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Passing the Buck: How to Successfully Transfer Risk to Third Parties

By Brian Cafritz, Esq. When claims are made against your company, one of the quickest ways to clear that loss from your company’s books is to transfer the risk to a third party. A good Risk Transfer Plan can not only remove the risk of indemnity, but it can also prevent expensive litigation costs and attorney’s fees. Indeed, a well-planned and firmly executed Risk Transfer Program can change the internal perceptions of the risk management and claims management departments. By taking a few simple steps, your risk management strategies will create reduce the number of pending claims and create a flow of incoming money, rather than being seen solely as a source of outgoing payments. Key Principles of the Risk Transfer Program In order to compile a useful Risk Transfer Program, one must understand a few key principles regarding the available theories behind Risk Transfer:  Contribution: The right of one tortfeasor to get reimbursement or payment from another tortfeasor to equally or proportionally share the amount owed to a Plaintiff.  Contractual Indemnity: A promise in a contract to pay full amounts owed by another. The scope and breadth of the obligation are determined by the language of the contract, but it can often be limited by state laws depending on a state’s public policies. It is common to see a duty of defense attached to the duty to indemnify, but it must be expressly stated in the contract for it to exist.  Common Law/Equitable Indemnity: If no indemnity contract is available, Equitable Indemnity exists to shift liability from one who is only passively liable to the...

Does the Collateral Source Rule Apply in Contract Cases?

In Dominion Res., Inc. v Alstom Power, Inc., 825 S.E. 2d 757, 297 Va. 262 (2019), the court held
that the collateral source rule does apply to breach of contract actions, where a plaintiff has
been reimbursed by an insurer for the full amount it seeks in damages from the defendant. The
court noted, however, that whether the collateral source rule applies should be determined on
a case by case basis.

Bad Faith for a Bad Investigation

The US District Court in Alexandria recently found a carrier acted in bad faith in the case of South Boston Energy, LLC v. Hartford Steam Boiler Specialty Insurance. In this case, the insured, a power plant, suffered a loss to a large turbine. A piece of metal got inside the turbine and forced the insured to disassemble the turbine. The insured reported the loss to its insurer.

Assaulted Without a Motive

When an employee is assaulted at work, there are several factors to consider in assessing whether the assault “arises out of” the employment. Assault cases are tricky to defend due to the subjective nature of why a person is attacked. Further, the issue is compounded when the assailant is not available to testify regarding the motive. Recently, KPM’s own Bob McAdam successfully argued to the Full Commission that “why” an assailant attacks a claimant is the most important factor to consider regardless of whether motive is known.

DOL Adopts New Standard To Determine Compensable Time for Truck Drivers

On July 22, 2019, the Department of Labor (DOL) issued an opinion letter—FLSA2019-10—to address whether the time a truck driver spends in a sleeper berth is compensable under the Fair Labor Standards Act (FLSA).

This opinion letter withdraws the DOL’s previous opinion that employers could only exclude up to eight hours during a trip that was at least 24 hours long. The opinion letter also adopts an “on-duty” test as the most appropriate way to determine whether sleeper berth time is compensable.

UPDATE: Just When You Thought You Knew Everything About Pay and Quit Pursuant 38.2-2206 Here Comes the General Assembly Again!

In 2015, the Virginia General Assembly enacted significant changes to two statutes pertaining to settlement of underinsured motorist claims and subrogation rights of underinsured motorist carriers. The revisions specifically impacted Virginia Code Section 38.2-2206 and added a new statute at 8.01-66.1:1. The stated purpose of these changes was to expedite uninsured and underinsured motorist payments.