This and That by Dennis Wade

In construction, premises, products, in just about every matter that comes across our desks as coverage or defense counsel, our first question is this: “How can we spend OPM?”  OPM, you ask?  It’s an acronym for “OTHER PEOPLE’S MONEY.”

The first question is does the insured or insurer have indemnification from some other entity.  An indemnity agreement is a promise to pay on behalf of someone else for the defense, settlement, judgment or any other obligation.

The next critical question is does the “OP” have insurance to back-up the promise to pay.  And, as a corollary, another is whether our client had the good sense to require an Additional Insured Certificate from the OP?  But quality risk management requires a further step:  Demand sight of the OP’s policy under which the AI Certificate has been issued.  What good is it to be an AI if the underlying OP policy has an exclusion for the very risk at issue?

The next question is to analyze the scope of the indemnity.  In other words, what triggers the indemnity obligation.  This question turns on how the matter is pleaded and is highly fact-specific and way beyond the scope of this post.

Finally, when we press indemnity obligations to OPs, I am always reminded of the classic dialogue from the Godfather in which Consigliere Tom Hagen is trying to persuade fictional producer Jack Woltz to cast the “Frank Sinatra” character into what was to become the film From Here To Eternity:

                     Tom Hagen:

                                    Mr. Woltz, I’m a lawyer, I have not threatened you.

Jack Woltz:

I know almost every big lawyer in New York, who the hell are you?

Tom Hagen:

I have a special practice.  I handle one client.  Now you have my number.  I’ll wait for your call.  By the way, I admire your pictures very much.

Press those tenders. But do so with professional civility (no “horsing” around).

And that’s it for this This and That.