Posted By John Reilly

Insurance companies sometimes ask insureds who are making claims for "non-waiver" agreements.  These supposedly "protect everyone's rights" and some claim representatives tell insureds that these agreements are "required" even though policies (the contract between the company and the insured) do not require them at all.

Generally speaking, an insurance company conducting an investigation may have some concerns about whether there is coverage, the extent of coverage, whether the claim falls within the coverage, whether the claim is legitimate, and so forth.  When they have these concerns, the companies do not want the insured making a claim to be able to assert that the company has "waived" its right to contest coverage or any part of the claim. 

While the need for the insurance company to have this additonal protection is questionable, the time-honored method used by companies to comfort themselves with this supposed added protection has been to send the insured a "Reservation of Rights" ("ROR") letter.  The traditional ROR letter typically spells out the policy provisions that concern the insurance company and states that although the company is going to investigate the loss it nevertheless reserves all rights it may have to contest coverage, contest the claim or contest both coverage and the claim.

Issuing a ROR letter has often been found to be a "two-edged sword" for insurance compaies.  By their very nature, ROR letters alert insureds (and lawyers representing insureds) to the concerns that the company has about coverage or the claim.  Knowledge being a powerful thing, some insurance companies believe that this allows insureds to craft the information they provide or disclose to avoid loss of coverage.  The solution has been to try to get insureds to sign the "Non-Waiver Agreements" as these are bland, vague and typically do not specify the policy provisions or portions of the claim that are receiving heightened scrutiny.

From the point of view of the insured making a claim, unless a Non-Waiver Agreement is required by the policy or by the law in the state in which the claim is being made, there is generally no benefit to signing one of these agreements.  The insurance company is usually required to investigate the claim anyway - and to do so fairly and in good faith.  Insureds are required to cooperate with investigations and may not present fraudulent claims, but we believe they have a right to know the issues that need to be addressed. 

If asked to sign a "non-waiver agreement", insureds making claims should be aware that while in some instances the request may be nothing more than something that an adjuster does on every claim, it may signal that other issues can come up which may lead to a denial or limitation of coverage.  Consulting an attorney in your local area is a good idea if this happens.  Our firm has extensive experience dealing with insurance company investigations and can assist your local lawyer or help directly in those states in which we practice.  Contact John Reilly at (401) 272-2800 or through the web ( to discuss your concerns.

Posted By John Reilly

We handle numerous calls from potential and existing clients about their problems with City and Town officials.  A disturbing thing that seems to be reported with increasing frequency involves the use of message "texting" during board meetings and hearings. 

It works like this: Someone who doesn't like an applicant or petitioner is very friendly or may even have power over one or two board members.  This person will then either sit in on a hearing or meeting concerning the application (generally out of the way and toward the back) or watch on public access television (if available).  They then use "text" messages to communicate their thoughts, suggestions, etc. to their pal(s) on the board - all in an effort to help delay or defeat the applicant (or cause the applicant to have to spend more and more time and money until they give up). 

The motivation for doing this varies from jealousy to self-interest to just plain opposing anything and everything.  But regardless of motive, it is distressing to be hearing from board members that they look to their left or right and see a fellow board member reading text messages, look out at their friend and nod slightly, then deliver a stinging remark or ridiculous proposal to please their "pal".

So, the next time you are on a board or see board members looking down at laptop computers, "Blackberries", or other texting devices, think how it might be a good idea to ban them from use during these sessions.  Let their devious pals go back to giving signals like third base coaches in baseball.  Or better yet, report this type activity and help restore clean, honest government in our cities and towns.

And to all those who have been doing this, be forewarned that people are aware of these little "tricks" and someday you may have to explain why you did this before a judge and jury.

Posted By John Reilly

For many years our firm represented insurance companies and their "Special Investigation Units" (called "SIU"s).  Some states have mandated that insurance companies have SIU units, others do not.  Some companies hire and employee their own SIU investigators, some depend on independent investigators to do this type work for them.  And, of course, the type and quality of work varies greatly regardless of the type of SIU program that a company uses.  This is no different than what you will find with any and every trade or profession.

The vast majority of the SIU professionals are well-meaning and (in my experience) conduct themselves in a professional and courteous manner at all times (even when faced with irate claimants or witnesses).  Unfortunately, there are those who "cross the line".  When this happens, it often amounts to "bad faith" and can get an insurance company in serious trouble.

Eavesdropping (illegally intercepting telephone calls and other communications) is one example of "crossing the line" and "bad faith".  While not a common occurrence, I have had more than one experience with this unsavory tactic.

The first time that I heard about this was when a professional SIU examiner whose company was short on staff and used outside, private "investigators" was asked to interview some of these firms to see whether they should receive work.  He asked my opinion about several of the "candidates".  One of them really stuck out because they candidly BOASTED that they would sit outside the homes of claimants and intercept their wireless telephone communications to determine where these people were going, what they were doing, etc.  They then BOASTED that nobody would ever find out because their reports would say that any information they received from this illegal electronic eavesdropping would be attributed to unidentified "reliable sources".  This firm was NOT hired.

Another instance of this was when we accidently discovered an insurance company's internal notes, showing that one of its employed investigators had used a similar device (purchased at Radio Shack) to intercept calls of our client (a lawyer) while sitting in a car outside the client's home.  This SIU investigator never expected that his notes would have to be produced in discovery.  The result was a BIG EMBARASSMENT to his employer.  Our client decided to accept a confidential settlement that was paid over two years, but this incident reinforced the point that activities of this type are (unfortunately) more common than we would all like to believe.

One recommendation to help thwart the possibility of this type activity is to purchase and use a digital spread spectrum telephone if you use a wireless phone at home.  Another is to get a competent, bulldog attorney if your plans are described and attributed to a "confidential informant" in a report of the type we are discussing today.  There are other measures that can be taken, but these would expand this into a very lengthy article.  We would rather hear your thoughts (directly as most people do or in response to this blog).  Good luck and may your calls remain private.





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