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TexLaw
TexLaw, Attorney
Category: Business Law
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Experience:  Internationational Commercial Attorney
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Insurance: Business has a crashed server which Insurer has

Resolved Question:

Insurance:
Business has a crashed server which Insurer has agreed is a covered item for equipment, restoration of data and loss of business.

The other part of the policy is business liability with vastly higher and different limits and clauses. Company may have breached contracts because it was unable to provide items for resale (shares of stock on a convertible note) in saleable form (as defined by the contract) that it contractually was supposed to provide. No, company is not in the "business of selling stock, it's merely a small public business). Company is being sued, with damages claimed as full amount of convertible note and penalties.

Question: If the event (server crash) was already agreed upon by the Insurer to be covered (replacement, restoration, loss of business), does it by definition then de facto fit the definition of a covered event in the liability policy for breaches of contracts that ensue from the event?
Submitted: 1 year ago.
Category: Business Law
Expert:  TexLaw replied 1 year ago.
Hi,

Thank you for your question.

A determination of coverage under the business property portion of the policy does not automatically trigger business liability coverage in connection with the damaged property. In other words, the coverage determinations are made independently of one another.

From your description of the events though, and given I have not read your policy, I would think that the suit would be covered.

Has the insurance company denied coverage?
Customer: replied 1 year ago.

That was the single fastest response I've ever seen -- and thought out, too.


 


They are paying preliminary amounts on the loss of business/equipment/restoration side. They haven't given them all their requested information yet due to harmed data, but someone is being hired to get that done, the work of which Insurer is paying in advance for. That said, once they determined the event was covered (after months of their investigation), they've been wonderful.


 


They know an analysis is being done about what to do about a claim on the liability policy, as some questions about it have been on email. That part of the claim has not been made yet, as the company wants first to figure out it coverage.


 


The policy has terminated, but the events and initial claim were made when the policy was in place. That said, it's not a claims based policy.

Expert:  TexLaw replied 1 year ago.
Thanks, XXXXX XXXXX my fair share of coverage opinions, so I'm familiar with these issues.

You have stated that the company has been sued. Has the insurance company agreed to offer a defense under a "reservation of rights" letter, or are they forcing the company to defend and waiting to issue a coverage opinion before entering the defense?
TexLaw, Attorney
Category: Business Law
Satisfied Customers: 4071
Experience: Internationational Commercial Attorney
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