Changes. I should have mentioned in both Part #1 and Part #2, that there have been changes in the so called "real"-world insurance policies, and there will be changes in the "cyber-worlds" or "cyber-space," policies. The terms "cyberspace," "cyber-world," or any synonym are not intended to be restricted to "virtual world," although the concept of "virtual world" are included in them.
In theory, at least, an insurance policy could be restricted to one or more"virtual world(s)," instead of cyberspace. In the area of insurance, if something can be done in theory, it is likely to be done in practice.
Some of the former types of policies, "real world" policies have taken years to change, at least when the policy started using a form for the main part and then attaching endorsements. In fact, as to true content, more than one policy has taken 100 years or longer to change the commonly used central ideas, e.g., what was insured, what was not, and what was excluded, not to mention terminology, e.g.,
"accidence" changed into "occurrence."
Cyber-world insurance policies will also undergo change, and they will probably go much faster, since the technology is and will change much more rapidly. These changes are not those between a 1936 Chevy and one from 1947. They are and will be much larger, and their use is changing at "breakneck" speed.
Cyber-insurance may presently found many sorts of existing policies: homeowners, commercial building owners, some forms of liability insurance, health insurance, and many more. Usually this is done by endorsement.
Of course, lots of insurance attending to the cyber-world will not change. The draftsmen of the policy will have gotten it right the first time, and/or there haven't been relevant changes in that which is being insured. This is extremely unlikely in any amount of time aside from a short one. Some cyberspace "objects" will cause damage or injury to tangible objects to be found in the world outside the cyber-world, e.g., human bodies and other types of objects such as wooden objects. That is likely to be controlled by today's insurance, with new exclusions as needed (or wanted).
Insurance coverage lawyers working on cyber-space problems will not change much: corporate law, real estate, patent law, parts of patent infringement law (maybe), the law regarding other types of intellectual property, directors and officers insurance, insurance for accountancy, and so forth. Of course, some of the types of patents lawyers work on are changing, and the ideas will as well, but the basics of filing patents, obtaining them, and then disputing them probably will not, at least not much.
The laws of and the rules of civil procedure may not change much. Parts of the law of evidence may change enormously, as will the context of educating client, judges, and juries. Still, the general principles of rhetoric will not; though for a time, explaining things to judges, juries, and each other will be more difficult. See Bragg v. Linden Research, Inc. & Rosedale, 487 F.Supp.2d 593 (E.D. Pa., 2007). (This was an opinion on several "virtual reality" issues using established procedural law. "Bragg contends that Defendants, the operators of the [relevant] virtual world, unlawfully confiscated his virtual property and denied him access to their virtual world. Ultimately at issue in this case were the novel questions of what rights and obligations grow out of the relationship between the owner and creator of a virtual world and its resident-customers. While the property and the world where it is found are 'virtual,' the dispute is not.")
Some parts of the nature and rules of professional practice for lawyers may also change, so far as content is concern. Lawyers are now worried about their use of the "cloud" and their obligations to keep client information confidential. No doubt other existing professions will have similar additions an new twists.
Governmental Regulation of Insurers. It took a century or so for government regulation to develop to where it is now for he insurance industry. Such regulations are already there for application to the cyber-world, but it will also develop far faster than it did for real-world insurance. New government regulations of insureds will be necessary, since there is a new sets of immaterial "objects" to be insured together will combinations of them and their uses by insureds. The extent of regulation may increase or diversify. I would not be surprised to see more insurer regulation shift to the federal government. At the same time as these changes take place, some modes of regulation will not change. State governments will still require some types of insurance to submit to substantial regulation of various types. State approved insurers will still have to use some state approved forms (when they exist). And surplus lines used in cyberspace insurance, will be required to deal with departments of insurance in different ways and diminished ways from those of approved carriers and to different degrees.
Insurer Regulation of the Cyber-World and Its "Relative," the Virtual-World. Let us start with an example from the insurance of yesterday and today. Insurers often insist, as an antecedent condition of issuing a policy, that an organization, group, and/or a person either have something or not have something, before they will insure it, them, or him/her. Here is such a provision: country clubs, municipalities, and schools are often required not to have high diving boards for their swimming pools, before a company will insure them for potential liabilities. Not having filed more than Y number of lawsuits and/or not having more than Z lawsuits filed against it, is another. These kind of insurer created regulations are often placed in the application for insurance; then, the application and the answers are made part of the insurance.
It seems obvious that cyber-space and the virtual world will create a whole new and larger group of necessary conditions like these.
To the extent that these kinds of requirements (or others) are to be found in insurance contracts, the insurer will be regulating the market and other behavior of virtual reality and its economic side.law, other kinds of ownership law.
Obviously, some of my assertions abut the future of cyberspace insurance are at least somewhat speculative. We shall see.
Tuesday, March 26, 2013
Friday, March 22, 2013
Cyber-Insurance & "Established Insurance" Compared--PART #2
Cyber-Insurance & "Established Insurance" Compared--PART #2
Michael Sean Quinn, Author*
Michael Sean Quinn, Author*
See below
THESIS: THE SCOPE OF MOST CYBER-INSURANCE POLICIES WILL RESEMBLE--AFTER TOPICAL ADJUSTMENTS--CURRENTLY EXISTING POLICIES. THIS WILL BE TRUE AS TO SUBSTANTIVE IDEAS, EVEN AFTER NECESSARY SUBSTANTIVE ADJUSTMENTS ARE TRIED, CONTESTED, ALTERED, AND RENDERED REALLY USABLE. THERE WILL BE FIRST-PARTY COVERAGE (ANALOGOUS TO PROPERTY INSURANCE AND CASH FLOW INSURANCE, ETC.), AND THERE WILL BE THIRD-PARTY COVERAGE, i.e., LIABILITY INSURANCE (ANALOGOUS TO CURRENT LIABILITY INSURANCE. PART OF THE REASON FOR THIS, IN THE CASE OF LIABILITY INSURANCE IS THAT THE CATALOGUE OF ACTIONABLE TORTS WILL REMAIN, TO A CONSIDERABLE DEGREE, ROUGHLY SAME AS IT IS NOW, WITH SOME SIGNIFICANT ADAPTATIONS. TORTS RESTRICTED TO TANGIBLE PROPERTY WILL BE MODIFIED. THE LARGEST CHANGES WILL BE WHAT SORTS OF DAMAGES WILL BE COMPENSABLE AND HOW CARRIERS WILL TRY TO CALCULATE HOW MUCH IT WILL PAY, IF ANYTHING.
All insurance involves the transfer of risk(s). One party (or one group of parties) obtains value protection in from losing--in some matter--something valuable. This loss can come about in a variety of ways: a ring is stolen, a key is permanently "misplaces," a whole set goes now the sewer, a building burns down, a person sustains bodily injury from a doctor who operated on he wrong wrist, a medical bill that has to be paid, a debtor hasn't paid a bill, and so forth. No all protections from risks are insurance; the use of a security interest, for example, in loan transaction, illustrates this point. Not everyone who has some sort of transactional assurance of little to no loss, has insurance. Interestly in England, some of what are uniformly called "insurance policies" in America are sometimes called "assurance policies," and what are called "insurance companies" in the United States can be calle "assurance companies" or "assurance syndicates" in the U.K. Some might say that surety agreements are not insurance, but that would be a mistake.
The same will be true of cyber-insurance: if a bank makes a mistake; customers identities are stolen;
the customers sustain actual damages then the bank may be liable and be obligated damages. Some cyber insurance policies may cover the loss. The bank's customers may be insureds, or the bank may be the insured. If only the bank is the only insured, the policy is probably a liability policy or contain a relevant part. (Sometimes policies are "packages," and so contain several different kinds of insurance.)
Many liability policies are "occurrence" policies, while others are "claims made" policies. Which one of these a cyber-liability is will have enormous effect on what is covered and what is not.
Many policies include a duty incumbent on the insurer to defend the insured in case he insured is a defendant in litigation. Today, the cost of defense eats up the amount of coverage reduces the monetary size of the policy; and sometimes it does not.
It would be surprising if most cyber-liability insurance policies were not "claims made" type policies, and it is very likely that the policies will be designed so that defense costs eat up and thereby reduce the amount of insurance available to pay the actual loss inflicted on the person claiming a compensable loss.
(A key part of the insurance vocabulary for this distinction is "duty to defend" and "duty to indemnify. The second of the two duties isn't exactly what it says it is, but the use of the phrase "duty to indemnity" is more than100 years old. It was right then but not now.)
A number of tort cases have been brought against different kinds of parties for permitting identity theft. At least usually, these cases are lost because the plaintiffs, those whose identity was stolen, have not sustained actual material losses Mental anguish without some "genuine injury" (usually physical but sometimes economic only) is not counted as actionable losses. See Stephen J. Rancourt, Hacking, Theft, and Corporate Negligence: Making the Case for Mandatory Encryption of Personal Information, 18 Tex. Wesleyan Law Rev. 183, Section II (2011) (helpful list of identity theft cases lost with none won). See Hammond v. The Bank of New York Mellon Corp., 210 WL 2643307 (S.D. N.Y. 2010). (containing a long list of influential cases where theft of identity cases dismissed since not actual damages).
Most insurance depends upon and requires fortuity. Most events, the occurrence are not fortuitous, from the point of view of the insured, are not insurable. Arson is not insurable if the policyholder starts a fire in his own building. If I throw my keys down into the sewer, the values of the keys are not insurable. If A deliberately burns down the building of B, A's third party liability carrier may not cover B's loss, but B's first party insurance may. If might very well, however, pay A's defense costs.
These points illustrate the difference between most third party insurance, on the one hand, and first party insurance on the other. A's liability insurance is third party insurance, whereas B's insurance on his stuff, his cash under he bed, or health coverage on himself is first party insurance.
Not all insurance requires fortuity. This coverage is very narrow, indeed tiny. Life insurance usually covers some types of suicide. The type in question is suicide that occurs some time after the commencement of the policy. That period is usually two years. I cannot think of an analogy in cyber-insurance. Of course, life insurance itself will be involved in cyber-insurance arrangements, but it will probably the same there and then as it is here and now.
Most liability insurance is linked to torts; most cyber-liability insurance is already and/or will be like that. Some current policies are linked to breach of contract; creditors insurance is like that. Some policies cover breaches of contract are included in "mostly-tort-based" liability policies, but not always. The opposite is also true; there are "mostly-contract-based" policies, and some of them include a few covered torts.
Also arising out of contracts, there are sometimes tort liabilities. Breaches of the duty of good faith and fair dealing found in all contracts are sometimes considered torts. If A breaches a contract with B and then breaches the contract, but by the breach physically injures B or injures C in some way or another, there may be a tort between A and C. There will probably be coverages like this, although cyber- liability insurers will exclude as much as they can of these configurations, or try to pass them off on other insurers, such as standard liability insurance available today.
Most of the torts existing now will, as is, or as adjusted, will be spread across the "cyber-field." (I am ignoring damages caused to physical objects or the human body (a form of physical object, since tey are now covered). Here are at least some examples tort theories that will transposed across the "physical" or "real" world to the "cyber" or "virtual" world.
- negligence: This is the failure of an insured to do what a normal and prudent person would do under the circumstances or fail to conduct himself in accordance with the standard of care that is generally accepted given the situation (What counts as damages, what is compensable under insurance policies, and how the size of covered damages are calculated may all be different.)
- defamation
- invasion of privacy
- interference with contract
- interference with economic position
- strict liability (necessary adaptations replacing the requirement of there being liability only if a physical object--like a toaster--is at least part of the so-called proximate cause)
- nuisance
- fraud
- misrepresentation
- errors an omissions type torts (These are really a kind of negligence, at least usually. But they are specialized):
- lawyers
- accountants
- brokers of various sorts
- third party managers, administrators, and/or quasi-agents (Some insurance adjusters are like this.)
- designers of
- codes, etc.
- encryptions, etc
- firewalls and similar devices
- similar safety measures
- simplicity
- intellectual property torts: wrongful use, wrongful acquisition, wrongful imitation, etc. Imagine using computer hacking to obtain a patented plan for something, then destroying the owners plan, an then putting the plan to one's own use
- and the list goes on for a long time.
In terms of adjusting, altering, changing, and revising cyber-insurance, first party coverage will be treated and work much the same way. It will still, almost certainly turn on the insured having a property interest--or something like it--in that which is insured.
Michael Sean Quinn, Ph.D., J.D., C.P.C.U. . . .
The Law Firms of Michael Sean Quinn et
Quinn and Quinn
1300 West Lynn Street, Suite 208
Austin, Texas 78703
(512) 296-2594
(512) 344-9466 - Fax
Thursday, March 21, 2013
Cyber-Insurance aka E-Commerce Insurance--Part #1
Cyber-Insurance aka E-Commerce Insurance--Part #1
Michael Sean Quinn, Author*
This is the first "chapter" in a string of blogs focusing on cyber insurance. This one will concern the look of "yesterday's" policies--the ones use for a log, long time--and the look of a branch of "tomorrow's, that is, the cyber policies. Actually, the two groups will look remarkably alike in organization. When you think about it, "Really? How could it be otherwise?"
The next chapter will concern some aspects of substantive similarity. Other blogs will list an very briefly sketch some of current available policies. Somewhere along the way, there will be some definitions and some explorations or explanations of such. Most significantly, there will be chapters discussing the contents of a few actual cyber insurance policies.
There is not much meaningful, focused, or informative publications about cyber-insurance. (That is the name-phrase that will be used here; it has mostly replaced the term "E-Commerce.") Most available writings are really ads of some sort for somebody some are attorney firms publicizing themselves an conjecturing about the future; and there some panel discussions which would probably interest almost no one really interested in the nature of the type of insurance. Another category of the prevailing literature are the pieces written at law firms. Much of this is a law firm advertising its services, though sometimes that is combined with guesswork or speculations about how cyber-insurance will develop.
There are a few specimen policies issued by some of the best insurance companies, but they do not provide meaningful discussion. A book published on this topic, and it is the only one so far as I can see, is by George S. Sutcliffe entitled E-Commerce and Internet Risks, Laws, Loss Control, and Insurance (Standard Publishing Corporation, 2001). It has a helpful essay, which includes far too many diverse topics. The appendices, however, have a glossary, a summary of some policies, and some specimen policies. So far as I can tell, this is the source book.
No doubt, one of the reasons the absence of detailed study of the dimensions of cyber-insurance is that there are almost no--or even no--reported cases involving coverage disputes. (I for example, I have yet to find one such case on WestLaw; and law reviews have no informative discussions of the matter. This is not to say that there are no cyber cases--for example, cyber tort cases--that are without hints. Several large law firm members have told me that their firms each have a dozen or so cases, but they also say that none are in or close to litigation.
There is also one ("WestLaw-'reported'") case involving identity theft in which a bank offered, among other thinga free identity theft insurance up to $25,000.00 to its customers as part of a remedy following an identify theft incident. Alas, the plaintiff class rejected the offer. Hammond v. Bank of N.Y. Mellon Corp., 2010 WL 2643307 (S.D.N.Y., June 25, 2010). (Of course, one can see why--if a plaintiff thought s/he might be at the door of big damages--would reject a $25k settlement.)
So far as I can tell, in all court decided cases (thus not including settlements, if any) involving identity theft, the plaintiffs have lost. For a survey and discussion of these cases, see Stephen J. Rancourt, Hacking, Theft, and Corporate Negligence: Making the Case for Mandatory Encryption of Personal Information, 18 Tex.Wesleyan Review 184, 187-199 (Winter, 2011). There is a very recent case in which the plaintiff had not yet experienced a loss, but for that reason only, could still proceed if their injuries were not entirely speculative and not off in the far distant futher. This matter is calle a matter of "Standing" under federal court jurisprudence. In re SONY GAMING NETWORKS AND CUSTOMER ATA SECURITY BREACH LITIGATION, _____ F.Supp. ____ (S.D.Cal. 2012)(2012 WL 4849054). Most of the case was dismissed on other grounds, but actual already existing injury is not an iron-clad requirement for a right to proceed, at least under some circumstance.
Now, before I turn to the analysis of policies and make conjectures, aka guesses, as to what their difficult sections might mean, I start with a few fundamentals for the insurance novice. These come from general insurance sources, and therefore are not special when it comes to cyber insurance. At one basic level, insurance is insurance, and so are some other contracts e.g., bonds and ancient bottomtry arrangements. So let's begin.
Virtually all primary insurance contracts have roughly the same form. Excess and umbrella policies do not necessarily, but they often incorporate significant, if not all, provisions found in the primary policy. Contracts of reinsurance, although they are contracts of insurance, do not follow the same formula. Here, in broad strokes, is a sketch of common sections. Often different principal sections are identified by the names I use here and by roman numerals.
I. Declaration Page (or Sheet). This part includes the name(s) of the actual insurer and the name(s) of the policyholders. Often it sets forth the premium, the name of the intermediary, policy limits, etc. Sometimes they have charts or columns, and the policy includes that which is checked off. The deductible is specified or set up, as is co-insurance, if any. Other named insureds may be named elsewhere.
II. Insuring Agreement. This parts sets forth what is insured, i.e., a particular vehicle, a particular building, physical objects, one or more banquets, particular weddings, works of art, and so forth.
These agreement are usually for liability (3rd party coverage) or for things, e.g., belonging to the insured (1st party coverage.) The agreements usually do not recite a fundamental principle of insurance and that is fortuity. This is an axiom. Deliberately caused injuries or damages are not covered; arson is not covered; physically smashing something up deliberately, e.g., a computer, fraud, and so forth. Intentional acts are covered, so long as the loss was not. There is insurance for those driving too fast, but not if they deliberately run over or smash into something.
Sometimes insurance policies offer both liability and first party insurance, often covering physical property. Sometimes the first party insurance may cover abstract properties, and this is true in the area of cyber insurance, in addition to business loss and trade credit insurances. Bottomry was like this 3000+ years ago.
III. Definitions. There is usually an indication that there are definitions to be found in the policy: quotation marks, bold lettering, italics, etc. Sometimes there are only a few definitions; sometimes, as in many cyber policies, the number is much larger than most current policies. Often, at least to the lay person, the definitions are obscure. (This is not necessarily a matter of great consequent, since definitions in engineering malpractice policies are also quite difficult for the lay person--so much so that expert witness often have to be used for the benefit of the jury.)
IV, Exclusions, This sets forth what the insurance contract does not cover. Of course, there are exclusions quietly built into Insurance Agreement, but this is generally not recognized. The list of exclusions can be relatively short, or it can be quite long, as it is in most cyber insurance policies, especially packaged policies.
Policyholders have to prove that they meet the requirements of the relevant Insurance Agreements. Carriers have the burden of proof regarding exclusions; the burden shifts back to the insureds when there are exceptions to the exclusions.
The content of many exclusions in cyber-insurance policies are likely to be substantially different, since there will be few or no tangible objects or situations to exclude. (None like this: "We do not exclude the damages caused by your pets eating your bushes.")
V. Conditions. The are usually condition precedents and there are a few condition subsequents. Among the best known of the conditions are the insureds duty to cooperate in the adjustment process and their duty of remediating losses, that is, using reasonable efforts to keep those losses from getting worse (e.g., things like storm damaged buildings) from getting any worse.
Some requirements, which are listed in the "Conditions" section, are not conditions at all but covenants, i.e., promises. Timely notice of covered events is often not really a condition but a covenant, i.e., promise. The requirement of cooperation may be like that. Remediation is perhaps not a condition or a promise irrespective of what the policy says, and so forth.
It is not completely determined what contractual requirements are actually conditions and which are not. Nevertheless, some other common obligations usually classified as conditions are these: subrogation rights, some features of contract termination, some features of cancellation, assignment, status of other insurance, and more. Arguments about what is a condition precedent (or subsequent) versus what is a "mere" promise, are not uncommon, and the truth is not determined by the name of the section. Just because something is found in a section entitled "Condition" does not mean that it is a condition.
VII. Endorsements. There can be all sorts of endorsements: adding insuring agreements, cutting them, deleting or adding exclusions, adding or subtracting named insureds from the list, adding insured objects, things, or whatever, and much more. For standard policies, there are closets full of standardized endorsements. In large innovative industries, there will be negotiated policies, but not for long. Purely negotiated policies make profitable underwriting nearly impossible.
VIII. Miscellaneous. A whole variety of things can fit here.
This simple list gives one a beginning idea, at least, as to how insurance policies are divided divided up. The ordered list of entries are not intended to name the order of parts of the policy. Often, for example, the definitions section comes between the Insuring Agreement Section and the Exclusions Section.
It also needs to be remembered that some policies are "package" policies, meaning that they provide several different types of insurance all at once, in the same contract. First and Third Party insurance often appear like this, e.g., in auto insurance, in home owners insurance, and in different large policies. Usually the differences are easy to recognize.
There is no reason to think that cyber-insurance policies (that is, contracts) will be much different in form. Rough versions of similar forms run back hundreds of years.
Michael Sean Quinn, Ph.D., J.D., c.p.c.u. . . .
The Law Firm of Michael Sean Quinn
Quinn and Quinn
Quinn and Quinn
1300 West Lynn Street, Suite 208
Austin, Texas 78703
(512) 296-2594
(512-656-0503
(512) 344-9466 - Fax
Friday, March 8, 2013
Creations and Insertions into Existing Contracts Part II
In my last blog on insurance law, I discussed the idea that it is not possible to create formerly non-existing clauses or coverages in an already existing policy, i.e., insurance contracts. I wrote on only what is all, or virtually all, the problem, namely, when the insured criticized for having tried to (or having blundered into) perform such a creation.
Here in Part II, I turn to the insurer. The other day, in a deposition, I was asked whether I had ever heard of the axiom that "Insurers cannot create coverage in their policies." I said that I had never heard of that axiom applied to insurers and that, in any case, the axiom would depend on what the word "creation" meant and what the invoked idea was.
She, the taker of the deposition, looked at me with a combination of of astonishment and contempt. In and of itself, that combination was not a matter of concern--of any consequence, really. One cannot have real new or unrecognized ideas without the rigid minded or the uninformed to hold you in contempt, and it does not matter when I am right or when I am wrong. Those who do not believe in the value of innovation are pretty much all like that, and this is especially true in the law. Besides, very few cases consider insurers and their "power" to create new provisions in their own contracts of insurance.
Of course, an insurer may not create new coverage in an already existing policy if it is injurious to the insured. The paradigm is simple. Suppose an insurer provides coverage A, B, and C to its insured in a given contract. Now suppose that absent any dispute over coverage, the insurer decided for some reason that it "really" only offered coverage A and B. In other words, it deleted coverage C from the policy. This would actually be creating new coverage, namely: A & B & ~C. Of course, these combinations are groups--sets, as it were--but that makes no difference. There is such a thing as creation by elimination. In a painting, the deletion of a figure creates a new painting, and--in any case--it is a creation.
Just as the real objection to creation-by-insurer is based on the fact that the insurer gets hurt, so the objection to this anti-creationism is that the insured gets hurt. Now, consider the opposite. What if the insurer created coverage that was to the benefit of the insured? It is doubtful that the insured would object. Of course, an Anti-Creationist could still say that these things cannot be done according to the fundamental principles. Of course, this proposition is false. Parties can agree to changes in contracts, and the benefited party may be considered cooperating--and almost certainly would be--or that party might have waived any objection s/he might have.
Now, why might an insurer do this? There are lots of reasons, some questionable and some not. I shall mention only one reason, and that one is not subtle and perfectly acceptable.
Consider an insurer, that noticed another insurer using the same policy, was excluding something, and that insurer researched the case law on the subject and found that there were two cases supporting the actions of the other insurers. Suppose the insurer in question looked at the language of the contract and said to itself, we are not sure what to do here. We did not intend not to insure this; we intended to insure it. We "the underwriting department," together with senior executives, do not care that this is a standard policy used else where in the industry.
Hence, straight forward we will consider it covered. We should go back and get the six (6) cases we "fouled up," and make them conform to our view. It seems to me that this is a paradigm of policy-coverage-creation.
Wednesday, March 6, 2013
Semantic Creations for Existing Contracts. Part I.
The Possibility of Creation by Insureds for Already Existing Contracts
Michael Sean Quinn*
It is sometimes said that new components of an already existing insurance policy--a contract of insurance--cannot be "created." It is worth thinking about this pithy but obscure proposition. It is also worth dividing the discussion between insureds and carriers. This one will be about insureds, and the next one on this topic will concern carriers.The word "creation" has more than one meaning:
- No one thinks that insureds cannot be involved in creating new contracts or alternations in existing contracts, when it has the consent of the insurer.
- This obvious truth pertains to modifying creations, as well.
- A more interesting issue involves whether an insured can create new coverage if the insurer does not oppose it, after it has already been tried. This blog will focus on more interesting problems.
- One can create new works of art, new architectural designs, ideas, words, and so forth. The point about contracts is that a party cannot create anything new. Everything that exists, is already there. So the idea might go.
- There is a problem with that argument. There is such a thing as a triptych. The original artist may have finished only two parts, so a third artist--or maybe more--does the remaining part(s). The last creation may improve the whole.rror may improve the whole creation.
- The same idea can be applied to art forgeries, though this idea is less attractive.
- Of course, the anti-creation "rule", if it is one, does not mean that a party to a contract cannot realize and discover new dimensions to an already existing contract. This is obviously true with respect to individually created, thoroughly negotiated, nonstandard contracts, or at least with respect to their nonstandard portions, if any.
- In a way, a new meaning is created and exported into the already existing contract, and a new whole is created. Everyone may be happy about this. In the alternative, only the creator is happy, but the other party may admit a helpful contribution with that the creator. . . .
- Maybe the creation of a new life is a bit like this.
- Usually insurance contracts are not of this sort; usually they are at east "95% standard." Nevertheless, insureds discover--often by considering the meanings of various different words and phrases--unintended and unexpected meanings. With regard to this matter, there is a sense in which the "inventive" insured, or the insured oriented to "innovation," may be said to have created a new component in a contract of insurance. Arguments against such conclusions invariably proceed on the basis of the no-creation principle.
- This type of creation can happen are a result of focusing on ambiguities, vagueness, inconsistencies, or propositions that are very difficult to understand. Ignorance or ill-informativeness--on the part of adjusters--may help with this. So may the poor education of adjusters as to the contents of a policy.
- There is a difference between actual creation, and an alleged creator winning a so-called "Argument Regarding Creation."
- The most likely analogy if God in Genesis. He is said to have created the heavens and the earth, etc. At least the first two of these involve creating something out of nothing. Of course, this analogy, while neat looking, won't work. God was dealing with nothing--nothing at all. This fact--to the extent that it is a fact--is that which makes what happens truly miraculous, and breathtakingly so. The anti-creation "axiom," as I heard it in a deposition last week, is not anywhere in the same catagory as God's accomplishment.
- That fact is obvious enough. Nonetheless, one of the rhetorical undertones of the "You cannot create arguments" is that you are not God." Or, "Who do you think you are?" It's as though you think you can create new beings and fit them into the already created." "You are an arrogant SoS."
- Another version of the anti-creation "axiom" is like some of the others, but it also stands for the proposition that the meanings of existing terms cannot be changed. This view is simply the idea that no new meanings can be inserted into--or on to--the words in a contract. This is really an idea of "original fixedness." Some contract wording has lasted over 100 years. Maybe there should be some changes every 50 years.
One of the things wrong with this "Anti-Creation Proposition," is that it has been recognized that some conditions, for example, can be changed by courts in significant ways. After all, some already have. The stringent requirement of timely notice has been pushed aside for almost all insurance policies is an example.
It is significant to the "axiom" "Insureds cannot create new coverages in aready existing contracts to which they are parties"--and this is a better formulation than others--is virtually always challeged to this of which I have heard are formulated, argued for, and "pushed," by insurers that are parties to the contract at issue. The challenges always, so far as I know, increase the insurer's liabiality.
It must be admitted that others can raise "You cannot create new coverage" arguments. The only ones I can think of now are reinsurers, excess insurers up the stack, and regulators of various sorts. This context is not a direct application of the principle. It is a complaint to and then about the insurer having failed to apply the "Anti-Creation Rulee" with sufficiently good arguments or with enough vigor. There will be a cause of action here--maybe for tegligence and/or maybe for breach of contract.
Michael Sean Quinn, Ph.D., J.D., C.P.C.U. . . .
The Law Firms of Michael Sean Quinn et
Quinn and Quinn
1300 West Lynn Street, Suite 208
Austin, Texas 78703
(512) 296-2594
(512) 344-9466 - Fax
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