Tag: Commercial Property Insurance

water damage

What To Know About Water Damage

There are a variety of ways your business might suffer water damage. From floods to putting out fires, water damage is a real threat to your business, and there are a few things you need to know to protect your investment.

Not All Water Damage Is Created Equal

You might think that water is just water, but to your insurance company, this is far from the truth. Unless otherwise specifically stated, flood damage and certain types of water damage are not generally covered under the same policy. While most commercial insurance policies will cover water damage, you will need an additional policy to cover flood damage. Many times, it matters how the water was discharged. Water discharge from some types of building systems can be covered, while it is not covered if the water came from a different type of fixture or system.

Don’t Forget The Maintenance

You might think a tiny leak from a pipe isn’t anything to worry about, but this is far from the truth. Gradual leaks cause damage over time, and if you don’t make any effort to fix the leak your insurance company might not cover damage associated with “continuous or repeated seepage.” Regular maintenance can ensure you avoid costly out of pocket repairs in the future.

The Clock Is Ticking

Do not waste time in contacting your insurance company after suffering water damage. Water damage has the potential to cause massive secondary damage if not immediately treated. In as little as 24 to 48 hours, mold can begin to grow and become widespread. Mold can cause serious health problems and is very costly to have removed, so clean up needs to begin as soon as possible.

Water Pollution Levels Matter

Water damage is categorized into three levels by the amount of pollution. Water with high pollution levels could cause serious illness or death if not handled appropriately. It’s important to keep in mind that while some water might start off without any pollutants, it might not stay that way. If there is any doubt about the level of pollution in water damage, leave it to the professionals.

Bad Faith Insurance Claims

Sometimes policyholders follow all appropriate steps when filing a commercial insurance claim, but their claim will still be denied. Some insurance companies, like surplus lines insurers, will often use bad faith tactics to avoid paying out costly claims. However, with the help of a skilled insurance attorney, policyholders can obtain the compensation they rightfully deserve under their policies.

Raizner Slania: Texas Water Damage Claims Attorneys

The experienced water damage attorneys at Raizner Slania have successfully obtained compensation for clients against some of the largest insurance companies in the world. If your business suffered water damage and your commercial insurance claim was denied, call us today for a free consultation.

Arbitration Endorsements

Arbitration Endorsements – The Latest Insurance Industry Overreach

The insurance industry has yet another plan to seek various immunities and avoid public accountability in the form of a proposed arbitration endorsement. The Texas Department of Insurance will conduct a hearing on July 6, 2016 to consider the proposed endorsement.

What is the proposed arbitration endorsement?

Labeled Endorsement No. HO-802, the proposed form has some troubling provisions. Initially, the endorsement requires the parties to request and then participate in the appraisal process under the policy. If a dispute continues after appraisal, the parties must attend mediation. And if the dispute still remains unresolved after mediation, the policyholder and insurer must participate in arbitration.

How would the arbitration work?

The endorsement form requires there to be a single arbitrator. There’s no three person panel to provide a semblance of a level playing field. Instead, a group called Conflict Solutions of Texas appoints the single arbitrator and manages the process. You can read more about this group on their website, but a quick review shows a panel of attorneys, largely defense lawyers, and a few former judges. The group appears to have been started by several insurance defense lawyers with the Brin & Brin firm. The Brin firm is a long-standing, well respected firm in Texas, but let’s all be intellectually honest in what is being proposed. Mr. Brin’s bio on his website discloses his membership in various defense bar organizations, such as the Texas Association of Defense Counsel, the Defense Research Institute and the International Association of Defense Counsel. The firm boasts their successes throttling Texas consumers and policyholders on behalf of corporate defendants: “Our lawyers have secured defense verdicts in traditionally plaintiff friendly areas because we try cases in those areas on a regular basis. We know the people – both judges and jurors – and we know what works in each area.” Having practiced insurance law in Texas for about 25 years, I did not recognize one single panelist to be a policyholder lawyer. Not one.

To earn the right to participate in this process, a policyholder would have to travel to the closest city with a population of over 100,000. That’s fine if you live in Houston, Dallas or another larger city, but for rural policyholders, the enforcement of even a minor claim would involve a long road trip to a much larger city, and presumably one where the folks that run this arbitration “know the people.”

And if that doesn’t trigger your Spidey Sense, take an even closer look. Discovery is limited, and the insurer can refuse to produce parts of its files that it claims are privileged, with no way to address bogus privilege claims except to the single arbitrator. There are no depositions or other traditional discovery. There is no obligation to produce the critical, institutional documentation such as procedure and policy manuals that guide adjuster behavior.

The proposed endorsement even claims to be governed by the Federal Arbitration Act instead of the Texas version contained in chapter 171 of the Civil Practice and Remedies Code. Why? Because the Texas version actually has some level of protection for consumers, such as the invalidation of unconscionable arbitration provisions. Or the right to cross-examination. Or depositions. Or the basic requirement that the proceeding take place in the adverse party’s home county. The Texas act requires both the party and its attorney to sign off on an arbitration agreement if there is more than $50,000 in controversy. So, the Federal Arbitration Act it is, even for Texas insurers disputing Texas claims with Texas policyholders.

Not surprisingly, the whole process is kept secret. And if you decline to participate in the process: “we will proceed without you, and an arbitration award will be made by the arbitrator.”

What’s the purpose of this, if there’s already an appraisal provision in the policy?

Anyone familiar with Texas insurance policies and first party property insurance claims knows that most insurance policies in this state contains an appraisal clause. The past few years of court decisions have also taught us that it is nearly impossible to waive these provisions, and that they will be enforced. The appraisal process has been around for a very long time, and while it sometimes doesn’t work out to everyone’s satisfaction, it’s a fair process when everyone is following the rules. It’s quite simple: both sides select an appraiser, and if a tiebreaker is needed, either the appraisers or a court can appoint an umpire. The majority wins. According to the Texas Supreme Court, complicated causation questions can be resolved as a part of this process.

When handled competently and fairly, an appraisal is a lot like a three person panel arbitration. Frankly, appraisal and arbitration are largely indistinguishable, beyond the customary practice that appraisals are typically handled by adjusting or construction experts rather than lawyers. Any insurance company or policyholder can enforce an appraisal provision, and can compel a reluctant opponent to participate. Appraisal awards are largely enforced, with exceptions arising typically only when someone breaks the rules.

Given the presence of an effective dispute resolution process in the form of contractual appraisal, the insurance industry’s effort to trump a three person, professional, contractual process with what amounts to a star chamber – presided over by an omnipotent defense lawyer – represents a deeply cynical overreach. It is a blatant effort to nullify the appraisal process, and rewrite it with a process entailing a single arbitrator selected by the insurance industry. There is no chance whatsoever that any insurance company would pay an adverse appraisal award, if they can simply have their arbitrator overrule it.

Is there a discount for accepting this arbitration endorsement?

This is where the insurance industry really thinks that Texas consumers are just plain stupid. Recent documents obtained from TDI show that the supposed discount the industry will offer is a complete sham. The proponent of the endorsement, Texas Farm Bureau, raised its rates in the targeted counties, mostly in South Texas. If you accept the endorsement, they’ll then lower your rates by the same amount they just raised them. You read that right. They jack rates up by 25%, then lower them by the same 25%, provided you consent to the single arbitrator process. So, you pay the same as you did before, except now you’ve given up any legal leverage you ever might have to secure a fair payment.

What’s next?

The Texas Department of Insurance will conduct a hearing on the proposed arbitration endorsement on July 6, 2016 at TDI’s offices in Austin. Stay tuned, but speak up if you care about your rights. You can send TDI an email opposing this gambit by clicking on this link from the Texas Watch website.