Emerging Trends Series - Trends in Insurance Recovery

NET WORK

EMERGING TRENDS SERIES TRENDS IN INSURANCE RECOVERY Anthony Crawford, Partner, Reed Smith

EXECUTIVE SUMMARY

EMERGING TRENDS SERIES NETWORK

Emerging Trends in Insurance Recovery Reed Smith’s Anthony Crawford BIHC recently spoke with Anthony Crawford, a partner in the New York office of Reed Smith.

Crawford specializes in insurance recovery.

Q: W hat are the main trends in insurance recovery in 2022 and what is driving these trends?

A: T his year presents emerging issues and

continuing trends. The war in Ukraine presents a number of insured risks. For example, the aviation sector is potentially facing one of the biggest losses in history due to Russia’s confiscation of foreignowned aircraft. Entities with interests in that area need to work with their insurance recovery attorneys to mitigate and manage their risks. In addition, business interruption claims continue due to the COVID-19 pandemic and associated losses.

Technology-driven trends include cyber liability and artificial intelligence. AI is definitely on the horizon.

As companies implement AI solutions, questions will arise regarding liability if the AI fails or is breached. We are helping clients identify risks and gaps in this area.

ESG (Environmental, Social, Governance) is another trend we help companies navigate. Issues like environmental claims and government investigations are receiving more attention now. Also, last year was huge for M&A-related issues. And traditional catastrophic loss claims continue, often exacerbated by climate change.

Q: W hat are some best practices for GCs and companies in insurance recovery and risk management?

A: I nsurance should be a fallback. It must be part

need practices and procedures in place to recognize and mitigate risk.

Of course, things happen. Optimally, the risk management department involves coverage counsel early. During policy placement, we can review policies to ensure they’re providing the expected coverage. After a loss, we can help navigate the daunting claims process, whether in the background providing advice or out front as coverage counsel.

Finally, it is painful when companies lose insurance coverage because they fail to give the insurance company timely notice. Sometimes the people closest to the event don’t even know to notify an insurance company. This highlights the importance of engaging coverage counsel at the beginning.

When we are involved early, we can help draft policy language stating that the company doesn’t have knowledge until someone in upper management is aware of a potential loss.

Incident reporting is an element of good practice.

Companies spend a lot of money on insurance premiums and don’t always know what is covered.

I counsel that it doesn’t hurt to ask questions. If you never ask, you don’t know.

Q: W hat are other reasons why GCs and companies engage outside counsel?

A: B eing versed in insurance is valuable, even

outside of the loss context. In each phase of the risk management process, it’s good to involve counsel early. When looking at policies, we can review to ensure the language actually covers the risks the organization faces. There are also considerations, beyond just the dollar amount of required coverage, which companies should take into account when drafting contracts with insurance and indemnity provisions, such as requiring the correct policy type is purchased and ensuring the indemnitor’s policy is the primary coverage that will respond to a loss.

of a broader risk management policy. Organizations EMERGING TRENDS INTERVIEW SERIES

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EMERGING TRENDS SERIES NETWORK

About the BIHC Network & Emerging Trends The Black In-House Counsel (BIHC) Network works with legal departments and law firms to advance Diversity, Equity, and Inclusion in the legal profession. We create content, events, networks, and professional development training for corporate legal departments and law firms. A key part of our mission is to showcase the talents of leading lawyers of color in top law firms to in-house legal departments.

Emerging Trends features insights from leading partners of color on key trends shaping the business landscape over the next 12 months. Each Emerging Trends briefing provides concise information on what general counsel and boards need to know about and best practices in how to approach this topic.

BIHC is pleased to hear from the following Reed Smith partners in the Emerging Trends Series:

Elizabeth Brandon

Liza Craig

Partner

Partner

DALLAS Commercial Litigation

WASHINGTON, D.C. Global Regulatory Enforcement

Anthony Crawford

Stephanie Wilson

Partner

Partner

NEW YORK Insurance Coverage

PRINCETON, NEW JERSEY Business & Finance – Financial Industry EMERGING TRENDS INTERVIEW SERIES

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