Importance of Professional Liability Insurance (Errors and Omissions Insurance)

Professional Liability insurance (Errors and Omissions Coverage) is important because it fills a glaring gap in the General Liability policy, which has a professional services exclusion that takes away coverage for lawsuits arising out of the rendering of or failure to render professional services. The definition of Errors and Omissions Insurance can vary per policy form. In addition, the General Liability form does not cover lawsuits alleging purely economic damages.

The Professional Liability (Errors and Omissions Insurance) policy form was designed to fill these gaps, which just happen to be among the most likely areas that will result in lawsuits against most professionals. A good Professional Liability (Errors and Omissions Liability) insurance policy is necessary to safeguard the assets of any company that provides professional services.

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Categories: Reports

Technology Service Providers: No Magic Pill For Common Client Headache

By: Gretchen Sayers, Esq. and Roxanne Westfall – Media/Professional Insurance

“Why did they sue us? We didn’t do anything wrong!” These are often the first words out of a policyholder’s mouth after a client files a lawsuit against their firm. As many innocent insureds eventually find out, doing everything right does not necessarily shield a company from being sued. If a company ultimately prevails in court, it can cost tens of thousands of dollars to successfully defend against even the most baseless of allegations. While it is virtually impossible to insulate any business completely from litigation, there are practical steps a Technology Service Provider (TSP) in particular can take to reduce the likelihood that a dissatisfied or financially troubled client will file suit. At the very least, these steps will certainly prove helpful in the defense of a suit if litigation cannot be avoided.
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Categories: Media Professional Insurance Articles

“Hasta La Vista, spam!” – Will Anti-Spam Laws Terminate Unsolicited E-mails?

Joel Brady, Claims Counsel – Media/Professional Insurance

Given the ever-expanding reach of the Internet and the proliferation of “e-commerce”, you are most likely aware that spam is more than just an interesting variety of gel-covered luncheon meat. With apologies to those with a predilection for Hormel’s famous product, SPAM™, the pejorative term “spam” refers to unsolicited commercial e-mails. If any facet of your business (or your clients’ business) utilizes e-mail advertising, you should know that at least 37 states have already enacted anti-spam laws. A recently-signed bill from Governor Schwarzenegger’s California, set to become law on January 1st, 2004, is easily the most restrictive anti-spam law yet. Just as the Terminator targeted John Connor, the law is poised to target not only the actual senders of unsolicited commercial e-mail, but also the advertisers whose goods or services are featured in the e-mail.
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Categories: Media Professional Insurance Articles

Not a “G’Day” Down Under for Publishers

Scott Swift, Claims Counsel – Media/Professional Insurance

Have you seen the popular television show featuring Steve Irwin “The Crocodile Hunter” on the Discovery Channel? Audiences are mesmerized as the host wades through the waters of Australia in search of dangerous crocodiles, and risks his life as he wrestles them to the ground. Recently, a U.S. publisher has been wrestling with a dangerous “crocodile” of a different sort in the courts of Australia and unfortunately, it appears the reptile has won the initial round.

Australia’s highest court recently issued an opinion that has the potential to adversely impact every publisher whose content is accessible via the World Wide Web. In Dow Jones & Company, Inc. v. Joseph Gutnick, the High Court of Australia decided that a U.S. publisher was subject to jurisdiction in Australia and must defend a libel action filed there solely because the allegedly defamatory article was accessible to Australian Internet users. The Australian High Court is the first court of last appeal in any common law jurisdiction to have addressed this important issue in a defamation case.

The case stems from an article published in the U.S.-based Barron’s magazine. The article reports on an Australian gentleman’s questionable business dealings and his association with a convicted money launderer. The businessman, Mr. Gutnick, filed a libel action against Dow Jones, the publisher of Barron’s magazine, alleging that the article contained false statements that harmed his reputation.

Mr. Gutnick argued that because the article was made available on the Internet, and was accessed by Australian residents, the trial court in Melbourne could exercise jurisdiction over the publisher. It is important to note that the article was written in the U.S., the magazine is headquartered in the U.S. and the magazine’s web server on which the article was uploaded is in the U.S. Furthermore, the magazine has only three Australian subscribers. Despite the publisher’s nominal contacts in Australia, the High Court agreed with Mr. Gutnick and held that the publisher is subject to jurisdiction in Australia.

Because of Gutnick’s far-reaching implications on all media companies whose content is published on the Internet, Media/Professional Insurance joined 16 media companies, including, The Associated Press, CNN, The New York Times, Time, Inc. and Tribune Company, in filing a “friend of the court” brief with the Australian High Court, urging the Court to reject the plaintiff’s argument that a defendant subjects itself to a foreign jurisdiction solely by publishing content on the Internet.

As a result of the Gutnick decision, any media company that makes content available over the Internet may be subject to jurisdiction in Australia. Thus, publishers may now need to consider the standards of Australian libel law in prepublication reviews and risk management. Further, other Commonwealth nations, including Canada, New Zealand, Hong Kong and the United Kingdom, give great weight and deference to Australia’s High Court decisions, and courts in other jurisdictions may be influenced by the ruling as well. Legal experts fear that the Gutnick ruling may ultimately result in U.S. Internet publishers being hauled into courts in countries throughout the world where the defenses to media liability claims are generally far less favorable.

Australia’s High Court ruling is at odds with recent rulings in the U.S. In December 2002, courts in Virginia and Texas refused to assert jurisdiction over publishers from other states in similar cases. Both U.S. rulings resulted in close opinions that hinged on determinations that the publishers did not intend to direct their website content to the out-of-state jurisdiction.

Unfortunately, non-U.S. courts confronted with similar issues in the future will likely look to the High Court of Australia for guidance instead of these recent U.S. court decisions. Media law experts have suggested convening an international conference to consider remedies to the problems created by the Gutnick decision. In the meantime, when it comes to media liability claims, publishers should remain wary of the potential dangers lurking in the swamps of international jurisdictions.

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Categories: Media Professional Insurance Articles

Diagnose Your Technology Business’ Exposure and Ensure its Financial Health

John D. Spiehs, Claims Counsel and Cameron Stracher, Senior Vice President and Special Counsel – Media/Professional Insurance

We all get sick sometimes. Even the healthiest among us. It might start as a tickle at the back of the throat but in the morning it feels like a blistering sandstorm. Thankfully, that’s why we have doctors, and antibiotics, and health insurance. Imagine, however, if we ignored our symptoms; if we tried to treat ourselves until the problem got so severe we had to be hospitalized. Unfortunately, that’s how too many technology companies, particularly smaller entities, conduct their business: ignoring the little risks until they become big concerns that threaten their survival. Then, when they finally decide to address their problems, many will discover that their insurance does not provide the coverage they expect, leading to serious complications and, in severe cases, their ultimate demise, speaking of unhealthy conditions. … Read more →

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Categories: Media Professional Insurance Articles