Survey: 2015 Insurance Law

Survey of New York Insurance law for 2014–2015.

View Full PDF

Dan D. Kohane, a Senior Member of the New York law firm of Hurwitz & Fine, P.C., is a nationally recognized insurance coverage counselor who serves as an expert witness, and conducts extensive training, consultation, and in-house seminars on this highly specialized practice. Mr. Kohane is known in the industry for his comprehensive newsletter, Coverage Pointers, a bi-weekly publication summarizing important insurance coverage decisions. An accomplished trial lawyer and litigator, Mr. Kohane also has extensive experience mediating complex casualty and insurance coverage disputes. He teaches Insurance Law as an adjunct professor at the University at Buffalo Law School and heads the firm’s Insurance Coverage practice group.

Audrey A. Seeley, Esq. is a Member of Hurwitz & Fine, P.C., in its Buffalo, N.Y. office, where she focuses on insurance coverage, no-fault coverage, and SUM/UM coverage. Ms. Seeley routinely provides counseling to property-casualty insurers on a national and state basis. She also handles declaratory judgment actions in federal and state court across New York State. Ms. Seeley is the team leader of the firm’s No-Fault, SUM, and UM practice group. She is currently the Chair of the Insurance Law Committee of Defense Research Institute (DRI). Ms. Seeley has been recognized in Best Lawyers of America, Who’s Who in the Law, and has been named in the Upstate New York Super Lawyers list.
The authors wish to specially thank Mr. John R. Ewell, J.D., University at Buffalo Law School, 2016, for his dedication and assistance with this Survey.

New York State Senate Passes Bill to Accommodate Ride Sharing Apps, but the Assembly Will Not Follow

—by S. Alex Berlucchi

Sources: S.B. 4280, 238th S. Sess., 2015-2016 Reg. Sess. (N.Y. 2016); Mike McAndrew, Senate Passes Uber in Upstate NY Bill, but Assembly Expected to Balk, Syracuse.com, 1, 1 (June 17, 2016) http://www.syracuse.com/state/index.ssf/2016/06/senate_passes_uber_in_upstate_ny_bill_but_assemby_expected_to_balk.html

Abstract:  The New York State Senate passed a bill to allow “transportation network companies,” such as Uber and Lyft, to operate in areas of New York State outside of New York City.  Presently, concerns for the safety of the passengers and the insurance requirements for the drivers are causing debate within both the Senate and the Assembly.  While this bill passed in the Senate, it is not likely to pass in the Assembly.  Facing political pressure from Governor Andrew Cuomo, a resolution to the prohibition of ride-booking companies is imminent.

***

The New York State Senate passed a bill allowing “transportation network companies” such as Uber and Lyft, to operate in New York State.  Currently, these companies are only legally allowed to operate in New York City.  Ride-booking companies received an exception to operate in New York City, and the convenient, trend-setting ride services are advocated as an improved means of public transportation.  While this bill did pass in the Senate, the Assembly is reluctant to follow suit.

Senator James Seward (R-Oneonta) sponsored New York Senate Bill 4280, which passed in the Senate Insurance Committee.  The bill would require a minimum of one million dollars in liability coverage whenever a drive has a “paid passenger in their personal vehicle.”  When there are no riders, the Bill similarly mandates minimum coverage, totaling $200,000.  This minimum is higher than the minimum insurance requirements for taxi cab drivers in local municipalities, such as Utica, thus demonstrating an effort to maintain the current taxi cab industry while allowing “transportation network companies” to spread to other cities in New York.  Furthermore, this Bill allows for local control over all other issues, such as accessibility and requirements to act as an independent contractor.

This bill passed, in the Senate, despite strong opposition from the traditional taxi cab and limousine industry.  Similar to protests seen in New York City, allowing ride-booking companies to operate in cities such as Syracuse, Buffalo, and Rochester will have a detrimental effect on the cab industries in these respective localities.  For example, currently only 200 taxi cab licenses are issued, and all 200 are currently taken.  An influx of transportation options may lead to increased litigation with the taxi cab industry; however, there are two issues with the Bill as presently written.

The first issue is a lack access to “transportation network companies” for individuals with disabilities.  Presently, of the 30,000 independent contracts operating in New York City, there are zero vehicles which are wheelchair accessible.  This will be an issue for passing a law in New York, as the Assembly has placed an emphasis on handicap accessibility, as well as safety of the passengers.

In the Assembly, the parallel bill to New York Senate Bill 4280 includes higher mandatory minimum levels of insurance coverage.  There is also an express need to perform background checks on the drivers, in the interest of public safety, and a mandate for handicap accessibility.  These provisions were not included in the Senate version of the Bill.   Therefore, the Assembly is unlikely to resolve these issues.

This conversation began in the New York State Legislature more than one year ago.  Gov. Andrew Cuomo spoke to the positive aspects of ridesharing, or ride-booking, as a rapidly expanding business.  As a growing aspect of the technology industry, these “digital networks” provide a valuable service both to citizens of New York, and tourists who may be visiting.

Despite the benefit, the State Legislature is divided on the interests of public safety, and the autonomy provided to local governments will still be a barrier in allowing “transportation network companies” to operate.  The Assembly is not likely to pass the current bill as it is written.  In addition, while the Senate focused on insurance minimums to pass the Bill, the Assembly will need to resolve more issues before proposing a Bill which may be duly considered.  Based on the public response, this discussion is unlikely to resolve itself during the current session.

Recently Introduced Bill Provides Data Breach Insurance Tax Credit

—by Adam Koulish

H.R. 6032, 114th Cong. (2016) (as referred to H.R. Comm. on Ways and Means, Sept. 14, 2016).

Cybersecurity Framework FAQs Framework Basics, Nat’l Inst. of Standards and Tech. (last visited Sept. 25, 2016), https://www.nist.gov/cyberframework/cybersecurity-framework-faqs-framework-basics.

William H. Latham, Does Your Company’s Data Breach Insurance Coverage Measure Up?, Lexology (Jan. 21, 2016), http://www.lexology.com/library/detail.aspx?g=13ae8c51-5eb8-42f6-8f1c-7e04fa346463.

Abstract: A bill, H.R. 6032, the Data Breach Insurance Act, has recently been introduced to the House Ways and Means Committee. If passed, the bill would allow businesses to claim a tax credit for the purchase of qualified data breach insurance.

***

As data breaches or “hacks” of businesses happen at an increasing rate, the purchase of data breach insurance has become a necessity for businesses of all sizes. In an effort to lessen the burden and incentivize such a purchase, a bill was assigned to the House Committee on Ways and Means on September 14, 2016 that would amend the Internal Revenue Code of 1986 to provide a tax credit to businesses that purchase data breach insurance. H.R. 6032, the Data Breach Insurance Act, would provide a credit amount equal to 15 percent of a business’ aggregate premiums paid or incurred during the taxable year for qualified data breach insurance. Being a recently introduced bill, there is a high likelihood of it being amended before it even reaches the House floor. There is also a distinct possibility that the bill will not be passed.

For the purposes of this bill, qualified data breach insurance is “coverage provided by an insurance company for expenses or losses in connection with the theft, loss, disclosure, inaccessibility, or manipulation of data.” Typically, there are two main types of claims associated with data breach insurance coverage. There are third-party claims such as legal defense if sued by a customer whose data was exposed, and there are first-party claims such as the various IT and public relations responses needed to mitigate the damage of a breach. Ideally, a data breach insurance policy would cover both types.

A business wishing to receive this credit must have adopted the Framework for Improving Critical Infrastructure Cybersecurity (FICIC) as set forth by the National Institute of Standards and Technology or any similar standard prescribed by the Secretary of Homeland Security and the Secretary of Commerce. Simply put, the FICIC is voluntary guidance that helps businesses manage and reduce their cybersecurity risk. It also establishes common terms used in cybersecurity risk management to facilitate easier communication between entities inside and outside the business.

In claiming a credit for qualified data breach insurance, the charge for such insurance should be separately stated from other types of insurance in the contract or specified on a separate statement. Also, the charge for qualified data breach insurance should not be unreasonably large in comparison to the rest of the insurance contract. The premiums paid for this insurance will only qualify for the tax credit “if such premiums are paid or incurred in the ordinary course of the taxpayer’s trade or business.” Although since data breaches can happen to almost any business, this should be an easy requirement to satisfy. Lastly, in its current form, the bill provides for credits claimed in the five years after its passage.

Survey: 2014 Insurance Law

Survey of New York Insurance law for 2013–2014.

View Full PDF

Dan D. Kohane, a senior member of the New York law firm of Hurwitz & Fine, P.C., is a nationally recognized insurance coverage counselor who serves as an expert witness and conducts extensive training, consultation, and in-house seminars on this highly specialized practice. Mr. Kohane is known in the industry for his comprehensive newsletter, Coverage Pointers, a bi-weekly publication summarizing important insurance coverage decisions. An accomplished trial lawyer and litigator, Mr. Kohane also has extensive experience mediating complex casualty and insurance coverage disputes. He teaches Insurance Law as an adjunct professor at the University at Buffalo Law School and heads the firm’s Insurance Coverage practice group.

Audrey A. Seeley is a member of Hurwitz & Fine, P.C. in its Buffalo, New York
office, where she focuses on insurance coverage and no-fault coverage. Ms. Seeley routinely provides counseling to insurers on a national basis for personal and advertising injury coverage issues and on primary and excess personal lines insurance policies. She also handles declaratory judgment actions across New York State. Ms. Seeley is the team leader of the firm’s No-Fault practice group and also provides No-Fault insurance coverage advice to insurers. She is currently the Chair of the Insurance Law Committee of the Defense Research Institute (DRI). Ms. Seeley has been recognized in Best Lawyers of America, Who’s Who In the Law, and has been named in the Upstate New York Super Lawyers list.

The authors wish to specially thank Ms. Jocelyn Michele Seitter, University at
Buffalo Law School, J.D. Candidate 2015, for her dedication and assistance with this Survey.

Survey: 2013 Insurance Law

Survey of New York Insurance law for 2012–2013.

View Full PDF

Dan D. Kohane, a Senior Member of the New York law firm of Hurwitz & Fine, P.C., is a nationally recognized insurance coverage counselor who serves as an expert witness and conducts extensive training, consultation, and in-house seminars on this highly specialized practice. Mr. Kohane is known in the industry for his comprehensive enewsletter, Coverage Pointers, a bi-weekly publication summarizing important insurance coverage decisions. An accomplished trial lawyer and litigator, Mr. Kohane also has extensive experience mediating complex casualty and insurance coverage disputes. He teaches Insurance Law as an adjunct professor at the University at Buffalo Law School and heads the firm’s Insurance Coverage practice group.

Audrey A. Seeley, Esq., is a Member of Hurwitz & Fine, P.C., in its Buffalo office, where she focuses on insurance coverage, no-fault coverage, and municipal law. She writes a column on national developments in insurance coverage for the firm’s e-newsletter, Coverage Pointers, and is currently the Vice Chair of the Insurance Law Committee of the Defense Research Institute (DRI). The authors would like to thank Jennifer A. Ehman, Esq., and Brendan Roche for their assistance with this Survey.