Bach Talk: Preserving the promise of liability protection

I had the privilege of working with Gail Hillebrand in the early 90’s when she was a Senior Attorney in Consumers Union’s West Coast regional office.  Our offices were in the same building, and I was representing Voter Revolt (the predecessor to Consumer Watchdog) in implementing Proposition 103.  Gail is in the top tier of informed and effective advocates for consumers of financial services  – and it’s no surprise that she was one of the Consumer Financial Protection Bureau’s first hires. When she recommended me to be an adviser to the American Law Institute’s Principles of the Law of Liability Insurance Project in 2010, I was honored but curious:  Would this academic project be too “ivory tower” to help the insurance consumers United Policyholders serves? Would it only involve issues that impact large commercial policyholders – or would the full spectrum of insureds benefit from our participation?

Six years, countless drafts, plane trips to Philadelphia and conference calls later – it’s clear that Gail was right:  The ALI project is important to policyholders and has been well worth the time and commitment that I and UP have invested.  Not only have I and other policyholder-oriented advisers successfully fended off numerous attempts to slant the treatise in favor of the insurance industry…We’ve been able to keep the reasonable expectations of all liability insurance policyholders front and center in the drafting deliberations.  After all – no matter how small or big you may be – getting sued is scary and expensive, and you want your liability insurance to kick in and protect you. You want your insurance company to have your back and guide you, get you out of the mess as quickly and cheaply as possible.  That’s the promise they made when they cashed your premium payments.  That’s what the Restatement should preserve.

When the ALI Project morphed into a more formal Restatement of the Law of Liability Insurance Project, it became even more important.  The final product will have a major impact on insurance consumers for decades to come.  Courts rely heavily on the legal principles set forth in Restatement treatises when evaluating coverage and claim disputes. It is critical that it be an appropriate reflection of the best-reasoned decisions that accurately set forth the interpretation principles that apply to liability insurance policies and insurer’s obligations.

Further Reading:  See “You’ve been sued, now what do you do

UPDATE 2017: