Author: Clint Scott

In 2013, a small company called Zenefits opened offices in New York and California. Over the past three years, it spread throughout the country. Zenefits, according to its own website, “integrates all of [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][a company’s] HR functions into an easy-to-use online dashboard;” in layman’s terms, the company sells cloud-based software that helps small to medium sized businesses manage their human resources departments. As part of the package, it also helps employers “manage all aspects of employee insurance online.”

This last part, about the insurance management, is what concerns us – specifically because in July, the state of Tennessee fined Zenefits $62,500 for violating insurance requirements. In a statement picked up by Reuters, Julie Mix McPeak, commissioner of the Tennessee Department of Commerce and Insurance, claimed “Under the company’s past leadership, compliance with insurance laws and regulations was almost an afterthought.”

Zenefits violated licensing rules here in Tennessee, and looks to have done the same in seven other states. The CEO, Parker Conrad, allowed his sales teams to act as insurance brokers, which means they were, essentially, selling insurance without a license. Buzzfeed reports that Tennessee regulators found “65 examples of employees selling insurance or otherwise acting as a broker in that state without a local license,” and 10 where the employees had no license at all.

Parker has since been let go, and the company has reported all potential licensing issues. They have also started requiring their brokers to finish 52 hours’ worth of coursework and instituted a new system to track compliance.

This story was an interesting one to watch develop, because the policies themselves were never called into question. But purchasing a policy from an unlicensed broker – one who is likely unable to explain any gaps in your coverage, or potential pitfalls you might face when making a claim – is a serious problem. If something goes wrong, or if the policy does not deliver what it promises, you may have a claim for broker negligence.

At the Gilbert Firm, we provide comprehensive counsel to policyholders and employers who have been harmed by such practices. To schedule an appointment with Tennessee insurance disputes attorney Clint Scott or Brandon McWherter, please call 888.996.9731 or fill out our contact form. We maintain offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville for your convenience.

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Commercial property is, by and large, pretty expensive. For many small business owners, buying a piece of property that hasn’t budged on the market for a while can look like a good bargain, since you are more likely to negotiate a better selling price. All of that is well and good, until a pipe springs a leak or the ceiling caves, or you find some other damage that leaves you at a loss.

When you purchase a building that has been unoccupied for an extended period of time, you must purchase an insurance policy that fits your needs, and understand what is and is not covered in that policy.

We have discussed exclusions before, but the average exclusions for a policy may differ when it comes to commercial property. This is also true for buildings that have been abandoned or vacant for more than 60 days. Your policy may not cover you for:

• Previously damaged areas. While no insurance policy is going to cover you for damage that already exists, your policy may have a clause that allows it to deny claims if the damaged property, once fixed, becomes damaged again. For example, let us say there is a leak in one pipe in the building. You fix the pipe and the damage to the supports and dry wall, and then find that another leak springs up in the same exact place. Your policy may not cover that claim, since the damage occurred again.
• Animal damage. It is unlikely that an insurance policy covers the mice that chew your wires, or any other examples of damage done by critters who have taken up residence in or around your building.
• Electronic data. If you are the victim of a security breach, any data that is lost or stolen is may not be covered. You can purchase additional coverage for cyber security, and if you run any part of your business online, you absolutely should make that purchase.
• Damage to the land. This is a tricky one for a lot of commercial property owners, but it works like this: when you buy a property, the land upon which your building sits might not be covered.

It is possible to purchase additional coverage for your property, and your agent should explain clearly and carefully what types of coverage you need. For example, if you buy a building in a flood zone and your agent fails to disclose that you need flood insurance, you may be able to make a case for an agent negligence claim. Before you buy any property, though, you should sit down with your agent to talk about your needs, and to ensure that your policy is sound.

The Gilbert Firm upholds the rights of policyholders throughout the state. If you believe your insurance agent acted negligently, or if your claim has been denied under what appears to be suspicious or unfair reasons, you’ll need a skilled Tennessee bad faith attorney to help you. Please call 888.996.9731, contact Clint Scott or Brandon McWherter, or use our contact form to schedule your consultation at one of our offices in Nashville, Chattanooga, Memphis, Jackson or Knoxville to find out more.

We all grumble a little bit about paying our insurance premiums, until we get hurt or sick – and then those premiums don’t seem so bad. HealthCare.gov tells us that the average cost of a 3 day stay in a hospital is about $30,000, or $10,000 a day. So when you are seriously injured or ill, knowing that your health insurance will pick up the majority of that cost can ease some of your worries.

Unless your health insurance never receives a bill from the hospital – which is exactly what happened to a young woman in North Carolina, and the reason we wanted to talk about a controversial insurance practice taking place in states across the country.

In sum, this is what happened. Jessica Mounce was rear-ended by another car, and she “flew to the other side of the highway” as a result, as she told WSOCTV. She went to the hospital, but the hospital never billed her health insurance company. Instead, they went after Jessica herself, even putting a lien against her and threatening her with collections.

To understand why the hospital is allowed to do this, you need to know more about balance billing.

How health insurance pays a hospital bill

Insurance policies vary from customer to customer, but one of the things they do have in common is how they work with hospitals and doctors. This is called “balance billing,” and in very, very general terms, it works like this.

Let us say that ABC Hospital charges $200 to fix a broken leg. XYZ Insurance Company tells the hospital that they would love to contract with them, but they are only willing to pay $150 for a broken Leg. ABC Hospital agrees. Then, XYZ Insurance company tells you that they will only pay (based on your policy) for 50% of the costs to fix your broken leg – in this example, $75. You agree to this.

You break your leg, go to ABC Hospital, who then bills XYZ Insurance Company for $150. XYZ covers $75, so the hospital bills you for the additional $75. In that way, the total cost of $150 is paid in full.

Now, if you’re wondering what happened to that other $50 – it’s gone. The insurance won’t pay for it, so hospitals are supposed to chalk that up as the cost of doing business; after all, by accepting the insurance and whatever the policy will pay, the hospital stands to gain more patients and thus more revenue.

What the hospital did instead

Instead of billing Jessica’s healthcare insurance provider, the hospital – looking to recoup all of its money – sought payment from the auto insurance carrier for the driver that hit Jessica, placing a lien on any settlement or recovery, and threatening to turn her over to collections. They never billed her healthcare provider at all. If it seems unfair, it is – but it also may be perfectly legal in most states. WSOCTV reports that there are lawsuits pending in similar cases in Colorado, Ohio, Missouri, Arkansas and North Carolina right now, and there could be more in other states, too. Indiana, on the other hand, has passed laws that prohibit hospitals from not going through a person’s healthcare insurance provider first.

We urge you to review both your health insurance and auto insurance policies to make sure you have enough coverage, and to make sure that your health insurance is billed for any medical treatment that you receive. At the Gilbert Firm, we protect policyholders at risk of being taken advantage of. To make an appointment with Clint Scott or Brandon McWherter, please call 888.996.9731, or fill out our contact form. With offices in Nashville, Chattanooga, Memphis, Jackson and Knoxville, you can always find an experienced Tennessee bad faith attorney nearby when you need help.

When we talk about agent negligence, we’re not talking about your agent stealing your premiums or selling you a fake insurance policy. As popular as that trope might be on television or in film, outright theft is pretty rare (which is why stories about it go viral so quickly online; it happens so infrequently that it becomes instant news). Agent negligence, however, is a far more common problem, and it could lead to your claim being denied even if you crossed all your “T’s” and dotted all your “I’s.”

Acts of agent negligence

There are a number of ways an agent may be negligent when it comes to your insurance policies. Some of the more common ones include your agent:

• Completing your application with inaccurate information. Agents often complete applications without asking policyholders the questions contained on the application. This may result in false information being provided to the insurance company and a denial being issued for misrepresentations on the application. This may be negligence for which the agent and the insurance company are responsible.
• Giving you incomplete information about your options. Your agent’s job is to listen to your needs, figure out what coverage you require (and anticipate other types of coverage that you might end up needing), and then create options for you. Failing to properly explain what you might need and why may constitute negligence on the agent’s behalf.
• Failing to submit your application. The agent is the person who submits your application for insurance to the underwriter. Failing to procure coverage is one of the more common errors made by agents, and as such is a common reason why people sue their agents and insurers.
• Improperly explaining the exclusions in your policy. It is not enough to simply say there are exclusions; your agent should explain what that means, so you are prepared. Likewise, he or she should offer you options for additional coverage to close up any gaps.
• Improperly valuing your assets, leaving you with inadequate coverage. With any policy, you may be inadequately covered. Your agent should identify areas where your coverage may not be enough.
• Failing to properly explain any changes in your coverage. Some agents send out a newsletter, or schedule an annual review of your coverage in case anything has changed. If your agent fails to do this, or does not fully explain what changes have been made, why, and how they might affect you, you could have a claim for negligence.

Insureds count on their agents to obtain for them the right type of policy with the right amount of coverage. As a policyholder, you may be able to make a claim against your insurer if your agent failed to perform his or her duties with a certain level of care.

At the Gilbert Firm, our insurance dispute attorneys assist policyholders whose claims have been denied through no fault of their own. To schedule consultation with an experienced Tennessee bad faith attorney, please contact Brandon McWherter or Clint Scott, or one of our offices in Nashville, Chattanooga, Memphis, Jackson or Knoxville, by calling 888.996.9731 or using our contact form.

Recently, we wrote a quick synopsis on all-risk policies vs. named perils policies. In that post, we covered some of the more common types of exclusions most Tennessee homeowners have in their named-perils policies. One we have not yet talked about is infestation. Just as brakes and tires are rarely covered under a warrantee, the creepy-crawlies that sometimes end up in our homes may also be excluded.

Infestations are not limited to bugs, either. Mice, rats, squirrels, snakes, birds – whether they run, fly or slither, they may not be covered under your policy. More frustrating, however, is that the damage they do may also not be covered. Insurance policies often have exclusions for infestations. Thus, your policy may exclude coverage for the infestation, and your policy must be analyzed to determine whether you have coverage for the damage caused by an infestation. For example, damage caused by termites is likely to be excluded by your policy, which means you are probably on the hook for the costs associated with those repairs.

Homeowners’ policies can have a lot of exclusions. For this reason, it is important to understand the coverage provided by your policy and have your policy analyzed as soon as a potential claim arises to ascertain whether or not you have coverage. The Gilbert Firm helps policyholders in Tennessee recover the compensation they are entitled to receive after they have sustained damage to their home covered under their policy. To make an appointment with Tennessee bad faith attorney Brandon McWherter or Clint Scott, please contact us. With offices in Nashville, Chattanooga, Memphis and Jackson, the Gilbert Firm is always nearby when you need us most.

#badfaithattorney #buginfestation #insurancepolicies

In many professional and commercial liability policies is a provision called “defense within limits.” In a nutshell, a DWL provision means that the amount of your policy that can be paid out in a claim must include legal defense costs. As a policyholder, this puts you in a unique predicament: if you are being sued, do you spend the extra money and hope you win, or do you try to settle as quickly as possible because you know exactly how much money your policy offers?

Because these types of policies are often less expensive than more inclusive policies, they are a popular choice for small businesses and start-ups, where the initial capital amount might be small. They also give policyholders a small amount of control over how their sides are presented, because they are entitled to their own independent counsel.

Another potential problem comes in the guise of bad faith in terms of defense costs – namely, how do you know if your insurer is really doing their best for you and your business? For example:

1. Did the defense need to cost that much? Let us say your policy has a limit of $1 million, and your carrier spends half of that defending you. That leaves you with $500,000 in your policy to pay out a settlement. If your insurance company overspent, failed to manage its finances or opted for more expensive strategies, you can make an argument that it acted in bad faith.
2. Were you kept in the loop about expenses? Just like in general liability policies, your insurer must be upfront about where things stand. Failing to communicate exactly how much money has been spent, or what the expected “burn rate” is, leaves you unable to make decisions about whether or not to offer a settlement. This could also be construed as an act of bad faith.
3. Did they even discuss a settlement? Your insurer knows how much your policy is worth. If a settlement offer was never on the table when it really should have been, because your insurer failed to discuss that option, the company may be found to have acted in bad faith.

We know that this particular provision may not affect all of our clients in Tennessee, but it should serve as a warning to anyone with any kind of insurance policy. If you are a victim of bad faith, an experienced Tennessee insurance disputes attorney can help. The Gilbert Firm has provides compressive representation on behalf of insureds throughout the state. Please contact attorneys Brandon McWherter or Clint Scott to find out more. The firm maintains offices in Nashville, Chattanooga, Memphis and Jackson for your convenience.

#insurancedisputes #insurancedisputeattorney #badfaith

In an effort to avoid paying valid insurance claims, insurance companies often deny payment by claiming that a policyholder has made material misrepresentations either before the policy was issued or after the policy was issued. For example, the insurance company may claim that an insured “lied” on the application for insurance. In Tennessee, Tenn. Code Ann. § 56-7-103 states:

“No written or oral misrepresentation or warranty made in the negotiations of a contract or policy of insurance, or in the application for contract or policy of insurance, by the insured or in the insured’s behalf, shall be deemed material or defeat or void the policy or prevent its attaching, unless the misrepresentation or warranty is made with actual intent to deceive, or unless the matter represented increases the risk of loss” (emphasis ours).

This section of the law applies to alleged misrepresentations during the application process, before the policy is delivered. Whether the law applies to an individual situation requires an in depth analysis of the argument being made by the insurance company and of the application process, as well as the potential negligence of the insurance agent if there are in fact mistakes on the insurance application.

Misrepresentation after a policy has been delivered

On the other hand, the insurance policy language governs the relationship between the policyholder and the insurance company, including any alleged material misrepresentations that the insurance company may claim to have occurred, after the policy was delivered. For example: let us say a policyholder suffers a house fire. He or she puts a claim in for the losses. The insurance company claims that the policyholder has made material misrepresentations in submitting his/her claim for insurance proceeds as to contents that were damaged/destroyed in a fire loss.

The policy will most likely deny coverage where material misrepresentations after made after delivery of the policy. This language is generally found under the general policy conditions with a heading of “Concealment” or “Fraud” that says the entire policy is void, if whether before, during, or after a loss, any insured has:

• Intentionally concealed or mispresented any material fact or circumstance;
• Engaged in fraudulent conduct; or
• Made false statements relating to this insurance

The language may differ from policy to policy, but the intent generally remains the same.

Once again, there are a variety of issues that arise in this context which must be analyzed to prevent an insurance company from seizing on an honest mistake by the policyholder (i.e. listing the wrong brand of toaster oven on their contents inventory) in an effort to avoid paying what is rightfully due and owing under the insurance policy.

Policyholders are entitled to the protection provided under their insurance policy and for which they have faithfully paid premiums in the event that disaster strikes. All too often, insurance companies try to use “honest” mistakes as a way to avoid paying valid claims. This is why you want a skilled Tennessee insurance dispute attorney on your side if your claim has been denied because of an alleged misrepresentation, or any other reason. The Gilbert Firm protects the rights of policyholders in Nashville, Chattanooga, Memphis, and Jackson, and throughout Tennessee, in claims disputes and in bad faith actions. To schedule a consultation with Brandon McWherter, Clint Scott, or any Tennessee insurance claim dispute lawyer at our firm, please contact us.

The French poet Charles Baudelaire once said “The finest trick of the devil is to persuade you that he does not exist.” This is a particular trick of the insurance industry as well, though they call it “post-claims underwriting.” In short, post-claims underwriting means this: you purchase an insurance policy. You suffer a loss. You make a claim for that loss. The insurer turns around and says, “You never should have been given this policy in the first place because you were a bad risk. We’re not paying it.” While it is bad faith for the insurer go back to your policy and somehow rewrite the claim to ensure that you cannot be paid, that does not mean that all refusals are illegal.

For example, let us say that you purchase homeowners’ insurance, and you are asked if you have had any prior insurance losses. You respond that you have not had any losses, but forgot about the hail claim you made on your car ten years ago. One night, your house catches on fire. If your response regarding prior insurance losses was not accurate, the insurance company may be able to rescind your policy.

Why some insurers “get away” with it

When you apply for an insurance policy, the company sends the policy to be underwritten by someone who is supposed to evaluate what kinds of risks you pose as a policyholder. The underwriter is the one who determines what the cost of your policy will be, or whether or not you can even get a policy. When an insurance agent misrepresents your policy, or purposely asks you rather vague questions, he or she may be setting you up to have a claim denied later.

Another reason why we may see an increase in claims being denied has to do with policyholders’ propensity for buying insurance online. Online applications are often brief and general, and when the actual application comes – which is long and detailed, and usually filled with terms that no one outside of the insurance company can understand – most people simply check the “I agree” box and move forward. After all, they understood the initial online application, so why do they need to read the longer one?

Under certain circumstances, these practices are legal. In others circumstances, they are acts of bad faith. And when they are, you do have legal remedies at your disposal to help you. If you wish to avoid these potential problems altogether, you should make sure that you understand all questions on your insurance application and that you are as accurate as possible. Also, don’t sign an insurance application without thoroughly reading and analyzing each question. If you have questions, meet with your agent and go over them with him/her, as they should be able to assist you through the document. Taking notes of your conversation with your agent may be helpful down the road if an issue arises.

The Gilbert Firm assists policyholders throughout Tennessee whose insurers are acting in bad faith. We invite you to contact us to speak to Brandon McWherter or Clint Scott about your experiences. We have offices in Nashville, Chattanooga, Memphis and Jackson to better serve our clients throughout the region.

Because we handle a tremendous amount of insurance disputes each year, our team has a firm grasp on arbitration. (You can see a couple of examples right on my attorney bio page.) The average policyholder doesn’t know much about arbitration, though, and that can hurt you in the event that you ever need to make a claim.

Arbitration is a form of Alternative Dispute Resolution (ADR). It’s supposed to help you and the other party avoid litigation, and the time and costs associated with going to trial. In essence, it works like this: two parties (the policyholder and the insurance company) cannot reach an agreement on a fair settlement of a claim. Rather than go to trial, both parties agree to arbitration, where an arbitrator will act in the place of a judge and review the evidence and make a decision. When you choose arbitration, you still:

• Use an insurance dispute attorney to argue your case
• Present evidence
• Present testimony, when applicable
• Abide by the decision of the arbiter

That last point is especially important: an arbiter’s decision is legally binding. Whatever the arbitrator decides, both the policyholder and the insurer must live with it – usually.

Appealing an arbitral award

In Tennessee, there are a small handful of grounds on which an appeal can be brought. This is different than appealing a decision in a civil or criminal court, where a judge will look at the facts of the case. In order to overturn an arbitration award, an insured typically has to prove that the arbitrator was partial to the other party, biased against the insured, or committed an act of fraud.

Arbitrate or litigate?

Depending on the nature of your policy, you may be forced into, but if you have a choice, you should come in and speak to one of our insurance dispute attorneys at the Gilbert Firm. We have offices in Nashville, Chattanooga, Memphis and Jackson, so travel is not an issue for us should you choose to go that route. We can advise you about your options and help you make a decision that is best for you. To schedule a meeting with Tennessee insurance dispute lawyer Clint Scott or Brandon McWherter, please contact the Gilbert Firm. We can help.

When you purchase a unit in a condominium, you own the interior of that unit; the exterior (or from the studs-out, typically) is managed by a homeowners’ association (HOA). As part of your contract, you will pay HOA fees that go towards the upkeep of the land and outside structure. Part of those fees pay for an insurance policy that covers the complex as a whole. Because of this, condo residents and HOAs may face certain challenges when it comes to making an insurance claim, especially if there is a dispute regarding coverage or causation.

Proving causation

The first hurdle most HOAs and policyholders face involves causation – i.e., what event led to the problem associated with the claim, and is it covered under the policy. For example, let us say that after a heavy rainstorm, residents notice that the roof now leaks, causing damage to their ceilings. The insurance company says that the leaks are the result of an older roof, and were bound to happen because the HOA was not maintaining them properly. The HOA says that there had been no leak before the storm. At this point, an attorney representing the HOA will attempt to prove that the storm was the cause of the damage, and an attorney representing the insurance company will attempt to prove that it was lack of maintenance, or wear and tear. For HOA’s, this dispute is near commonplace with the seemingly unending barrage of hail and wind storms that have barraged the South in recent years. The lawyers at Gilbert McWherter Scott Bobbitt PLC have handled dozens of these claims and would be pleased to assist.

HOA claim or condo-owner claim?

For condominium unit owners, this is where the second hurdle comes in. A leaky ceiling can cause damage to the electrical wiring inside the condo unit, but it can also damage electronics that are plugged into that electrical circuit, or to furniture or home décor. The HOA insurance policy will likely not cover your personal effects, which means you need to make a separate claim for the items that were damaged due to the leak. If your HOA offered an all-in insurance policy, and you did not purchase any additional insurance, then the HOA’s claim might cover the damage to your items under their policy. However, another separate claims may need to be brought against the insurance company to ensure that you receive compensation for your damaged items.

The smart move for condo owners is to always purchase their own individual insurance policy, just in case. You can opt for umbrella coverage or a policy that covers only what you own, but additional coverage could be the difference between recouping your losses and taking one. If you have questions about your policy, or are facing a dispute with your insurer over your claim, Gilbert McWherter Scott Bobbitt PLC can help. Please contact Brandon McWherter, Clint Scott or Jonathan Bobbitt to reserve a consultation with a skilled Tennessee insurance disputes attorney at one of our offices in Nashville, Chattanooga, Memphis, and Jackson.