Policyholder's Duty to Cooperate: Advocating or Defending Against - PowerPoint PPT Presentation

Presenting a live 90-minute webinar with interactive Q&A Policyholder's Duty to Cooperate: Advocating or Defending Against Loss of Coverage for Breach Navigating Scope of the Duty, Privilege Issues, Settlement, and Consequences of Insured's Failure to Cooperate WEDNESDAY, APRIL 23, 2014 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: R. Brent Cooper, Shareholder, Cooper & Scully , Dallas Michael W. McCoy, Partner, Fowler Rodriguez , Houston The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .

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POLICYHOLDER’S DUTY TO COOPERATE: DOES IT HAVE LIMITS AND WHAT IS THE EFFECT? by Michael W. McCoy Fowler Rodriguez

Michael W. McCoy Partner Fowler Rodriguez Four Houston Center 1331 Lamar Street, Suite 1560 Houston, Texas 77010 Telephone: (713) 654-1560 Direct Dial: (713) 654-3308 Fax: (713) 654-7930 Mobile: (713) 253-8299 E-Mail: mwm@frfirm.com 6

Mr. McCoy has expertise in insurance coverage and related matters. During his over 30 year career, he has been involved in complicated and sophisticated insurance coverage disputes involving multi parties, multi lines of insurance, reinsurance, retail and wholesale insurance brokers, managing general agencies, and various syndicates from the overseas market. Mr. McCoy has been involved in insurance coverage litigation involving almost every type of insurance policy imaginable, in both first and third party insurance cases, and in respect to both primary and excess insurance. Additionally, he has represented insurance brokers in almost every type of dispute over the brokering and producing of insurance policies, has represented other professionals in liability and malpractice actions, including lawyers, and has defended numerous insurance carriers and third party claims administrators in "bad faith" and extra-contractual litigation, and has been involved in countless general insurance defense matters ranging in scope from premises liability to sophisticated machinery products cases. Mr. McCoy writes and lectures frequently in the insurance coverage, insurance "bad faith" and insurance broker errors and omissions area, is active as an affiliate member of Independent Insurance Agents and Brokers Organization, and additionally serves as an expert witness with respect to coverage, and insurance broker errors and omissions. Further, Mr. McCoy is also actively involved in employment litigation on behalf of employers, and is active as an affiliate member in certain HR organizations. 7

Born Houston, Texas, October 12, 1955. Admitted to Texas Bar, 1979. Also admitted to practice before U.S. Court of Appeals, Fifth Circuit; U.S. District Court, Northern, Eastern, Southern and Western Districts of Texas. Preparatory education, University of Texas (B.A., with high honors, 1976); legal education, Baylor University (J.D., 1979); Fraternity: Phi Delta Phi. Associate Editor, Baylor Law Review, 1977-1979. Member: State Bar of Texas; American Bar Association; Houston Bar Association; Texas Association of Defense Counsel; Defense Research Institute; Texas Bar Foundation. Lecturer and Author: Representing an Insurance Company at Trial and Overcoming Jury Bias ; State Bar of Texas Lecture Series: Spring, 1993; Summer, 1993; Spring, 1994; and Summer, 1994. Lecturer: Insurance Concerns ; Houston Claims Association; 1992 and 1993. Lecturer: Conducting Depositions; Houston Association of Independent Insurance Agents; 1994 and 2000. Lecturer: Disputes Among Insurance Carriers ; University of Houston Law Center and Advanced Personal Injury Seminar or Advanced Insurance Seminar: Summer, 1996; Summer, 1997; Summer, 1998; Summer, 1999; Summer, 2000 and Spring, 2001. Lecturer and Author: Appraisal and Arbitration ; Texas Insurance Law Symposium at South Texas Law School; Fall, 1997. Lecturer and Author: Overview of Agents' and Brokers' Errors and Omissions Liability ; Houston Association of Independent Insurance Agents; Summer, 1998 and Fall, 1998; Texas Insurance Law Symposium; Summer, 1998 and 1999. Lecturer: Recent Trends in Employment Law ; Association of Hospital Human Resource Managers, 1998. Director and Participant. Mock Trials: Houston Association of Independent Insurance Agents, 1994 and 1997; Tarrant County Association of Independent Insurance Agents, 1994; Houston Claims Association, 1994; Association of Human Resource Managers, 1996 and 1998. AV Rated by Martindale-Hubbell Law Directory. Texas Super Lawyer in 2006, 2007, as named by Texas Monthly Magazine in insurance coverage area; Top Lawyer as named by H Magazine, 2008, 2009. 8

Practices: • Insurance Law • Litigation Awards: • AV Rated by Martindale- Hubbell Law Directory • Texas Super Lawyer in insurance coverage area, 2006-2007 Bars & Courts: • Texas Bar, 1979 • U.S. 
 Court 
 of 
 Appeals, 
 Fifth 
 Circuit, 
 Eleventh 
 Circuit • U.S. 
 District 
 Court Northern, 
 Eastern, 
 Southern 
 and 
 Western 
 Districts 
 of 
 Texas Education: • B.A., 
 with 
 high 
 honors, 
 University 
 of 
 Texas, 
 1976 • J.D., 
 Baylor 
 University, 
 1979, 
 Baylor 
 Law 
 Review Professional Associations: • American Bar Association • Houston Bar Association • Texas 
 Association 
 of 
 Defense 
 Counsel • Defense Research Institute • Texas Bar Foundation 9

POLICYHOLDER’ S DUTY TO COOPERATE: DOES IT HAVE LIMITS AND WHAT IS THE EFFECT? I. DUTY OF THE INSURE R TO DEFEND AN D RIGHT TO CONTROL THE DEFENSE A. General Provisions 1. Duty to defend of the insurer is built in to the boilerplate insuring agreement in most policies. 2. Question arises with respect to right to control the defense. 3. Most policies do provide insurer the rig ht to control the defense. 4. Exceptions: a. Conflict between the insurer and the insured; b. Nature of conflict and requirements with respect to same; c. Different interpretation in different states. 5. T ermination of the Defense a. Policy dri ven; 10

b. Coverage driven ; c. Court driven . B. Policy Defenses 1. Voluntary Payments. a. Is there a prejudice requirement? b. Consent to settle clause; c. Policy differences (i.e., UM coverages); d. Policy provision: part of insuring agreement or exclusion? Definitions of “voluntary.” e. 2. Fail ure to Cooperate: Can it Bar Coverage? a. Duty to cooperate with the insurer with respect to the investigation of the claim; b. Limitations on cooperation and whether it will provide a valid defense to coverage; 11

c. Alleged lack of cooperation with respect to th e defense; d. Alleged lack of cooperation with respect to settlement: Is the insured in favor of settlement or opposed to settlement? 1. Does it matter? 2. If so, what are the pressure points for both the insurer and policyholder? 3. Likely relates to consent to settle clause, regardless of how framed in the policy. 4. Case law varies. 3. Failure to Provide Notice: Will it Bar Coverage? a. Is prejudice required? b. Does the type of policy matter? c. If prejudice is required, what level of prejudice? d. The test for prejudic e. 12