Insurance companies by nature are in the business of managing risk. That makes their attorneys the ultimate risk managers. Just ask Christopher Todd.
As a partner with San Diego's Wingert Grebing Brubaker & Goodwin LLP, Todd boasts insurance law among his various specialties. He finds himself counseling insurance companies on breach-of-contract complaints, the most frequent charge filed against insurers. Problems typically arise when the insured and the insurer disagree about the extent of the policy's coverage.
"The carrier has an obligation to then investigate that claim," Todd said, "and work with the insured to make a determination whether the contract is applicable for the claim or loss that's being submitted."
Since both parties in an insurance claim are trying to manage risk, insurance cases are particularly challenging and can lead to litigation. The key for insurance carriers in protecting against breach-of-contract claims is an open dialogue and the free exchange of information with its clients, Todd said. It isn't unusual, he noted, for insurance companies to have several people handling a single claim with each taking over at a different stage.
"That lack of continuity sometimes requires the reinvention of the wheel ... starting over with a new set of eyes that's now looking at it on the carriers' side," Todd said. "So I think communication and continuity would be the key things that would help the carriers be able to minimize the risk of a breach-of-contract claim."
Breach-of-contract complaints can be difficult to prove as well as to defend, especially in California.
"There are many, many times where there really are factual questions and factual issues that have to be resolved before you know whether the insured is entitled to coverage," Todd said, "or the insurer is appropriately indicating to the insured that the policy doesn't apply."
In the state of California, the burden of proof is on the insurance carriers slightly more than their clients.
"The courts will strictly construe an insurance contract against the insurer and will resolve ambiguities, if there are any in the insurance policy, in favor of the insured making the claim," Todd said. "Obviously the overriding concern there is that it's the insurance company that's writing up the contract. The unsophisticated insured can say there are components of this contract that he needs but really has no say in what the language is going to be that creates those contractual obligations that the insurer is providing."
There are certain cases where a large corporation, which is seeking to be insured, can actually negotiate the terms of the contract somewhat or help determine what will be in the endorsements of the contract. But even with big businesses, the burden is still on the insurer.
"Big business as the insured is still going to get more favored protection in the eyes of the law than the insurance company will because big business isn't necessarily expert in the insurance business," Todd said.
Insurance fraud also is a problem for carriers, especially with the prospect of a lottery jackpot award, and they have to be vigilant to guard against this fraud. Carriers are supported by economic fraud units of local law enforcement agencies as well as the Department of Insurance, according to Todd.
"Not every claim should be perceived to be a potential fraud," Todd said, adding, "It is appropriate for a carrier to at least be guarded at the outset of evaluating the claim until the company is getting the right truth signals from the insured that this is valid.
"This really comes back to communication and continuity because the more opportunity the carrier has to get a sense of where the individual claimant is coming from, the better it is for both of them in evaluating the validity of that claim."
Todd said that insurance carriers are now featuring a new type of protection against "glitches" in a client's technology service. It's listed in what's called a "hyperdrive technology professional liability policy."
A glitch is defined broadly within the policy, Todd said, including anything that runs afoul in the software system. For example, if someone's private information is accidentally disclosed to the public through a software glitch, creating financial risk to the company, the company could be protected.
According to Todd, the firm of Wingert Grebing Brubaker & Goodwin has been successful because of communication.
"I like to think of our firm as one that listens and thinks before we speak," Todd said. "And I think we do our best to really understand what the concerns of our client may be and to achieve their objectives in the most efficient way under the law."
Todd, who is nearing his 20th year of practice, has dabbled in several aspects of the law, including business disputes, real estate disputes, elder abuse, trust and estates disputes and professional malpractice. He describes himself as having a general civil trial lawyer's practice.
"It's pretty broad," he said. "I think just by being inquisitive to the world around you, you hopefully have an ability to serve more and serve better."
Todd, as well as other members of Wingert Grebing, has represented the insured, too. This helps when defending insurance carriers, according to Todd, because Wingert Grebing's lawyers know what the other party is thinking.
"By having a caseload that doesn't necessarily emphasize one side to the exclusion of the other, I think it helps give us a contextual understanding," he said, "and to help us understand whatever the given client's concerns or framework from which their operating might be.
"I think we have a clear ability to see and analyze and advocate on behalf of a good cause, whether it happens to be one that is a policyholder's cause or a policy writer's cause."