The Road to Insurance Recovery
- Posts by Ronald A. ValenzuelaPartner
Ronald Valenzuela has been practicing in California for nearly two decades, representing clients, including Fortune 100 companies, in the aerospace, energy, pharmaceutical, and consumer products industries. He has counseled ...
Wildfires blazed through millions of acres along the West Coast this year, reportedly killing dozens of people, destroying thousands of structures and causing billions of dollars in insured losses.
Thirty-two years ago, a major California newspaper urged Californians to vote “no” on a ballot initiative commonly referred to as “Prop 65,” which would require certain businesses to include warning labels on products that contained a compound known to the State of California to cause cancer, birth defects or reproductive harm. However, the editorial board dismissed what it viewed as “exaggerated” claims by other opponents of Prop 65, reassuring voters that even if the measure passed, it would “not lead to the banning of ordinary table salt or require warning labels on every apple sold or cup of coffee served in California.” But last month, a California Superior Court judge ruled that businesses may have to do just that - require warning labels on cups of coffee served in California.
The complaint in the case, Council for Education and Research on Toxics v. Starbucks Corporation, et al., alleges that dozens of companies in the coffee business violated Prop 65 in failing to warn consumers that brewed coffee contains acrylamide, a substance believed to be a carcinogen by the State of California. Defendants in the case were previously unsuccessful in persuading the court that Prop 65’s warning requirements were unnecessary because the alleged acrylamide exposure posed “no significant risk.”
From the “Bomb Cyclone” winter storm that roared across the East Coast; to Hurricanes Harvey, Irma, Maria and Jose that exacted an enormous human, financial and business toll; to the California wildfires that killed 43 people, consumed 10,000 structures and devastated numerous wineries - it seems that we cannot escape news these days of disasters that have a deep and wide-ranging impact on lives, property, and commercial activity. We begin the New Year with a hope that we will see fewer, less severe disasters but also with the question in mind: “What can I do today to be prepared for a disaster that could affect my business?” Of course, a critical component of preparing for disasters is taking the necessary precautions to avoid or limit losses in the first place. But some losses may be unavoidable, so companies should also prepare ahead of time to maximize their recovery of insurance for the losses that do arise. Some steps to take that will help:
- Take the time to assess the types of catastrophic events to which your company might be vulnerable. Speak to those responsible for day-to-day operations and ask which type of losses or disruptions would be most costly not only to the immediate bottom line, but also in terms of intermediate or long-term displacement of the company’s competitive advantage or its reputation. Think outside of the box and do not constrain your assessment to the types of disasters that come easily to mind. It is those that we did not see coming, or the severity of which we underestimated, that we are least prepared for.
About this Blog
Lathrop GPM is one of the largest law firms in the United States representing policyholders, providing policyholders with the necessary guidance and legal counsel to handle everything from negotiating coverage and managing risk to litigating insurance disputes and recovery. The Road to Insurance Recovery blog is dedicated to helping readers better understand and manage the complexities of the modern business insurance policy.