee. This means that you are not responsible for attorney fees. But, you may still be responsible for certain services provided by your attorney, such as doctors’ fees for reviewing medical records.

9. Alternatives

Not all subrogation cases end up in the courtroom. Your lawyer will offer suggestions for other types of resolutions that are easier, faster, and less expensive. Resolutions can include arbitration, mediation, or a trial.

10. Settlements

A lawyer can negotiate a settlement rather than have the case go to trial. This means that you give up your right to sue, and receive payment instead. Your lawyer can ensure that you get the best settlement possible.

 

With these 10 reasons to hire a subrogation attorney, you can save time, energy, and money by investing in an attorney that will work for you. It would be in your best interest to hire Stephen Barker Law for your subrogation needs. If you are in the middle of a subrogation case or want to know more about your options with a professional lawyer in Southern Florida, please reach out to Stephen Barker Law today 561-910-4340 !

Medical Liens in a Personal Injury Case

Many people are surprised to learn that in certain situations, the state and federal government, health insurance companies and hospitals can assert a claim against your personal injury settlement. When you have been the victim of an accident and have filed a personal injury lawsuit to recover the cost of medical bills, the people who paid for these medical costs may be able to file a medical lien against your settlement proceeds. A lien is a demand for repayment that may be placed against your personal injury case.

Your health insurance provider may also issue a lien to recover any money it spends on your personal injury accident treatment. You may be required to pay back these medical expenses. This is a process known as subrogation, whereby insurance providers can seek repayment from your settlement. The extent and strength of the subrogation claim depends upon the language used in the policy. Some states strictly prohibit an insurance company from placing a subrogation clause into a health insurance policy, so you should check the laws in your state.

Medical Provider and Hospital Liens

In certain states, hospitals are entitled to file a lien for repayment of any monies spent on treating or caring for someone injured in an accident. Some medical providers may ask you to sign a lien letter, stating that you submit to a lien against your settlement to pay for services. Medical provider liens must follow a strict protocol in order to be valid. The hospital must follow the requirements of the Hospital lien statutes. Some of those requirements include:

  • The lien must be filed in the recorder’s office of the county where the hospital is located within 180 days after you are released from the hospital.
  • The lien must have your proper name, your proper address, the name an address of the hospital, and the dates of service.

If the hospital does not comply with the statutes, their lien is not enforceable. This does not mean you are not responsible for the bill. It only means that the hospital does not have a lien against your settlement. If the hospital has an opportunity to bill your health insurance, then it must do so and it cannot file a lien for the balance of the bill.

Worker’s Compensation Liens for Work Related Accidents

If you are injured in a work-related accident, a worker’s compensation lien may be issued if your medical bills or lost wages have been paid through your state’s workers’ comp fund. This lien amount is typically whatever worker’s compensation has paid for your case. Worker’s compensation laws vary significantly between states; therefore it’s important to check if the carrier can assert a workers comp lien on your personal injury settlement.

Government Liens for Unpaid Medicare and Medicaid

The general rule is that if the government paid for any portion of your medical care, they have a right to get paid back if you later recover money for your injuries from another party. Depending on the specific type of government program, some government agencies, (Medicare and Medicaid Liens, Veteran’s Administration) have different rights when it comes to placing a lien against your settlement. Some have the right to recover a portion of the proceeds from your personal injury lawsuit.

Negotiating and Releasing a Lien

It’s entirely possible to get the lien holder to accept less than the amount they paid. Your attorney may be able to get the claim reduced from the medical providers who hold a lien against your case. Under the “fund doctrine”, attorneys who create a “fund” for the benefit of a third-party are entitled for reimbursement from the fund in the form of attorney’s fees.

Worker’s compensation carriers are aware that a lien may be so large that is creates a disincentive to litigate. If the lien exceeds the total amount a plaintiff is likely to receive from a lawsuit, the plaintiff may choose not to sue. The plaintiff’s attorney can negotiate with the carrier in order to resolve the lien for substantially less that the face value of their claim.

Notify Your Lawyer

If an entity requests reimbursement, it’s important to ascertain what language in the insurance policy or public statute gives them the right to demand this. Lien law is extremely complicated and an experienced attorney may find ways to reduce or even eliminate the lien.

U.S. Supreme Court Decision Limits ERISA Plans’ Subrogation Rights

On January 20, 2016, the United States Supreme Court issued a significant decision that makes it more difficult for employee benefit plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) to obtain reimbursements of payments made to plan participants who have subsequently received third-party settlements. The decision is Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, __ U.S.__, 136 S. Ct. 651, 84 USLW 4046 (Montanile). In Montanile, the issue presented to the Supreme Court for its review was whether an ERISA plan has authority under the statute to place a lien on a plan participant’s general assets once that person has obtained funds from the settlement of a legal action with a third party and then dissipated the settlement funds.

The Supreme Court held in an 8-1 decision that an ERISA plan fiduciary may not seek reimbursement out of the third-party settlement a plan participant has received in circumstances where the participant has spent the settlement funds. Writing the opinion for the majority (Justice Ruth Bader Ginsburg issued a dissenting opinion), Justice Clarence Thomas found that ERISA provision Section 502(a)(3), which authorizes a fiduciary to bring a suit for equitable relief to enforce the terms of the plan, precludes such a suit for reimbursement where the plan fiduciary is seeking to attach the participant’s separate assets that are not traceable to the settlement funds.

As will be discussed below, Montanile involved an employee health benefit plan. Justice Thomas did not address whether the court’s ruling applies more broadly to other types of ERISA plans, such as pension or disability plans, that may seek to recoup benefits that could have been paid to participants over many years or even decades. Given the length of time during which such pension or disability payments may have occurred, it is even more likely that the payment recipients will have spent the payments they had received.

Overview of Montanile Decision

This case arose from the medical expenses Robert Montanile incurred as a result of injuries he suffered when a drunk driver ran through a stop sign and crashed into his vehicle. Montanile was a participant in the National Elevator Industry Health Plan. The plan paid in excess of $120,000 for medical care Montanile required as a result of his injuries from the car accident. However, the plan’s provisions enable it to demand reimbursement when a participant recovers money from a third party for medical expenses. Indeed, Montanile did file a negligence claim against the drunk driver and obtained a $500,000 settlement. He netted $240,000 after paying attorney’s fees and repaying an advance from his attorneys.

The plan’s Board of Trustees sought reimbursement of the medical expenses the plan paid to Montanile, but his attorney argued that the plan was not entitled to any recovery. The parties entered into negotiations over reimbursement but never reached an agreement. Thereafter, Montanile’s attorney informed the board that he would distribute the remaining settlement funds unless the board objected within 14 days. After the board did not object within that timeframe, Montanile’s attorney paid him the remainder of the funds from the settlement.

Six months later, the plan filed suit against Montanile in the United States District Court for the Southern District of Florida under ERISA Section 502(a)(3) seeking reimbursement of the amount it expended on his medical care. The plan sought to enforce an equitable lien against any settlement funds, as well as any funds that were in Montanile’s actual or constructive possession. Montanile argued that he had spent almost all of the settlement funds and that there were no specific, identifiable funds separate from his general assets against which the equitable lien could be enforced. The district court rejected that argument and held that even if Montanile had dissipated some or all of the settlement funds, the board was entitled to reimbursement from Montanile’s general assets. The United States Court of Appeals for the Eleventh Circuit affirmed the district court’s decision. The court of appeals held that the equitable lien was enforceable, notwithstanding dissipation of the specific fund to which the lien attached. The court of appeals determined that a plan can recover out of a participant’s general assets when the participant dissipates the specifically identified fund.

Courts of appeals in only two circuits have adopted the position that ERISA plans cannot seek reimbursement of general assets under Section 502(a)(3) from participants unless they can trace their claims to specific funds in the participant’s possession. The Eleventh Circuit’s decision followed the majority position taken by courts of appeals in other circuits permitting an ERISA plan to enforce an equitable lien against a defendant’s general assets without having to satisfy a tracing requirement.

The Supreme Court’s decision in Montanile upholds the minority position. One point Justice Thomas made in his opinion was that a plan can only seek equitable relief under Section 502(a)(3), whereas ERISA contains other civil action provisions, such as Section 502(a)(1)(B), that more broadly allow plan participants and beneficiaries to enforce their rights under the plan that does not limit them to equitable relief. He further explained that equitable remedies enforce a right against a particular thing, rather than a right to recover money generally out of a defendant’s general assets. In addition, Justice Thomas found that an equitable lien could ordinarily be enforced against specifically identifiable funds that remain in the defendant’s possession or against traceable items that the defendant purchased with the funds, such as a car. However, he indicated that expenditure of the entire identifiable fund on non traceable items (like food or travel) destroys an equitable lien. Justice Thomas then concluded that the board could not enforce its equitable lien against Montanile’s general assets.

Conclusion

The decision in Montanile puts responsibility on health benefit plan fiduciaries to have in place processes to ensure that they seek reimbursement for medical expenses that they have paid to plan participants and beneficiaries promptly after those individuals have recovered those medical expenses from third parties in legal proceedings. It is especially important that these processes include a system for investigating and tracking expensive claims.

By commencing reimbursement actions promptly, the likelihood that third-party settlement funds will be wholly dissipated will be diminished. Nevertheless, as some settlements (especially settlement amounts) are reached in secrecy with nondisclosure agreements, it may be difficult for plans to gain sufficient information to trigger a prompt reimbursement effort. Furthermore, if lower courts interpret Montanile to apply to other types of ERISA plans, it may not be practicable for plans to quickly seek reimbursement before dissipation of pension or disability disbursements that were perhaps paid years earlier.

If you have a subrogation case and want the very best South Florida has to offer, look no further than Stephen Barker Law! We work with the best attorney’s to bring you the compensation you deserve. Reach out to us for a quote today and a more lucrative tomorrow!

 

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Subrogation – You Get What You Put Into It

In daily life it is normal to hold liable a person who causes you damage. Yet some insurers forgo this recourse all too easily. Opportunities for subrogation exist even in seemingly hopeless cases such as natural catastrophes, provided the proper provisions have been made.

If an insurer has covered a loss, it has a right of recourse against responsible third parties. The purpose of this rule is to avoid the injured party being compensated twice for the loss (by both the insurer and the party that caused the damage). In addition, it prevents the at-fault party from benefiting from the fact that the injured party has insurance that covers the loss. Subrogation thus ensures that the indemnity insurer does not unwittingly also become a liability insurer for the party responsible for the damage.

Not every natural catastrophe is an act of God

The fact that subrogation is a ubiquitous issue, appearing even in the most unlikely of contexts, is exemplified by the California wildfires that caused over US$ 1.5bn in damage in San Diego in 2007. Whereas some insurers assumed that the long drought leading up to the fires had been exclusively to blame, others retained counsel to investigate possible avenues of recourse. The investigation found that the fires had not in fact been pure acts of God but were caused, among other things, by sparks from poorly maintained power lines. With the aid of legal counsel, significant amounts were recovered by subrogation.

Another case revolved around water damage to a school in Arizona caused by a flash flood. During an investigation, it was determined that the school had been built on a site onto which surface water was channelled after heavy rainfall. A diversion gully had been built for this reason, but it was evidently not big enough to contain such large volumes of water. The case went to court, and the contractor responsible was held liable for 90% of the loss.

Establishing the injuring party is key

These two examples show that subrogation issues should even be considered in the area of nat cat damage. The benefits of subrogation are more evident for man-made losses but, even here, insurers face certain pitfalls. Firstly, the question of the at-fault party should be investigated as a matter of routine.

If this party can be established, the next step is to examine whether culpable conduct can be proven and consider the chances of actually recovering the loss. It may involve a sole trader – or a multinational conglomerate with revenues in the billions. Sometimes several parties are involved and are jointly and severally liable. This avoids the risk of winding up in hopeless legal battles that last for years and entail fees that are out of all proportion to the subrogated claims. This is an especially great risk given that the party responsible need not necessarily disclose if and to what extent it has liability insurance or sufficient other financial means.

Difficult conflict-of-interest issues

Even if it is clear that the injuring party has sufficient insurance cover or financial strength, it may not always be beneficial to pursue the recourse. This is the case if a multi-line insurer offers property and third-party liability (TPL) covers and both lines are affected by the same insured event, but for different policyholders. This situation could potentially lead to a conflict of interest. For example, if the injuring party’s liability policy provides significantly more cover than the share of the claim to be paid by the insurer, subrogating the claim would be disadvantageous.

This simple arithmetic approach becomes problematic, however, if the insurer is part of a market in which the other insurers are not faced with the same dilemma. The lead carrier is required to (co)represent the interests of the entire market and thus subrogate even when this would be against its own interests. It is thus better not to let such situations come into being in the first place. All insurers must take the relevant compliance measures to create ethical walls to ensure that information about indemnity limits in the property and TPL lines remain confidential below a certain management level. If doubts arise on the market about whether a company handles such conflicts of interest in an ethical manner, its participation in future insurance programmes is sure to be affected. Demonstrating transparency vis-à-vis one’s co-insurers is therefore recommended in such situations, as is the appropriate resolution of the conflict of interest.

Such conflicts can be resolved, for example, by the insurer’s taking a more observational role within the panel. But unilaterally waiving all recourse is not the answer in many cases. Indeed, the insurer will often even harm itself if it does not subrogate, since the co-insurers who are not in conflict will certainly want to take recourse and, if successful, will pocket the reluctant company’s share for themselves.

In daily life it is normal to hold liable a person who causes you damage. Yet some insurers forgo this recourse all too easily. Opportunities for subrogation exist even in seemingly hopeless cases such as natural catastrophes, provided the proper provisions have been made.

Sometimes certain exclusions are acceptable

Interests of another kind can conflict if the at-fault party is closely associated with the policyholder. This party might be a subsidiary or an official agency that the policyholder depends on for certain permits. Or it might be a key supplier, which then revokes the policyholder’s status as a prime client, thus jeopardising the policyholder’s supply chain. Since subrogation is optional, it can be contractually waived at any time.

Indeed, insurance policies often contain a partial exclusion of recourse. These exclusions are accepted by insurers because, as partners in risk, they are not blind to their customers’ business interests. However, waivers of subrogation require that the scope of eligible parties be clearly defined in the exclusion clause. Universal waivers and clauses conditioned exclusively on the policyholder’s consent are not recommended.

Yet even in such cases, opportunities for recourse are not completely lost, provided the policyholder still has an own interest in holding the perpetrator responsible. This may be the case if the relationship with a supplier is ruined or the policyholder would be putting its reputation at risk if it continued to work with the supplier. Other situations are also conceivable, such as if the policyholder has to pay a high deductible or the loss exceeds the acceptance limit. In such cases, the insurer and policyholder can agree to drop the exclusion of subrogation at any time.

Ideally, the parties would do this with the help of a specialist law firm which they have chosen together, and in the context of a subrogation agreement in which they set out their binding rights and obligations and all other important aspects of their common objective. This includes the sharing of litigation costs and a precise description of how any recovered proceeds are to be distributed. Stock phrases such as “pro rata” or “proportionally” are often not specific enough in this regard, since the basis for performing this proportional distribution needs to be clear. This is particularly relevant where there is a high level of uncovered damage, either due to deductibles, acceptance limits being exceeded, or losses not being insured at all. Indeed, the greater the amount of such damage, the lower the insurer’s share of the gross total loss and, accordingly, the lower its share if the recourse is successful.

Wording such as that found in the model clause of Munich Re’s Industrial All Risks Policy can provide the necessary clarity, even in the context of an agreement made after the loss has occurred. In addition, the contract needs to stipulate in whose name a potential suit against the injuring party would be filed and who would take the final decisions in settlement negotiations – whether in or out of court. One can also stipulate that policyholders cede all their recourse rights. This means that they will not appear as parties and their names will not be included in the proceedings.

If the parties can agree on these key points early on, they can create a greater sense of trust and cooperation and avoid potential conflicts further along in the proceedings. The insurer and policyholder can thus also work more purposefully towards developing a common strategy to prevail against the injuring party. After all, proving guilt is not often easy – it takes time and resources.

Systematic review of subrogation options

In certain lines of business in which subrogation issues often arise, such as motor or health insurance, insurers will typically have a department or a number of specially-trained staff whose job it is to routinely investigate recourse options. However, in property and especially industrial insurance, such systematic investigation is not yet standard. Insurers who baulk at the high costs and effort involved in subrogation, despite the great potential, should consider the possibility of cooperating with an external law firm. This works best on the basis of a framework agreement with a specialist subrogation firm which would review possible claims against third parties as early as possible – ideally as soon as the loss is reported. If this review is delayed until the later stages of the overall claims process, the chances of proving culpability are typically much smaller. It is better to secure evidence early on, using photographs or expert opinions, and to interview witnesses before their memories fade.

Keeping an eye on costs

Framework agreements should stipulate the parties’ rights and obligations, and how costs and proceeds are to be divided. They also include the key processes, thus enabling the tasks outsourced to the lawyers to be integrated as seamlessly as possible into the insurer’s claims procedure. The agreement should also set out, at key junctures, who must inform whom about what, when, and in what form, and stipulate the loss amounts beyond which the law firm’s assistance will be called upon. If the parties can agree on fees that depend on the amount of indemnification (contingency fees), the financial risk to the insurer is kept to a minimum. If performance-related fees are legally not an option – which is the case in much of Europe – the insurer can provide the firm with a set budget per case to initially assess possible avenues of subrogation. Further steps would then be considered only where there were realistic chances of recovery.

It is clear that insurers who are aware of these issues and who have set up structures to deal with them increase their chances of recovering damages. It certainly does not make good business sense for an insurer to flatly reject all claims it assumes have little prospect of success. Smaller insurers in particular quickly reach the limits of their capacity in this regard. Specialist firms and reinsurers such as Munich Re can provide valuable services thanks to their vast experience. They have built up the necessary networks and have the long-term stability required to weather disputes that could go on for years.

Munich Re has drawn up a best-practice clause in its Industrial All Risks Policy that aims to equitably reconcile the various interests in subrogation proceedings. The clause addresses two decisive questions: firstly, who are the main stakeholders and, secondly, how are the costs divided? It stipulates that the insurer will initially advance the costs of the litigation. If the suit is successful, these advance payments are then reimbursed before the sum paid by the injuring party is split on the basis of a considered and clearly defined system: a win-win situation that creates value for both sides. In conclusion, anyone who still has doubts about whether it pays to thoroughly consider subrogation might reflect on a final, simple piece of arithmetic: successful subrogation always constitutes a risk-free net gain. In somewhat simplified terms, this means that successfully recovering €100,000 through subrogation is equivalent to writing a premium (given a 95% combined ratio) of €9.5m.

Subrogation Tactics Involving Heavy Equipment Fires

Heavy equipment fires occur frequently and can lead to substantial losses. The loss of the equipment itself is often compounded by the insured’s loss of use of the equipment.  For businesses that rely extensively on heavy equipment (e.g., agricultural and construction businesses), the loss of use/business interruption claim arising from such a fire can be staggering.

Heavy equipment is often used in undeveloped areas not readily accessible to fire departments. As a result, the equipment is often badly damaged by the fire, creating challenges to identifying the point of origin. Subrogation recovery for such fire will hinge on proper investigation immediately after the loss occurs. The following are some tips to guide a subrogating carrier’s investigation in heavy equipment fires.

In analyzing a heavy equipment fire case, it is important to gather data and evaluate the maintenance history of the equipment. Lack of maintenance of hoses carrying hydraulic fluid can be problematic, as these rubber hoses become brittle and prone to cracking over time, creating the potential for the failed hose to discharge pressurized, flammable hydraulic fluid onto hot parts of the equipment’s motor or exhaust system, resulting in a fire. Thus, one of the first steps in evaluating the recovery potential of a heavy equipment fire claim is to determine whether the equipment was properly maintained. A diligent insured will keep log books recording each instance of maintenance to the equipment. The carrier should request such maintenance records from the insured at the outset of such a claim, as those records can substantially inform the subsequent investigation.

Additionally, some heavy equipment fires may occur at job sites where there is already a fire in progress. In a land clearing project, for instance, there is usually a pile of cleared wood and vegetation being burned. This creates a significant potential for the equipment operator to move the equipment too close to the burn pile, causing combustible components of the equipment to ignite. On many pieces of equipment, the cold air intake is located at the rear of the machine, behind the operator. We have investigated several fires wherein the operator, looking forward, did not realize that the rear of the machine was perilously close to a burning debris pile, and a smoldering ember is sucked into the machine’s cold air intake, causing a fire in the engine compartment. This potential fire cause makes it crucial that the subrogating carrier establish the pre-fire location and movements of the equipment as soon as possible following a loss. The carrier should make every effort to obtain this information directly from the operator of the equipment and other individuals who were actually present when the fire occurred; obtaining the information from a foreman or company representative who was not present at the time of the loss is not a substitute for first-hand statements.
Finally, the carrier should be aware that not all fire investigators and engineers are created equal for purposes of investigating a heavy equipment fire. If possible, the subrogating carrier should retain a fire investigator familiar with heavy equipment fires and a mechanical or electrical engineer who specializes in heavy equipment, as non-specialist fire investigators and engineers may not be able to quickly and accurately identify all potential ignition sources on the relevant equipment.

Having learned the ropes of subrogation in terms of heavy equipment fires, it is best to work with a lawyer that specializes in subrogation like Stephen Barker. His expertise and knowledge of assisting clients through subrogation claims will help you get what you deserve from insurance companies and insure that you are not left in the ashes from fires.

How To Choose The Best Subrogation Lawyer in South Florida

Subrogation is a legal procedure that lets an insurance company make a claim against a third party, to recover benefits that the insurer paid to its insured. The purpose of a subrogation claim is to force the person or company that was at fault for an accident to reimburse the insurance companies that paid insurance benefits as a result of that accident.

Why Do Injured Persons Need To Know About Subrogation Law? 

In every health insurance policy there is a subrogation clause. This is true whether you have a private insurance carrier, Medicare, or Medi-Cal.  Although there is a lot of fine print that is easy to look over in Insurance contracts, the subrogation clause is a part of your health insurance. When you are injured as a result of someone else’s negligence, and you will likely obtain medical treatment for injuries sustained, such as in an automobile accident. In Florida there is currently a requirement that all drivers carry personal injury protection insurance coverage or PIP, also known as no-fault. In theory your no-fault insurance is supposed to pay for your medical care following an automobile accident. This protection however is normally limited to $10,000.00 and will  only cover 80% of your medical bills. There is also a chance that your own insurance company may cut off your PIP benefits and stop paying your medical bills after you are examined by one of their doctors in what they call an independent medical exam or IME. No fault benefits are not subject to subrogation, and as such payments made to medical providers through PIP do not have to be reimbursed.

Why Do I Need A Subrogation Lawyer?

In life, there is no such thing as control. Life may go your way most of the time, but odds are that you will have to deal with being the victim of negligence at some point in your life. When it happens, you’ll need to consult a lawyer who deals with personal injury. You may be entitled to compensation for injuries caused by the negligence of others.  So the question is: “How do you find the best personal injury lawyer for you?”. That’s where we can come in and help guide you in finding the best Subrogation Lawyer for you in South Florida. We hope you choose to work with us at Stephen Barker Law, but it is always best to explore your options. Here are some guidelines for how to pick the lawyer that is right for you:

Time is of the Essence:
There is no time to waste after an accident. There are time limitations known as the statute of limitations, and they vary of different types of cases. If you are seriously injured after the accident then you’ll  need to rely on close friends or family members, or family physician to recommend a lawyer they know and trust. It will protect your rights if you retain a lawyer very soon after the accident, so that your lawyer may begin his or her own investigation, preserve evidence, and advise you on your rights.

Google is Your Friend:
Any lawyer that is worth your time has a website and to provide you more  information about the lawyer and their practice.  Ideally you can learn about the education and experience of a lawyer from their website.  One of the cons of using a lawyer’s website as an informational resource about their own services is that it was likely written by the lawyers themselves and any opinions may be biased in favor of selecting their firm. A good way to verify other people’s experiences is to check a ratings website like martindale hubbel, lawyers.com, Avvo, Superlawyers, or the Better Business Bureau so you can get a realistic view as the client of what to expect from your attorney.

What Type of Injury Do You Have:
Just like there are many different types of injuries, there are lawyers with different expertises of injury. It is wise to select a lawyer who devotes their practice to the type of injury you have sustained so that you can be assured that they have experience in similar cases. There are many types of accidents such as car accidents, slip and falls, dog bites, drunk driving accidents, medical malpractice, etc.

Bills, Bills, Bills:
When hiring a lawyer for an accident or injury case, most lawyers work on a contingency fee basis, only taking their fee as a percentage of any recovery they obtain. Some attorneys will even go as far as to provide a No Recovery, No Fee Promise to all clients which ensures that you’ll receive the most dedicated service they can provide. Some lawyers will even reduce their fee if at the end of the case the attorneys fee is greater than that which the client would receive. You should ask your lawyer if they will ever reduce their fees.

Lawyer’s Experience Pays Off:
Education meana nothing if the lawyer does not have the proper experience to make the magic happen. When it comes to legal matters and there is no doubt that you should go for the knowledgeable lawyer who has experience handling similar cases in the South Florida Area. Stephen Barker is definitely a lawyer with years of experience and expertise to guide you through your subrogation case in South Florida.

Be Frank with your Lawyer:

You have to be completely honest with your lawyer so that they can use that information to file your claim. They will talk to you about what can be done, and they will speak to you about what that information means. You might have to pick out the information for them if they are hoping for you to help them, and you have to be organized so that they can get the case right the first time no matter how complex or simple the case is.

You can talk to Stephen Barker today who will step in and make sure that you have the representation that you deserve. You will have the case handled by someone who knows what they are doing, and there are many people who did not know that they could sue because they thought they were stuck when they got in a dispute with the insurance company. There are a number of people who will go through this process with their lawyer so that they can have their claims paid and honored by the insurance company in question.

With these guidelines, we wish you the best in your search for the best Subrogation Lawyer for you. If you think Stephen Barker is a great fit for you, we are have the dedication and devotion to reach your goals and protect you in the murky waters of subrogation law! Contact us for more information today and let’s get you the compensation you deserve!

Liability Contracts and Policies With Contract Workers

Subrogation law, with Insurance, is constantly being used. It is part of nearly every insurance contract. The courts are loaded with lawsuits involving the negligence of a third party and subrogation claims. This is why, as an injured party, you must seek out a subrogation lawyer. Insurance subrogation is a much more difficult and complicated process. Again in the simplest terms, if you are involved in an accident and there are medical bills or damage to your property. Your insurance company will see to it that the bills are paid. After making the payments or sometime before, your insurance company will try to determine more details about the injuries or damages that occurred.

For example, imagine a painting contractor fell off his ladder while they were on the job. However, when the painter fell, he toppled on top of another contractor’s employee on the job site. This other contractor’s employee  suffers injuries from the collision, and the injured worker sues the Painting contractor as well as project owner. The project’s contract included a requirement that the contractor assume the owner’s liability for any accidents that may result from the contractor’s work. As a result of this, the contractor’s general liability insurance company pays the injured worker for both the owner and contractor’s portions of the damages incurred. After evaluation from the Insurance company, they were able to determine that the owner was actually twenty percent responsible for the accident. The insurance in turn files a claim with the owner to request a return on a portion of the initial payment made.

Although this may seem unfair, this is a completely legal and normal instance of subrogation with Insurance companies. To avoid this scenario, many project owners and general contractors require that their subcontractors agree to a waiver of subrogation. Subrogation ultimately holds the person who should pay for the damage responsible, and will protect the company from being liable for unexpected expenses.

To save money and ultimately not be held responsible when the unexpected occurs, owners and general contractors often transfer their liability to subcontractors. This is why most contracts include a waiver of subrogation agreement. These contracts in turn have the subcontractor promise not to pursue legal action and request payment from the other party in case of an accident. That agreement often links with the subcontractor’s insurance company, depending on the type of policy and its terms.

Types of Liability Contracts and Policies

1.  Commercial General Liability Policy:

Traditionally, a commercial general liability policy prevents the policyholder from being able to adjust the insurance company’s rights after the accident occured. This only applies when a waiver of subrogation was signed and agreed to before a loss holds the company responsible for recovery. The subrogation policy often times protects the other party if in the agreement it lists the person as an additional insured. Under common law, an insurance company may not subrogate against its own insured. To remove any doubt, one should should ask the company involved to add an amendment applying a waiver of subrogation to the person or organization named in the initial contract. Insurance companies vary on the amount of premium they charge for this. Insurance companies sometimes make no charges at all.

2. Standard Business Auto Insurance Policy:

The standard business auto insurance policy has many similarities to the general liability policy. One major difference is that unlike General Liability insurance, there is no standard waiver of subrogation endorsement for auto insurance. Some insurance companies may offer their own versions of such an endorsement. Again, premium charges will vary.

3. Worker’s Compensation Policies:

Workers’ compensation policies require an endorsement whenever a waiver of subrogation is desired. This endorsement may apply on a blanket basis to all parties with whom the insured has written contracts requiring waivers. It also can apply only to the party listed on its schedule. The insurance company may charge up to two percent of the policy premium for blanket coverage or two to five percent of the project’s premium for individual coverage.

4. Commercial Property and Inland Marine Insurance Policies:

These types of policies vary as to whether they permit waivers of subrogation even before a loss. This type of coverage is imperative if you plan to transport high-value products or materials, which are often excluded from basic property coverage.

When working with a contractor, it is wise to have a contractor or building tenant who is required by contract to check the relevant insurance policies and waiver before agreeing to working together. This is when it is wise to have a lawyer such as Stephen Barker to work with you to complete the best waiver for you and your contractor that protects you for incidental charges and recoveries. Accidents happen, and it is best to protect yourself from the unexpected and to ensure that the proper coverage is in place. Call Stephen Barker Law today to create the best waiver for you and your contractor!