Cutting Edge Insurance Litigation Issues Chinese Drywall to

Cutting Edge Insurance Litigation Issues: Chinese Drywall to Privacy Claims Nicholas E. Zito RAMEY, CHANDLER, MCKINLEY & ZITO, P. C. www. rameychandler. com South Texas College of Law 14 Annual Insurance Law Symposium January 21 -22, 2010

Chinese Drywall Manufacturing § Mined with gypsum with additives (USA) § Synthetic gypsum (Chinese)

Chinese Synthetic Gypsum § Synthetic Gypsum is a by product of coal-fired power plants (fly ash), residue from coal combustion (sulfur dioxide) is scrubbed to create calcium sulfate (gypsum) § Synthetics made in the USA are gathered from smokestacks after scrubbing resulting in a cleaner product § Chinese synthetics contain impurities such as strontium sulfide – reacts with heat and moisture (humidity) to form hydrogen sulfide gas § LA Times reports Chinese drywall also contains phosphogypsum, a radioactive substance banned for use in construction in the U. S. since 1989 § Imports began as a result of shortages caused by construction boom earlier in decade and reconstruction of homes in Gulf Coast following hurricanes in 2004 -2005

Chinese Drywall Related Complaints Problems began in 2008 with the following complaints most likely due to off-gassing of hydrogen sulfide: § Rotten egg smell; § Corrosion: copper wire, AC evaporators, appliances, fire & sprinkler systems and various electronic systems § Claimed illnesses and physical symptoms.

The back-side of this drywall (not normally visible to the resident) is labeled as "MADE IN CHINA. "

The smaller sample (slightly gray in color) was taken from drywall which was removed from the home and replaced with new wallboard (white in color)

The ground wire connected to the green screw is blackened and corroded. This wire should be copper-colored

This bathroom fixture is pitted and corroded

The copper coils on this air conditioner unit are blackened and corroded

This copper pipe is blackened

Magnitude of Problem § Product shortages following several hurricanes resulted in 500 million pounds or 7 million sheets being imported § Installed in an estimated 100, 000 homes per the Wall Street Journal § Estimated cost of remediation at $100, 000 per 2400 sq. ft. home § Per CPSC as of December 22, 2009 2, 360 incident reports from homeowners in 35 states

CPSC Investigation § Investigating adverse health affects (levels of formaldehyde from other building materials and hydrogen sulfide detected-synergistic affect? ) § Methods of identifying presence of Chinese drywall § November and December interim reports § Contact with importers-companies have been ordered to contact CPSC before distributing any Chinese manufactured drywall from their inventory § Chinese drywall CPSC website

Congressional and Governmental Action § Several bills introduced into Senate by Florida and Louisiana Senators § Drywall Safety Act of 2009; § Mortgage Reform and Anti-Predatory Lending Act § Involves study of property insurance for allegedly contaminated homes § The Foreign Manufacturers Legal Accountability Act of 2009 § § Easing joinder of foreign company in U. S. Courts; Requiring foreign manufacturers to retain business representative in state where it does significant business for purpose of service of process § Foreign manufacturers to agree to be held accountable by U. S. courts when sued.

Congressional and Governmental Action § HUD Action § Community Development Bloc Grant Program; § FHA insured homes – lenders instructed on December 22, 2009 to operate under FHA Type 1 Special Forebearance rules.

Potential Parties § § § § Builders Sub-contractors Real Estate Developers US Distributors/or retailers Importers Manufacturer/related controlling entities US Manufacturers using synthetics Possibility U. S. manufacturers recycled Chinese drywall to make domestic drywall § Numerous Chinese manufacturers identified in MDL action – 36 different variations of Chinese drywall

Potential Legal Claims § § § Negligence Strict Liability Breach of Contract Breach of Warranty DTPA Magnuson-Moss Warranty

Damages Alleged § Testing costs § Air § Tearing our of walls to identify Chinese product § Replacement of walls/ceilings § Replacement of wiring, corroded pipes, appliances, AC unites, fixtures, smoke detectors and sprinkler systems § Loss of use § Diminution of property value (stigma) § Bodily injury (irritant effects)

Legal Actions Pending § MDL-2047 Chinese Drywall Litigation pending in New Orleans § MDL website § Knauf Plasterboard (Tianjin) Co. (KPT) entered into a pre-trial order accepting service as to homeowner Plaintiffs named in Omnibus Class Action Complaint by 12/2/09. Complaint cannot be amended to add new plaintiffs – avoid Hague Convention service problems

Legal Actions Pending § Class action suit filed in Federal court in December in New Orleans, lead Plaintiff is Sean Payton, head coach of the New Orleans Saints § Lead Class counsel, Russ Herman, says additional 600 plaintiffs who did not join first class action will be joined in new class action to be filed overseas. § First bench trials on property damage involving Virginia Plaintiffs in MDL 2047 are to begin January 25, 2010 against Taishan Gypsum Co.

Legal Actions Pending § Default judgment entered September 25, 2009 against Taishan Gypsum Co. in MDL action. § LA Attorney General Buddy Caldwell filed suit in Orleans Parish on January 13, 2010 against multiple entities associated with Knauf Plasterboard (Tianjin), the primary manufacturer of Chinese drywall making its way into Louisiana. Other defendants are international and domestic manufacturers, distributors, importers and builders. Claims economic loss to state due to Chinese drywall. § WCI Chinese Drywall Trust sues 14 insurers in Eastern District, Louisiana in January, 2010 asserting a declaratory judgment action and breach of contract claims.

Legal Actions Pending § Pro-active suit filed by Lennar Homes in Florida § § § Common law indemnity Negligence Product liability theory Implied warranty Express warranty Breach of contract § Lennar set aside 39. 8 million to remediate at least 400 homes: homeowner out up to 6 months – sign waiver of liability except as to BI claims

Legal Actions Pending § Dec action on coverage; Builders Mutual Ins. Co. v. Dragas, et al in US Dist. Ct. in Virginia § Actions vs. US Manufacturers: Swindler v. Georgia Pacific Gypsum, LLC filed in Florida alleges Magnuson-Moss Warranty claim for synthetic gypsum. GP says it has used synthetic gypsum for years without complaint.

First Party Coverage Issues – HO Policies § When did the loss occur? (Trigger coverage test that will be applied) § Has there been direct physical loss to property? § Is the loss due to inherent vice or latent defect? § Is the loss due to corrosion? § Is the loss caused by a pollutant? § Is the loss due to faulty, negligent, inadequate or defective: § Design, specifications, workmanship, repair, construction, renovation or remodeling? § Materials used in repair, construction, renovation or remodeling?

Trigger of Coverage – HO Policies Liability claims – “injury – in fact” trigger applied Don’s Building Supply, Inc. v. One Beacon Insurance Co. , 267 S. W. 3 d 20 (Tex. 2008) Pre – Don’s case law on trigger issue: Allstate Insurance Co. v. Hunter, 242 S. W. 3 d 137 (Tex. App. Ft. Worth, 2007) applied manifestation trigger Don’s probably trumps Hunter See: Injury-In –Fact Coverage-HO Policy View, IRMI. com October 2008 By R. Brent Cooper and Katie Mc. Clelland

Direct Physical Loss § “We insure against risk of direct physical loss to property” § “property damage means physical damage or destruction of tangible property” § Has the drywall sustained physical damage before manifestation of damage? § Property must sustain damage from an external source to qualify as “direct physical loss or damage” – builders risk policy, Trinity Industries, Inc. v. INA, 916 F. 2 d 267 (5 th Cir. 1990) § Has there been property damage to other property? § Damage from hydrogen sulfide to ac system evaporator or electrical systems

Inherent Vice or Latent Defect § ‘We do not insure loss: 3. caused by or consisting of a. wear and tear b. Inherent vice, latent defect or mechanical breakdown” Insuring agreement will most likely not cover the cost of removal or repair of “Chinese Drywall” due to the internal defect/sulfur impurities.

Corrosion Is there coverage for the corrosive effect of the hydrogen sulfide off-gassed by the Chinese Drywall? It is “property damage” But policy does not insure loss: 3. “caused by or consisting of: c. Smog, rust, or other corrosion”

Faulty or Defective Design or Materials “We do not insure against loss consisting of any of the following: c. Faulty, negligent, inadequate or defective: 2. design, specification, workmanship, repair, construction, renovation, remodeling…… 3. materials used in repair, construction, renovation or remodeling; ” No coverage for repair or replacement of Chinese Drywall. But…. . “ensuing loss” coverage? How about the damage to other property: black soot, electrical systems; HVAC coils?

The Pollution Exclusion “We do not insure loss: 3. Caused by or consisting of: e. Discharge, dispersal, seepage, migration, release or escape of pollutants Pollutants means any solid, liquid, gaseous, or thermal irritant or contaminant, including, smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. ”

Exclusion held not to be ambiguous: Noble Energy, Inc. v. Bituminous Cas. Co. , 529 F. 3 d 642 (5 th cir. 2008). Under Texas law reasonable expectations of insured are not considered where policy exclusion is unambiguous Pollution exclusion applied to preclude coverage for liability claim arising out of carbon monoxide exposure claim by apartment dweller which was caused by a blocked furnace vent. See Nautilus Insurance Company v. County Oaks Apartments, Ltd. , 566 F. 3 d 452 (5 th Cir. 2009). (Exclusion applied to contained pollutants as well, i. e. even if stayed within the apartment)

Q. Did the loss occur because of alleged “discharge or release”? “To release-set free from confinement” Q. Is Carbon monoxide a pollutant? It can be since it can be an irritant and in certain exposures can be fatal. Hydrogen Sulfide can be an irritant; it can cause damage. How about Phosphogypsum?

GL Coverage Issues 1. Is there an occurrence? Lamar Homes, Inc. v. Mid-Continent Cas. Co. , 242 S. W. 3 d 1 (Tex. 2007) Allegedly defectively built foundation resulted in sheet rock and stone veneer cracks. Held: Damage to contractors work can be an occurrence.

CGL Coverage Issues 2. Is there property damage? Lessons from Lennar Corp. Great Amer. Ins. Co. , 200 S. W. 3 d 651 (Tex. App. [14 th] 2006, Pet. Denied) “EFIS already in an unsatisfactory state when applied to homes because it is inherently defective. Therefore defective EFIS does not constitute property damage. ” No coverage for removal of EFIS by Lennar. Coverage could exist for water damage to other property.

CGL Coverage Issues 3. How many occurrences? Since Lennar was not a designer or manufacturer, each home it built and sold was a separate occurrence. ($250, 000. 00 SIR per occurrence equates with no insurance coverage)

CGL Coverage Issues 4. Will the pollution exclusion apply? Most likely, yes. Typical policy language is unambiguous. Absolute pollution exclusion is pretty much “absolute”.

CGL Coverage Issues 5. Your work exclusion/subcontractor exception. Most small builders policies now have modified insuring agreement exempts coverage for property damage arising out of subcontractors work.

CGL Coverage Issues 6. What about exclusion M, property damage to “impaired property” or property not physically injured? Lennar said this exclusion might apply to replacement of EFIS but not to the repair of the water damage to homes.

CGL Coverage Issues 7. What about the “sistership” exclusion? The recall or removal exclusion. Might apply to preventative measures – removal and replacement (there has been no formal government action yet, although it is expected) Exclusion would not apply to cost to repair other (water) damaged property per Lennar

Product Liability and DTPA Indemnity Claims § Section 82, TCRCP § Innocent seller/retailer can claim indemnity from manufacturer § Sheet rock will be deemed a product – see K-2, Inc. v. Fresh Coat, Inc. , 253 S. W. 3 d 386 (Tex. App. Beaumont, 2008) EFIS applied by subcontractor was a product-they sold services and materials) § No indemnity for “independent liability” of seller § (If sub pays GC based upon contractual liability claim – Section 82 independent liability exemption applies, See K-2 § No indemnity where manufacturer cannot be joined (if you can’t get the Chinese manufacturer served)

Product Liability and DTPA Indemnity Claims § Section 17. 555 Tex. Bus & Comm. Code § Statutory indemnity may be claimed by contractor or sub against distributor/manufacturer where homeowner brings action under the DTPA.

Recommended Reading on Chinese Drywall Claims § Christopher Beltner and Joseph Hanna, “The Gathering Storm of Chinese Drywall Defect Claims” For the Defense, (June 2009) p. 36 § Caryn L. Daum, “The Emergence of Chinese Drywall Claims: A Look at First Party Coverage Issues” DRI Covered Events, Vol. 1 Issue 25 § Brian S. Martin and Rodrigo Garcia, Jr. , “The Coverage Conundrum in Chinese Drywall Claims” Insurance Journal, (September 29, 2009) § H. Lockwood Miller, III “Chinese Drywall: A Building Problem” DRI-The Voice, Vol. 8, Issue 43 § http: //www. myfloridaeh. com/community/indoorair/drywall. html

Meet the ‘EDGE” – Not the Guy from U 2

Nanotorts Nanotechnology: An Emerging Risk

Nanotorts § Nanotechnology: Things built on a molecular scale § Already appears in numerous products § Evidence of EHS (environmental health & safety risks) § EPA is conducting a study § Touted as the next “asbestos” tort as “nano tubes” are claimed to be similar to asbestos particles – airborne and skin exposure

Nanotorts § Major carriers issued CGL exclusions in 2008 § Continental Western § Firemen’s Insurance of Washington, D. C. § Union Insurance Company § Acadia Insurance Company

Nanotorts § This “endorsement excludes bodily injury, property damage, and personal and advertising injury related to the exposure of nanotubes and nanotechnology in any form. This includes the use of, contact with, existence of, presence of, proliferation of, discharge of, dispersal of, seepage of, migration of, release of, escape of, or exposure to nanotubes or nanotechnology. ”

Nanotorts § There already ads and website for “carbon nano tube attorneys” § For more see www. nanolawreport. com

BPA Suits Insureds Left Out in the Cold?

BPA Suits § Bisphenol A: MDL No. 1967 U. S. Dist. Court Kansas § No bodily injury alleged to avoid denial of class action § No coverage per Federal Court ruling in Chicago as no “bodily injury” alleged § Potential mass tort due to wide spread exposure

BPA Suits § Carriers adding BPA policy exclusions § Pending Congressional bills in both houses § Potential “BI” claims § See Dwyer, “Endocrine Disruption Injury Claims” For the Defense (January 2010) p. 62

Mr. Rico Gets Introduced to Mr. Worker’s Comp

Brown v. Cassens Transport, Co. , 546 F. 3 d 347 (6 th Cir. 2008) § U. S. Supreme Court ordered 6 th Circuit to reconsider whether Plaintiffs could proceed with RICO claim arising out of handling of worker’s comp claim § 6 th Circuit said yes and that state WC statute did not preempt the RICO claims § Suit will decide whether the employer, the TPA and the doctor acted in collusion to produce “fraudulent medical opinions that would support the denial of worker’s comp claims

§ Worker’s comp cases on their own would not make it to Federal Court § Exposure to treble damages and attorney’s fees § Incentive to claimants and their counsel to challenge the parameters of the state worker’s compensation system § Practice point: be careful with your choice of IME physicians

“It’s Not Easy Being Green” – Get Ready for Another Type of Green Kermit had it wrong – we are heading “green” and insurers are getting ready

§ Massive growth in commercial and residential green construction forecasted § Growth in rebuilding green § LEED certification: Leadership in Energy and Environmental Design program sponsored by U. S. Green Building Council § Insurers began writing “green coverage” in 2006 § Policies cover re-certification of formerly “green” buildings § Homeowner policies that allow for rebuilding to meet green building standards

§ Green Reputation Coverage – see AIG endorsement (greenwashing coverage? ) § Coverage for an “adverse green publicity event” – negative media reporting § AIG pays for your “reputation crisis consultant” (but AIG designates who that is) § Defense of an “adverse green claim” – civil suit demanding monetary or nonmonetary relief alleging your failure to comply with “green building” standards § Protection from the Sierra Club?

Types of “Green” Claims § Indoor Air Environment Claims: pollution exclusion would apply but not if you purchased the new “Indoor Environment Coverage” (also offered by AIG and perhaps others) § New Product Liability claims from new and untested products? § Use of recycled materials – concrete made from blast furnace slag i. e. “fly ash” – isn’t this what is in Chinese drywall? § Products that fail to live up to the touted “green standard” – warranty claims, DTPA claims, Magnuson-Moss warranty claims § Product degradation due to green useage – cork board flooring near moisture sources such as water fountains/office kitchens resulting in water damage or mold growth

Types of “Green” Claims § Design defect and installation claims § Altering construction processes to go greenadverse performance § Martin and Polk County courthouses in Floridaincreased outdoor air influx caused massive mold damage Remember what happened with EFIS! § Return of the “sick building” claims – use of untested materials or using traditional materials in non-traditional ways

Types of “Green” Claims § Problems arising from a lack of qualified contractors § Professional liability of engineers and architects for certifying a building as being “green” – potential exclusion from coverage due to exclusion of claims for breach of warranty

For more see: § Industry report by Marsh, “The Green Built Environment in the United States: The State of the Insurance Marketplace” § T. Sky Woodard and Erin C. Miller, “Green Expectations: New Risks for Manufacturers Take Root” For the Defense, (December 2009) p. 44

An Inconvenient Truth: Global Warming Lawsuits are Here § Fifth Circuit remands “global warming” case for enhanced Katrina damages following dismissal see Ned Comer, et al v. Murphy Oil USA et al, (5 th Cir. 10 -16 -2009) § Suit alleges defendants activities caused emission of greenhouse gases that contributed to global warming that in turn made Katrina more ferocious causing private and public property damage

An Inconvenient Truth: Global Warming Lawsuits are Here § 5 th Circuit holds Plaintiffs have standing to sue § Court relied upon U. S. Supreme Court decision in Massachusetts v. EPA, 549 U. S. 497 (2007) – suit brought against EPA for failure to regulate greenhouse gas emissions allegedly leading to rising strength of hurricanes. The high 9 also recognized the impact of Katrina is arguably a result of this causal link.

An Inconvenient Truth: Global Warming Lawsuits are Here § Note these are standing cases and Plaintiffs must still overcome the Daubert or “scientific evidence” issues on causation that exist. § The EPA officially ruled that greenhouse gases are a public health threat under the Clean Air Act on December 7 th – what will come next? ?

An Inconvenient Truth: Global Warming Lawsuits are Here § Coverage Issues are Abundant: § Not an occurrence-expected/intended provision § Loss in progress rule § Pollution exclusion

For More See: § Max H. Stern and Jessica E. La Londe, “Keep it Cool: Potential Coverage Defenses to “Global Warming” Lawsuits, Coverage” ABA Litigation Section Vol. 19, Number 4, p 3, (July/August 2009)

Internet Liability § Privacy Liability § Publication of personal information § No right through employment? § Failure to keep data secure § Potential Exposure for Lawyers § Network Security Liability

Internet Liability § Defamation § Outing the Bloggers § Bloggers Liability for Endorsing Products or Services (New FTC Rules) § Technology E&O Claims § Traditional Coverage: Personal Injury Liability § Web Liability Coverage

Invasion of Privacy Claims § § § Intrusion of seclusion Name or likeness appropriation Publication of private facts (traditional cause of action) See Cain v. Hearst Corporation, 878 S. W. 2 d 577, 578 (Tex. 1994) Placing private information on the internet is enough to satisfy the publication element of the cause of action

Invasion of Privacy Claims § Is there an internet exception to the publication requirement? § (6 views) – Minnesota “Rotten Candy” case – 3 rd person sets up myspace profile with Plaintiff’s photo and personal information § Restatement Torts (Second) Sec. 652 D Comment a: “it is not an invasion of privacy to communicate a fact…to a single person, or even to a small group of people. ”

Invasion of Privacy Claims § Defendant emailed photos he took of his ex-girlfriend (from a threesome) to her mother, ex-husband ex-in laws as well as her employer. Held – half dozen or so emails was enough to be considered a publication § Peterson v. Moldofksy, 2009 WL 3126229 (D. Kan. September 29, 2009)

Invasion of Privacy Claims § Intrusion upon seclusion: Steinbach v. Village of Forest Park, 2009 WL 2605283 (N. D. Ill. Aug. 25, 2009) § Accessing another persons emails and forwarding to others (suit included as defendant an IT professional employed by the employer)

Invasion of Privacy Claims § Unauthorized prying into plaintiff’s seclusion § Intrusion would be highly offensive to reasonable person § Matter intruded upon was private § Intrusion caused Plaintiff to suffer

Invasion of Privacy Claims § Federal Wiretap Act and Stored Communications Act – employer not exempt where the actual internet provider was an outside entity § Cloud computing rather than in house hosting of email service opens employers to potential liability – loss of “no expectation of privacy” defense

Invasion of Privacy Claims § Electronic Communication Privacy Act (18 U. . S. C. 2511) Brahmana v. Lembo, 2009 WL 1424438 (N. D. Cal. May 20, 2009) § Suit alleging employer violated the act using a keylogger to intercept username and password for Plaintiff’s personal email account

Invasion of Privacy Claims § Divorce Spywear: Becker v. Toca, 2008 WL 4443050 (E. D. La. Sept. 2008) § Plaintiff’s ex-wife installed a Trojan Horse on home computer and office computers that could steal passwords and send to a remote computer.

Invasion of Privacy Claims § Are IP addresses private? § State of New Jersey v. Shirley Reid (N. J. Sup. 2008) § ISP violated internet users’ right to privacy by turning over user account information based upon an invalid subpoena

Liability for Loss of Client’s Personal information § Randolph, et al v. ING Life Insurance and Ann. Co. , 2009 D. C. App. LEXIS 23 (2009). § Laptop stolen from ING employee’s home which had personal information of 13, 000 perople in an employer’s 401 k plan on it. Held – no standing on invasion of privacy and negligence claims as fear of future harm was not an “injury”.

Red Flags Privacy Rule § Lawyers dodge a bullet § New regulations adopted by FTC under Fair and Accurate Credit Transactions Act of 2003 requires implementing programs to identify, detect and respond to warning signs of identity theft. § FTC interpreted to include lawyers and law firms ABA brings suit and successfully challenged FTC’s authority to include lawyers

Bloggers Beware! § Defamation § Eric Albritton v. Cisco Systems, Inc. , et al (E. D. Tex. Tyler Div. ) § Patent Toll Tracker blogger sued for defamation by Plaintiff’s counsel in IP case. Blog was only open to invited users § Trial Court: “posts are capable of both innocent hyperbole and defamatory insinuation” therefore, jury is to decide § Result: confidential settlement after 4 days of trial beginning September 15, 2009 in Tyler

Deceptive Practices § FTC to regulate bloggers touting products and services through new guidelines § Bloggers must disclose any freebies or payments they receive for reviewing a company’s products

Outing Bloggers § See – Brendan L. Smith, “Meet John Doe: Internet Defamation Plaintiff’s are Itching for the Chance” ABA Journal, (January, 2010) p 15 § Battle over protection of anonymous speech under First Amendment

Coverage for Internet Liability § Homeowner’s Policies § Personal Injury Liability Coverage § “Personal Injury” means: § § § Libel Slander Defmation of character Invasion of rights of privacy humiliation § “Occurrence” means: § An event of series of events…. Which results in personal injury, not expected or intended from the standpoint of the insured.

Coverage for Internet Liability - Exclusions Coverage for Personal Liability does not apply to: Injury “expected or intended by the insured” § Question: If invasion of privacy is an intentional tort, does the policy exclusion make the policy ambiguous? Bailer v. Erie Ins. Exch. , 687 A. 2 d 1375 (Md. 1997); Lineberry v. State Farm Fire & Cas. Co. , 885 F. Supp. 1095, 1099 (M. D. Tenn. 1995).

Coverage for Internet Liability - Exclusions § Trinity Universal Ins Co. V. Cowan, 945 S. W. 2 d 819 (Tex. 1997) – Gage’s conduct was not an accident because the injury to Cowan, the invasion of her privacy, is of a type that “ordinarily follows” “Nor did Gage negligently invade Cowan’s privacy, he intentionally made copies of the photographs and showed them to his friends” Id at 828

Coverage for Internet Liability - Exclusions § Tanner v. Nationwide, 289 S. W. 3 d 828 – fact that insured engages in intentional conduct will not preclude coverage where there was no intent to injure

Commercial Liability Policies § ‘Personal and advertising injury” means injury…. Arising out of one or more of the following offenses: § d. Oral or written publication of material that slanders or libels a person or organization or their good, products or services; § e. Oral or written publication of material that violates a person’s right of privacy

Commercial Liability Policies- Exclusions § A. Knowing Violation of Rights of Another– caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict “personal and advertising injury. ” § B. Material Published With Knowledge of Falsity – publication of material, if done by or at the direction of the insured with knowledge of its falsity

Commercial Liability Policies- Exclusions § J. Insureds in Media and Internet Type Businesses § No coverage if you are in the business of: § Advertising, broadcasting, publishing or telecasting § Designing or determining website content for others, or § Internet search, access, content or service provider

Commercial Liability Policies- Exclusions § K. Electronic Chatrooms or Bulletin Boards § Arising out of chatroom or bulletin board you host, own or exercise control. No coverage for intrusion upon seclusioneavesdropping, intercepting private communication – there has most likely been no publication

Web Xtend Liability Endorsement to CGL § “Web site injury” caused by an offense committed in course of visual or audio presentation of material on your “web site” or in the numerical expression of computer code used to enable your “web site”.

Web Xtend Liability Endorsement to CGL § Adds replacement definition of personal injury: § Injury arising out of: § e. Oral, written or electronic publication of material that appropriates a persons likeliness, unreasonably places a person in a false light or gives unreasonable publicity to a person’s private life. § “Your web site” means all computer files and data which may be accessed via the internet using a Universal Resource Locator that includes any domain name owned or assigned by you. EXCLUSION OF COMPUTER SOFTWARE ERRORS AND OMMISIONS FOR PROPERTY DAMAGE OR PERSONAL INJURY

Thank you! Nicholas E. Zito RAMEY, CHANDLER, MCKINLEY & ZITO, P. C. 750 Bering Drive, Suite 600 Houston, Texas 77057 (713) 266 -0074 nez@ramey-chandler. com www. rameychandler. com A copy of this presentation maybe accessed from our website