Situation: Hospital facing unanticipated $15 million exposure
- 10-year-old GL claim being defended by hospital’s former GL carrier
- Transition in hospital’s risk management department resulted in loss of institutional memory and records regarding claim
- Client unaware that hospital excess carrier disclaimed coverage
- Client unaware that insurance counsel lost trial as to liability
- Insurance counsel contacted hospital for at end of damages trial — and on the day before a holiday weekend — to obtain client funds for settlement
- Based upon available information, client refused to provide funds; attorney lost damages trial, resulting in $15M exposure
Legal issues:
- Need to reassert active oversight of matter through engagement of experienced trial and insurance coverage counsel
- Need to persuade excess coverage carrier of their inability to disclaim coverage in order to reduce client exposure
Legal solution/strategy:
- Reconstruct claim history
- Engage new counsel and develop legal strategy
- Address excess carrier’s untenable position and convince all of client’s inability to contribute to settlement
Outcome:
- Excess carrier was brought to table and assumed liability
- Case was settled with no out of pocket expense for client
Posted in Corporate Counsel, Crisis Response, Governance, Healthcare, Not-For-Profit
