I am basically a tolerant, liberty-oriented, and liberal-minded person.  I was delighted to see female priests in the Episcopal church; gay clergy is fine with me; and I have no objection to a Lesbian archbishop.  I even now, under the improbably influence of Brent Cooper, a lawyer in Dallas (who-da thunk it), welcome the prospect of trying a case in front of a jury of  “Millennials”–all including purple haired maidens, women with multiple tattoos in vivid color, and men wearing baseball caps on backward.

In addition, in opposition to all the Yellow Dogs I know–and that’s a lot–I think that most insurance companies, most of the time, are reasonable entities trying to reach a reasonable result that is more or less consistent with the applicable contract of insurance. Similarly, I think that most lawyers–more than 65%–try to obtain a semblance of justice, even in contested matters, even if many of them are far, far, less than perfect or even marvelously good, relatively speaking, in their non-lawyering lives.

It is therefore a personal deficiency of mine–granted one I nonetheless love, honor, and obey–to not just delight but take considerable joy in observing a truly wicked lawyer–an evil one!–washed over by a tide of condemnation. Hearing about a come a uppence is not nearly so pleasurable as “watching”–if only in the imagination–not only a fall from a high place but also a long, trudging  trip on bare feet in the cold, cold rain on gravel roads on the way to the farthest away dumpy house of misery producing, sustaining, and worsening incarceration.

I have gone to confession on this point in which I take pride many times during and since my youth, yet (I do not really try to repent.)  Following vengeance upon the profoundly and deserving unworthy is one of life’s pleasures, like warm cornbread, especially when  you have no role in executing it. (In the current age of massive statin consumption, be careful not to eat too much of it.) Oddly enough, I would defend these wretches in court if s/he have the money* or were a close and beloved relative, like my brothers, my wife, and my children, even if broke.  I’m sure my father would have done it for one or all of us. Even the worse get a defense in the civilized secular world; besides, we have not burned witches in several centuries.

(*The liberality and tolerance I have proclaimed for myself gives out here.  I cannot see how the idea of  pro bono applies since that phrase means “for the good,” and I see no good in this defense.)

Now I finally get to the point.

There is a syndicate of lawyers who are way down there, not far from the lowest of the low.  Part of this is that they inflict suffering on large groups, and will go further if they can. What they do is to acquire copyrights “governing” poor pornography.  They then utilize it to blackmail weak citizens who have downloaded some of their junk.  They do this by finding out who these poor devils are by cyber investigations and then extort money from them, by use of our sacred courts, in exchange for silence.  Usually these victimized ninnies pay what sounds like relative sums, $4500 plus-or-minus, to get out from under. 

There have been at least dozens of these lawsuits around the country using boilerplate Complaints and then settling quickly.  At last various people have represented the populace and triggered genuine court action.

When the courts realized what was going on, they reacted vigorously to some extent with money sanctions and orders requiring what is in effect restitution.  In addition they have required recuperates to report to the courts all other courts where they have been trying to ruin the system and a sizable number of people.  (How does one explain to his wife where the $4500 went when its disappearances cancels the to NYC to see, hear, and sit in the stands for this and then that?)

Thank you Lord, the knights of justice are on the move.  In addition to the foregoing the judges are going to the relevant ethics committees of state bars, to U.S.Attorneys, to state attorney general, and to the FBI. Maybe they should also be going to the right groups that are influential so the “antiquated” provisions of the law of copyright can be discarded.

One of the leading cases is Ingenuity 13 LLC v. John Doe, 2013 WL 1898633 (C.D. Cal., May 6, 2013), Otis Wright, J., and its follower is AF Holdings, LLC v. John Does, 12-1445-9 (JNE/FLN)(D. Minn. Nov. 6, 2013), Franklin Noel, M.J. Judge’s Wright’s opinion contains marvelous charts, maps, and photographs of the “Punks of the Prenda,”–Prenda being the odious law firm of–the central filthy pigs–being led to the slaughters of disgrace, disbarment and imprisonment.  The Minnesota case is far more brief and lacks the visuals.  However, it dealt with five–REPEAT 5!–of these satanically sinful cases.  My first hope regarding the Pythons of Prenda is that they not even have enough money to hire capable defense counsel, not even Harvard’s best.
Originally posted on 11/14/2013 @ 9:23 pmMichael Sean Quinn, PhD, JD, CPCU, Etc. (530)One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.
Read more from the same author:UNDERWRITING & CYBER INSURANCE COMING OF AGEPart I. Some Cyber Policies: Structure and Organization: Comparisons“PORTAL-ING” THE INSURANCE INDUSTRY INTO THE CO-CALLED “CYBER WORLD”Hits: 7

Read More

On the Rhetoric of the Ridiculous

Overdoing rhetoric in briefs, motions, pleadings, etc., is poor, tasteless, and below-grade “C” lawyering. There has recently been direct and unequivocal explicit support for this obviously true proposition.  Perhaps the pronouncement of the 6th Circuit will encourage those who do not realize that stridency of semantics, as opposed to restrained assertion and calm clear argument, is almost never a good idea. Let the ideas produce the desired effect; if they don’t do the job, try a different approach if possible. 

Never resort to the crude bluster, cliche-ridden, the always overdone language of the pool-hall loudmouth. Grade C lawyers at this point might say that such a position is absurd.  Such lawyers still would not have learned the lesson.—MSQ

An illustration of this point is to be found in a recent insurance case.  Barbara Bennett et al v. State Farm Mutual Automobile Insurance Company, No. 13-3047, 2013 WL 5312398 (6th Cir. September 24, 2013)

In this case, Ms. Bennett was struck by an automobile as she was walking her dog. As a result of this accident she ended up in the car–not next to on the roadway, not standing next to the car, and not under the car.

She argued that she “occupied” the car under the State Farm policy.  The District Judge held that State Farm’s defense was correct: she did not “occupy” the auto, since she was not in it.  State Farm called Bennett’s position “ridiculous” and did it on the first page of their brief.

The court criticized this linguistic behavior for four reasons: first, where the language was in the brief, second because it was worded as it was; third because State Farm’s argument was fairly obviously invalid; and fourth because State Farm was wrong.

With regards to points #1 and #2 the court, quoting another opinion from which  it wrote its opinion: “There are good reasons not to call an opponent’s argument ‘ridiculous,’ which is what State Farm calls Barbara Bennett’s principal argument here. The reasons include “civility; the near-certainty that overstatement will only push the reader away (especially when, as here, the hyperbole begins on page one of the brief, and that even when  the record supports an extreme modified, ‘the better practice is usually to say out the facts and let the court reach its own conclusion.’ Big Dipper Entm’t, L.L.C. v. City of Warren, 641 F.3d 715, 719 (6th Cir. 2011).”  Trying to, in some sense, compel opinions by the use of “battle-station” rhetoric is ill-advise.*

With regard to the third point,  the court criticized State Farm’s argument.  It argued that coverage analyses proceeded on the basis of how whole types of policies are interpreted: auto policies for example, and the “occupy” language of those types of policies. The court informed State Farm that contracts of insurance are to be interpreted one at a time and not as whole classes. That a court has decided a similar-looking policy in the way the insurer wants it interpreted does not bind a court, even itself.  Nor is the “type of” versus “this language for this situation” valid reasoning.

State Farm also tried to argue that only someone who has an “intrinsic relationship” with a car can be said to “occupy” it, and hence the court ought to be examining whether Ms. Bennett has such a relationship with the car that struck her. Instead, the court observed, there was an authority in Ohio, where this suit was brought, that the intrinsic relationship test was one of several that can be applied “‘where a  gray area exists concerning whether a person was an occupant of a vehicle and thus entitled to coverage. In this case, however, the policy marks out its zone of coverage in primary colors. The policy terms therefore control.”

On this ground, the court reversed the district court and entered judgment in favor of Bennett. And it did this without remanding.

One can wonder about the decision. Oddly enough the court does not include a quote from the policy. That is unusual but not really interesting as to the court’s reasoning. More interesting is the fact that the court does not give a specific argument–perhaps based on a hypothetical–supporting the proposition that being in a car entails the proposition that one is occupying the car.

It also clearly, though impliedly, rejects the idea that the term “on” in this situation is ambiguous. It seems to me that one can be on a car, e.g., on top of a car, without actually occupying the car. The man that washes, waxes, and cleans out my car every Saturday, does not occupy my car all the way through its work. He stands next to the car while is washing it; he climbs up on it to wax the top and gets in it to clean out the interior in various ways. It is plausible to say that only for the third part of the operation does he occupy the car.

Although the following example–nor anything like it–should ever be found in a brief (or anything like it), except as taken from a transcript of testimony. One can easily imagine a couple denying that they occupied the car while having sex on the front hood of the car (or even the roof), but “admitting” that they occupied the car when they did so in, for example, the back seat.

Perhaps–just perhaps–the court is impliedly suggesting that Bennett was occupying the car because she did have an intrinsic relationship with it. After all, she suffered further injuries as a result of being placed in the car–injuries that she would not have received had she not been knocked up onto the car.  I suppose one could argue that if one has been put onto something it occupies it.  One can easily have subscribed to this argument if the word is “into,” not “onto.”

One might oneself not be convinced by the court’s reasoning.  Consider the dog belonging to the 2012 candidate the Republican Party recently ran for president.  It did not occupy the family car when he was attached to the roof of the car as they all drove to Canada for a vacation.  The disclosure of this fact caused a furor. Obviously, part of the general population agreed: the dog did not occupy the car. In some respects, although certainly not in other very important respects, Bennett and the dog share properties.

*I tried “battle” rhetoric first long ago in the presentation of an argument to the 8th Circuit.  It was a covenant not to compete for the case with federal jurisdiction on grounds of diversity.  I had tried the case and lost. Anyway, I opened by informing the court that “This case is one of national significance.”  The head of one of the judges almost jerked up, and he immediately and a bit disdainfully asked, “How? Why?”  My answer had to do with the lack of case authority on how to interpret a “Uniform” act that had been passed in the relevant state.  I actually thought that a specialized uniform act, used in various ways around the country but enacted only here and there, made the matter then at hand one of national significance.  My clients loved it, but. . . . 

 I suppose  I must confess that my address there was not the last time I did that, though all the (few others, I hope and believe) were somehow triggered by a mysterious outside source, and therefore have been instances of unintended rhetorical idiocy so that  I am not really responsible.
Originally posted on 09/27/2013 @ 9:20 pmMichael Sean Quinn, PhD, JD, CPCU, Etc. (530)One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.
Read more from the same author:UNDERWRITING & CYBER INSURANCE COMING OF AGEPart I. Some Cyber Policies: Structure and Organization: Comparisons“PORTAL-ING” THE INSURANCE INDUSTRY INTO THE CO-CALLED “CYBER WORLD”Hits: 7

Read More

“Madam. Are you certain today?” [Sketch I]

There is a species of questions with respect to which witnesses (including expert witnesses) must be extra-careful. The category questions certainty. Often the question takes a simple and explicit form. The witness has said something clearly and straightforwardly, whereupon deposing counsel says to the witness:

Q. Are you certain of that?

Many answers are susceptible to this question.  It’s one of those questions where examining counsel does not really care what answer is given. Look at two alternatives:

A#1:  Yes.  I’m certain of that.

This answer will make the witness look arrogant, and it will subject her to impeachment later on at trial.  The impeachment will be presenting a whole group of situations that make the witness have to admit that she is not certain.

It was dark, wasn’t it, true?

You said the man you saw was about 5’6″, how tall is the woman sitting at the next table?

You didn’t have on your sunglasses, did you, even though it was noon in Austin on August 17th, true? 

[And so on and on and on.]

Now look at A#2:

A#2.  No, I am not certain.

Of course, then on direct examination at trial, or in settlement arguments, where the witness may not even be present, the side of the examining counsel will attack the witness for not really having trustworthy testimony.

How/z about this:

A#3. Yes, though not quite completely certain.  No one could be.

Much better.  Maybe best.  What is examining counsel going to ask next? All the choices I can think of sound intrusive, too perfective, even absurd.

Quinn on Answering Another really good way to deal with this problem is to challenge the question.  There are a number of ways to do this.  I will call them QWs after “Questions by Witness.” Try QW#1:  What do you mean by “certain”? Capable counsel might ask this question in response: Q#2  What do you mean by “certain”?  Ways to deal with this second question is to say: A. The term “certain” can be used in a variety of different ways. And the discussion will go on for a while. The witness can look like she’s avoiding giving a reasonable answer. So consider trying these.

A#(i).  I think so.A#(ii). It depends on what one means by “certain.”A#(iii). Well, it’s an empirical matter, not like mathematics, so no reasonable person can be absolutely certain. Given that caveat/limitation/caution, yes, I’m certain.A#(iv).  Certainty is a psychological state.  It has nothing to do with justified true belief.  I have the latter three.

Personally, I like A#(iii).  The witness looks reasonable and it is very difficult to challenge the idea that no one can be absolutely certain about purely empirical matters.

I like A#(iv) too but it’s complicated. Still, probably most people will agree with it.

I have heard “idiot” lawyers try this one:

Q. Are you certain?A. Yes. Q. Are you absolutely certain?

The lawyer has dug a deep hole for himself.

A. There is no such thing.A. Only a dogmatist fool would ever say something like that about this kind of matter.A. I don’t understand the difference between “certainty” and “absolute certainty,” althoughI’m certain you must think there is.

Quinn’s First Comment: This lawyer should get an award from “the local” of “Questionable Dumb Bell.”

A questioning lawyer may object on the grounds that the answer is not responsive, and try to get another answer. Protecting lawyers should argue against this. Here’s one way: “Yes it is. Move on.”Here’s another way. “Please explain your objection. Why isn’t what she said responsive?”  Protecting counsel might consider trying “another” way first and then go to the first way second.

Quinn’s Second Comment:  A witness should be prepared for this kind of question.

Quinn’s Third Comment: Try this. Without saying anything as a preference: “I am certain, though not completely certain.”

Quinn’s Fourth Comment: Try using responsive questions:

Q. What do you mean by ‘certain’?

This may generate a responsive question:

Q. What do you think the ‘word’ means?

A. There are so many meanings, Tell me what you are thinking.

And so forth.

Quinn’s Fifth Comment: Try to shift the discussion to the meaning of “sure.”

Q. Well, OK, you are not certain about X because you view if the world is that one can not really be      certain about anything.  Of course, lots of people would disagree with that.  You know that don’t you?

A. I think so. And lots of people say that sort of thing.

Q. You not willing to say that you know that people disagree with you>

A. Knowledge and certainty are not the same things.

Q. OK. Let’s try it this way.  Are you sure about what you have said?

Elaboration on Quinn’s Comment: Above all, the witness should say something like this, “I’m not sure what the difference is between being sure and being certain.  I’m not sure how to talk about this, and I’m not certain how your question works.  Please give your definitions.”
Originally posted on 09/03/2013 @ 2:46 pmMichael Sean Quinn, PhD, JD, CPCU, Etc. (530)One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.
Read more from the same author:UNDERWRITING & CYBER INSURANCE COMING OF AGEPart I. Some Cyber Policies: Structure and Organization: Comparisons“PORTAL-ING” THE INSURANCE INDUSTRY INTO THE CO-CALLED “CYBER WORLD”Hits: 7

Read More

The Insurance Appraisal Process–Part I

Insurance Adjustment and Appraisals

Part I There are two types of appraisals. Those performed by one person, e.g., that of artworks, the value of the real estate, etc.  The others are performed by perfectly stable committees as to size, e.g., those consisting of X number of persons all through the process, and usually there is an odd number. Then there are less than stable committees as to size; those expand if the first member cannot reach a decision. Insurance appraisals are of the last type. They start with two members and then expand to three members of the two original members who cannot reach a solution or do not do so over a reasonable period of time.

One purpose of the appraisal is to reach a solution as to the size of the insured’s damages and the amount the insurance company shall pay.  It is designed and intended to shorten the length of time arguing over disputed amounts both with respect to probability and its amounts.  At least, in theory, the language of the clause explicitly states that the amount of recovery is THE issue. Courts and litigant-participants don’t always either realize.  Or maybe they know it, but just ignore it.  This is a fact I shall ignore in this set of posts. 

In order to discuss appraisal in a meaningful way, it is necessary to have the contractual provision clearly in mind. It is a standard provision included in (at least virtually) all first-party property insurance policies unless deleted.  It is currently found in the ISO “form” property policies, and it has been there for several generations, whether residential or commercial. 

Appraisal clauses are to be found in insurance contracts all over the world and are not restricted to first-party property insurance.  It generally applies to first-party insurance of all types, including for intangible “objects” and/or “processes.”  They are found in the “Conditions” section of the ISO policies.

The ISO language, entitled “Appraisal [,]” is as follows:  

If we and you disagree on . . . the amount of the loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:

Pay its chosen appraiser; andBear the other expenses of the appraisal and umpire equally.If there is an appraisal, we will still retain our right to deny the claim.

Appraisal clauses are enforceable by legal process under a variety of circumstances, usually when an umpire (“Ump”) has decided the issue. It is extremely difficult to avoid the enforcement of an appraisal by judicial process; it very rarely ever happens, although it should happen more often when a principle of sound adjustment appraisal has been violated by one or more of those doing the appraising. Almost always these violations are connected with Umps.  (I will return to this topic.)  Appraisal clauses are enforceable under a great many circumstances, and the finality that often goes with them is quite often enforced. Dividing up the clause and thinking about it step-by-step might be a good idea. The propositions shall be entitled “P,” and numbered, e.g., “P#76”, to create a fictional number for illustration. Some of the following are explicit requirements found right on the surface.  Others are just under the explicit wording:

P#1.    There must be a written demand for an appraisal of the loss.P#2.    There must be evaluations of the amount of the loss by each of the appraisers.P#3.    There is no reason why the appraisers may not try to reach an agreement on their own. The probability of reaching an agreement is increased by there being separate thinking and cooperative mutual discussions and dedication.  An appraisal is not intended to be adversarial advocacy. P#4.    Each appraiser nominated by either side must be competent.P#5.    Each appraiser nominated by either side must be impartial.P#6.    Together with the appraisers “will select” and appoint [or attempt to appoint] an umpire.P#7.    If they cannot do so, either party may request that an umpire be appointed by a judge of a court of jurisdiction.P#8.    Each of the appraisers shall, separately, state [presumably in writing] both the value of the property and [the] amount of loss.P#9.    If their statements are not in agreement [or if they fail to agree otherwise], they will submit their differences to the umpire.P#10.    If two of the three agree then that agreement is the result and it is binding. I now turn to an analysis of the propositions and express opinions. [For obvious reasons, the ump will be one of the two.] The propositions, unamended and unsupplemented, are to be found in virtually all property policies. Of course, they can be changed by agreement, and they can even be eliminated, but both of these are very rare, and they never happen at all in smaller policies. There are some variations, and one will be discussed later.

Part II will be mostly concerned with analyses of the forgoing “Big Ten.”
Originally posted on 09/02/2013 @ 8:28 pmSeries NavigationThe Insurance Appraisal Process–Part II >>Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.
Read more from the same author:UNDERWRITING & CYBER INSURANCE COMING OF AGEPart I. Some Cyber Policies: Structure and Organization: Comparisons“PORTAL-ING” THE INSURANCE INDUSTRY INTO THE CO-CALLED “CYBER WORLD”Hits: 7

Read More

Cyber-Insurance & “Established Insurance” Compared–PART #2

All insurance involves the transfer of risk(s).  One party (or one group of parties) obtains value protection 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 “misplaced,” a whole set goes now the sewer, a building burns down, a person sustains a bodily injury from a doctor who operated on the wrong wrist, a medical bill that has to be paid, a debtor hasn’t paid a bill, and so forth.  Not all protections from risks are insurance; the use of a security interest, for example, in the loan transaction, illustrates this point. Not everyone who has some sort of transactional assurance of little to no loss has insurance.  Interestingly in England, some of what are uniformly called “insurance policies” in America are sometimes called “assurance policies,” and what is called “insurance companies” in the United States can be called “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 contains 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.  Each one of these cyber-liabilities will have an 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 the 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.  It 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 the 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 which occurs sometime after the commencement of the policy.  That period is usually two years.  I cannot think of an analogy in cyber insurance[cm_simple_footnote id=”1″].  Of course, life insurance itself will be involved in cyber-insurance arrangements, but it will probably be 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 that 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 a physical object, since they are now covered).  Here are at least some examples of tort theories that will be 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 privacyInterference with contractInterference with the economic positionstrict 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)nuisancefraudmisrepresentationerrors and omissions type torts (These are really a kind of negligence, at least usually.  But they are specialized): lawyersaccountantsbrokers of various sortsthird party managers, administrators, and/or quasi-agents (Some insurance adjusters are like this.)designers of codes, etc.encryptions, etcfirewalls and similar devicessimilar safety measuressimplicity

intellectual-property torts: wrongful use, wrongful acquisition, wrongful imitation, etc.  Imagine using computer hacking to obtain a patented plan for something, then destroying the owner’s plan, and then putting the plan to one’s own use and the list goes on for a long time.

No doubt the reader will have noticed that the concept of negligence is a complex and widespread type of concept across all of human behavior and covers an enormous range of possible damages.  The reader may think of anything s/he can which causes damages to someone other than the “actor,” or some related parties, and negligence will exist in cyber-law and cyber-insurance law.  Not all kinds of injuries and therefore not all kinds of damage will be.  This is one place where there may be a whole variety of alterations needed and provided.

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.
Originally posted on 03/22/2013 @ 4:31 pmSeries Navigation<< “Cyber Space” Insurance–Part ThreeCyber-Insurance aka E-Commerce Insurance–Part #1 >>Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.
Read more from the same author:UNDERWRITING & CYBER INSURANCE COMING OF AGEPart I. Some Cyber Policies: Structure and Organization: Comparisons“PORTAL-ING” THE INSURANCE INDUSTRY INTO THE CO-CALLED “CYBER WORLD”Hits: 7

Read More

Cyber-Insurance aka E-Commerce Insurance–Part #1

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 used for a long, 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 the 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 and very briefly sketch some of the currently 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 are not many 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 and conjecturing about the future, and there are 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 is 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 sourcebook. No doubt, one of the reasons for the absence of a 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, 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 things free identity theft insurance up to $25,000.00 to its customers as part of a remedy following an identity 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 further.  This matter is called 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 an actual already existing injury is not an iron-clad requirement for a right to proceed, at least under some circumstances. 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 bottom try 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 part 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 agreements 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 the 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 layperson, the definitions are obscure.  (This is not necessarily a matter of great consequence, since definitions in engineering malpractice policies are also quite difficult for the layperson–so much so that expert witnesses 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 the 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, specially 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 is 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.  They have usually conditioned precedents and there are a few conditions subsequent. Among the best known of conditions are the insured’s 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 no 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, the 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 up. The ordered list of entries is 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 homeowners insurance, and indifferent 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. 
Originally posted on 03/21/2013 @ 10:02 pmSeries Navigation<< Cyber-Insurance & “Established Insurance” Compared–PART #2Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.
Read more from the same author:UNDERWRITING & CYBER INSURANCE COMING OF AGEPart I. Some Cyber Policies: Structure and Organization: Comparisons“PORTAL-ING” THE INSURANCE INDUSTRY INTO THE CO-CALLED “CYBER WORLD”Hits: 7

Read More

The Prudent Expert Witness: Agreements and Performance, #1

I do some expert witness work, so this blog entry contains some experience-based remarks about retainer agreements and some aspects of expert witness performance.

Alas, I have not used formal retainer agreements much.  Usually, they have been in the “back of the envelope” form, or they have been oral.  Part of the reason for this is that a good deal of my work has come from, or through people I know; lots of it comes from lawyers and clients (sometimes theirs and sometimes mine). From time to time, I dictate what I want and have them send me an email, and that seems to work, but it leaves out important matters, I will set forth presently. A few times my informality has been a bad idea. As a result, I have repented (more or less). So, I will discuss what belongs in a form agreement for expert services, as I see it. I will also discuss some of what I regard as, features of sound performance. Sometimes, at least, matters of sound performance can be included in the retainer agreement. The following are lessons based on issues I have had to learn the hard way.

Lesson One:  Get a clear description of the scope of the assignment and then change the scope, both outwardly and inwardly, if and when it changes. 

Lesson Two:  Find out what experienced experts are charging in “your” area and start there. Warn of probable changes which should be expected over time. Often lawyers resist paying you more than they are billing. This is probably a reasonable idea with which to cooperate, at least most of the time, but only if their fees are reasonably high.  Charitable expert witnessing is to be avoided.

Lesson Three: Make sure the retainer is both reasonable and sufficient. Consider making the retainer amount stay ahead of the payment of bills. (My retainer is $X; it must stay at $X at all times.” This agreement is frequently not possible—or at least too difficult–to arrange. 

Lesson Four:  Insist that the bills be paid on time. A way to do this is:  “If I have not received a check within 30 days of my billing you, I will perform no further work until paid.”  Often, I cannot make this happen.  Sometimes I try to get paid on a quicker temporal schedule.  That seldom works.

Lesson Five: Try to get their client or the lawyers themselves to pay all out-of-town expenses.  Sometimes one can get this and sometimes not.

Lesson Six: Try to get people to come and see you.  They will want to do this anyway if your office is in an attractive city.Exception:  You really want to go there.  Sometimes the taking of a spouse is a good thing for mostly non-professional reasons.

Lesson Seven: Expect corporations to pay you faster than people and people faster than insurance companies.

Lesson Eight: Consult with the lawyers about the contents of your reports, etc.  Do not let them assist you with prose, except with problems of prose: spelling, grammar, etc.   Let the lawyer assist you by stating facts you have missed, not understood, and/or not appreciated.  Don’t always believe them.  Confirm everything yourself.  Do not accept the lawyer’s intense use of colorful language even if you believe it.  You are a reporter and a historian, not an advocate.  This one has been very hard for me and I was kicked out of a case by the judge once for making this mistake.

Lesson Nine: Always remember that experts’ opinions take an “If-then” form.  It should never take a “This is ‘It'” form.  Undisputed facts are exceptions.  Obvious and undeniable facts are another.

Lesson Ten:  It is law-school-level truth that expert witnesses are not permitted to testify about the law.  Don’t bet on it.  For one thing, if you are testifying about some industry practice, you may have to refer to the law by talking about what is generally understood about the law.

Virtually all of these “Lessons” have, not only practical implications but can—in various ways—be set forth, to some extent, in retainer letters. On this matter, tact and restraint are required.             
Originally posted on 03/11/2013 @ 8:18 pmMichael Sean Quinn, PhD, JD, CPCU, Etc. (530)One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.
Read more from the same author:UNDERWRITING & CYBER INSURANCE COMING OF AGEPart I. Some Cyber Policies: Structure and Organization: Comparisons“PORTAL-ING” THE INSURANCE INDUSTRY INTO THE CO-CALLED “CYBER WORLD”Hits: 7

Read More

Creations and Insertions into Existing Contracts Part II

In my last post 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 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.—MSQ

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, 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 elsewhere 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.
Originally posted on 03/08/2013 @ 5:41 pmMichael Sean Quinn, PhD, JD, CPCU, Etc. (530)One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.
Read more from the same author:UNDERWRITING & CYBER INSURANCE COMING OF AGEPart I. Some Cyber Policies: Structure and Organization: Comparisons“PORTAL-ING” THE INSURANCE INDUSTRY INTO THE CO-CALLED “CYBER WORLD”Hits: 7

Read More

Lawyers, Election Law, Jurisprudence, and Proper Governance


Factions and therefore political parties are something that acutely concerned many of the “Founding Persons,” of our republic e.g., both Washington and Madison, among many others. 

Political parties are a paradox. At the same time, they are both required for large democracies and a threat to them. 

In elections, the applicable law must be followed–something all reasonable lawyers and most other citizens know. 

One wonders if parties and political figures alike have a moral obligation–all republics and all democracies include moral or ethical obligations as to political conduct as part of their constitutive structures–to conduct elections in accordance with other principles as well election laws.  —MSQ

Suppose it is within the law for a candidate to actually or impliedly threaten opposing candidates and those who support them with jail (prison) terms simply for their opposing him/her. Most of us would agree that this is not an acceptable way conduct political campaigns in a republic or democracy. It seems to me that knowledge of this is especially true of lawyers. 

Now, what about the following statement, whether clearly and explicitly made or clearly implied:

“If I do not win this election, I will refuse to leave office and simply take over. Votes cast be damned.” —MSQ

It might be within free political speech to say such things, but is it within the sound jurisprudence of election law?

Wouldn’t ethical principles forbid this kind of threat and negativity?

Does it not undermine fundamental principles of both democracy and the principles which make a country a republic?

Does it not disrespect the country and its essence as well as its constitution?

Does it not remind historically oriented lawyers of “Natural Law,” something which was guiding principles of the foundation of our republic?
Originally posted on 09/25/2020 @ 5:20 pmMichael Sean Quinn, PhD, JD, CPCU, Etc. (530)One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.
Read more from the same author:UNDERWRITING & CYBER INSURANCE COMING OF AGEPart I. Some Cyber Policies: Structure and Organization: Comparisons“PORTAL-ING” THE INSURANCE INDUSTRY INTO THE CO-CALLED “CYBER WORLD”Hits: 7

Read More

Expert Witness–Testing for Legal Sufficiency


The Texas Supreme Court recently wrote a case which surely contains the most important discussion of thinking about expert witnesses it–or any other court anywhere, for that matter–has set forth for many years. Houston Unlimited, Inc. Metal Processing, [Defendant-Petitioner] v. Mel Acres Ranch [Plaintiff -Respondent], 57 Tex. Sup. Ct. J. 1223m 2014 WL 4116810 (August 22, 2014.)* It is not only a discourse on juridical epistemology; it is also a how-to manual for both judges and advocating lawyers.  I will discuss details in another post (or other blogs). For now, here, I shall quote one of its most important observations:

“Experts who testify on behalf of parties to a lawsuit are subject to biases and potential abuses that are not always present outside the courtroom, and the courtroom itself may afford a veneer of credibility not present in other contexts. Legal sufficiency review requires courts to ensure that a jury that relies on an expert’s opinion has heard factual evidence that demonstrates that the opinion is not conclusory on its face.”Houston Unlimited, Inc. Metal Processing, [Defendant-Petitioner] v. Mel Acres Ranch

*This opinion can be found on the Court’s website. It is easily locatable.

**As shall be shown elsewhere, the wording is a bit misleading and could have been done more accurately from a semantic point of view.
Originally posted on 11/18/2014 @ 3:01 pmMichael Sean Quinn, PhD, JD, CPCU, Etc. (530)One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.
Read more from the same author:UNDERWRITING & CYBER INSURANCE COMING OF AGEPart I. Some Cyber Policies: Structure and Organization: Comparisons“PORTAL-ING” THE INSURANCE INDUSTRY INTO THE CO-CALLED “CYBER WORLD”Hits: 7

Read More



Sean Quinn
1300 West Lynn Street
Suite 208
TX 78703
(512) 296-2594
Cell Phone: (512 656-0403
(512) 344-9466

All underwriting of individual policies,
or very similar contracts, can be divided into four parts.  The parts are stacked on top of each
other.  The parts are “Everyday
Underwriting,” “Mid-level Underwriting,” and “Creative Underwriting”; each of
these parts has its own internal range. Finally, at the very top, there is “Managerial
Underwriting.”   (These names will no longer be in quotes.)  The educational literature contains nothing systematic on underwriting in the so-called “cyber-world,” and little on it at all. In fact that literature is weak.  See Joseph F. Mangan & Connor F. Harrison, UNDERWRITING PRINCIPLES (2nd Ed. 2000), Hank George, UNDERWRITING: WHAT EVERY PRODUCER MUST KNOW (2009), and Joseph F. Mangan and Connor Harrison, ADVANCED UNDERWRITING TECHNIQUES (2nd Ed. 2002).

Remember. An “individual policy” can
cover a whole fleet of entities, whether trucks, boats, planes, or anything
else. What’s in the fleet need not be even nearly identical, except to fall
within a given category.  Even planes
which can also work as boats can fit three different fleets: planes, boats, and
motor vehicles.  It can fit into all
three at once, and have different insurance for each separate function.  Welcome to underwriting.  (Also keep in mind that there is no such
thing as insurance under-righting; this should not be different, since, in
fact, there is now such thing at all.)

            This essay is intended to outline
how systems of underwriting departments are structured, and what problems this
may have for insurers as they become more and more integrally active in the
so-called “cyber-world”—a widely used but wretched phrase, if ever there was
one. Here are some sample cyber underwriting questions.  How should a policy
be designed that is to cover warranties on the design and manufacture of
digital systems? How should that kind of product liability be conceived for
liability insurance?  How should storm
damage be insured, if at all, when it comes to various categories of cyber stuff?
How should the new categories be conceived, written, priced, advertised, and so
on? What about insurance for ransom demands pertaining network-napped systems?
Or for cyber extortion? What about hacking by employees? Or negligent losses by
employees of actual computers and thereby their “innards,” as it were?  Or illegitimate use of computer systems by
employees whose uses accidentally create a hack-portal? And so on “forever.

Some of it is a bit more theoretical,
not to mention philosophical and prophetic. 
Some might think that the higher levels of what I am suggesting is
nothing but intuitive, and a few might wish to characterize it as
In addition, although virtually all levels of underwriting use “underwriting-centric software, the complexity of that material is directly proportional to the level of the underwriting function. Still, as of a year or so ago, specifically for it and it alone.  Some underwriting groups simply designed or customized  and used their own. This situation has made integrated communications difficult when different types of data are involved.  The same difficulty applies when underwriters reach out for risk information, and the more intricate the more difficult. This kind of complexity and creativity is not the topic of this blog-essay, however, nothing more will be said about it. See, Gail McGriffin (at Ernst & Young), Underwriting Technologies Matures: The Birth and Rise. (

The “cyber world,” if that is what one
wishes to call it, is a “new world,” and so insurance and therefore insurers
and therefore underwriting must adapt and be transformed to grasp and handle its
wakes and probable (even possible) future causes of further wakes.  Given the still existing alien nature of the
so-called cyber-world, it is no wonder that an acceptable characterization of
insurance underwriting in this rapidly changing environment. 

That “world,” or that part of our world,
feeds underwriting all sorts of problems arising from all sorts of inescapable and
uncontrollable “quickeries”—birth (new product, new policies), hi-tech development
(and so new parts or new twists in policies), a spread in cyber-ness,
cyberality, cyber-centrality, in addition more and more insurance transformations
needed for the next round of cyber changes, all coming at an exponential
rate.  In addition, all of this is taking
place in the vortex (or vortices) of  what can best be called “stormy socio-politico-economic

Where is all this information to come
from” The understandable  literature?
Advisory consulting groups? Research groups? Risk management companies? Large firm intermediaries (aka agents and/or brokers), e.g., Aon, Marsh, Lockton, etc.? Some of
all this is to be found in reported legal decisions which are difficult for the
many to understand but partly on the basis of which, underwriting decisions
must be made.  

It is no wonder that the underwriting
world feels (metaphorically speaking)  grabbed, shaken, whipped, and nearly strangled
by the collected components  its new-ish, still
strange and very alien environment. As learned and reliable insurance underwriting
has entering and is coming of age in so-called “cyber space,–really just
another name for “cyber-world”– it had and still has no consistent, reliable
and universalistic methodology for collecting, systematizing,  blending, analyzing and using it to make
unquestionably reasonable reliable linguistic, semantic, structural, sales and
distribution decisions.  Underwriting is
afflicted by the disorder of  untrustworthy epistemology: no reliable
history, no rock solid actuarial foundations, only fragmentary and questionable
statistics, and the curse of having to use the language of “yesteryear” in our
whole new world. (A world in which most people are still stumbling around.)

Think about changes in underwriting when
commercial sailing vessels powered by wind changed to wheel driven ships
powered by burning wood, wood and then moved along by metal propellers powered
by diesel.  Significantly, all of this
happened relatively slowly. Keep in mind that wind driven ships and insurance
lasted together, albeit sporadically for well over 1000 years. Paddle wheelers
stayed around for more than 100 years and were never really ocean-going. And
ships metal based in part have been with us for well more than 100 years. 

Insurance underwriting has been
confronted with new problems slowly. 
Even now it is confronting a new realm as cyber technology as
transformed maritime transportation and therefore maritime insurance.  (The May 12, 2014 issue of BUSINESS INSURANCE
contains several articles on exactly this matter.  The central one is entitled Marine Sector Struggles with Cyber Risks.)

Hull insurance in contemporary
commercial aviation has a set of cyber problems, even though the industry is
younger—probably around a 100 years or so—and involves different equipment
(obviously enough) and probably a more complex financial system, at least
because there are 1000s more separate flights every day than there are journeys
on the high seas, large lakes, deep rivers, and canals.  No doubt the complexity of the cyber
equipment is more complex on airplanes than on even the largest ships, given
the speed at this the insured entities are traveling and where they are in
relation to the surface of the earth.  Commercial
jets are a jungle of enormously high speed cyber systems. For discussions of
the insurance niche when it comes to commercial aviation, see Peter Greenberg, The Big Money Surprise About MH370, 169.7
FORTUNE 11-14 (May 19, 2014). [MH37 is the Malaysia Airline jet that was lost
in the Spring of 2014.)  (This article
points out how fast hull insurance, as opposed to personal injury claims, including
death claim,  is paid and how many
insurers may be involved in insuring on hull, e.g., one for some “ordinary
physical destruction” and one for terrorist caused destruction.  Greenberg does not discuss reinsurance and
its levels. Nor does he draw a distinction between total and partial
destruction, and he says nothing about cyber complications. No doubt the cyber
category creates a whole new set of problems

At a more big picture, indeed, grand,
level, think about the industrial revolution and its aftermath.  Property insurance began to come of age
slowly in the Eighteenth Century starting with the spread, as it were, of fire
insurance, that started in “dribs and drabs” in the previous century, and then
very slowly expanding out from there. It has now been called the “First
Industrial Revolution  It came about in a
mere couple of hundred years, or—maybe—a little less. Then we had a “Second
Industrial Revolution”; it has lasted around 150 years

That seems fact to those of us that
studied economic history in university, but it is nothing compared to
what we are talking about as hi-tech history up to know and on into the
further.   See Erik Brynjolfson &
see this as a “Third Industrial Revolution” but mostly call it the “Second
Machine Age”; they do this in order to emphasize that its essence is to produce
knowledge of a new kind and at a different rate.

While all of these observations and
speculations are true, two important relatively unrelated points should be
made. Senior level underwriters are faced a truly breath taking array of pressing
and significant problems, even outside the so-called cyber-world.  I say “outside” because elements of the cyber
world now permeate the so-called real-world. 

Consider for example the following.  At first it seemed to many that cyber
policies would cover both “far off” cyber entities and the “close in” already
familiar entities.  Material (or physical
objects) were the paradigm. But the mixture of categories did not work well for
a variety of reasons.  As a result
insurer began trying not to pay for things like software when it was
damaged.  Sometimes they succeeded, sometimes
not. After a while, they began to construct new exclusions, and they have
worked: most cyber entities got excluded. 
Thereafter, some insurers began to exclude in so-called real-world
policies—like CGL derivatives–all coverage for event having principal causal
bases in so-called cyber-space. That has worked too.   The trouble was an is that there had to be
policies that mixed the so-called different worlds together.  No easy task. 
It will get harder.  How should robotic
devices be insured?  All sorts of things
can happen to them.  They could wreak all
sorts of havoc, whether at directions from some human or some other robot or by
some defect inside itself—whatever “inside” might mean.

The overall pressure an underwriters is
immense. As I contemplate their burden I am put in mind of the famous Munch
painting(s)—the one(s) on a bridge and other than the “Madonna.” In my view the
frontline underwriters should not only be lauded, they should be regarded as
something like heroes of a commercial and insurance revolution.  (When I say “insurance revolution,” I am not
suggesting that fundamental principles will change; the “Principle of Fortuity”
will not change but a great deal that surrounds it will.)

Since this is the digital age, virtually
all of every underwriters work is paperless or nearly so. In addition, all underwriters work
together at some time and in some way. 
“Round Table” discussions are common now; groups that talk to each other
with different ideas plus civil and suggestive criticism is always a source of
improved thinking.

 Even today, they are almost always “vertical”
to some extent.  This means that the less
experienced are sitting together with the more experienced and more
knowledgeable.  This organization,
however, must be, and usually is conceived as a sort seminar, as well as other
things, so that ideas can be exchanged and debated and  the less experienced and  knowledgeable 
can gain from the more so. Practical wisdom can sometimes be derived
from these sessions, whether they are regular (“Every Thursday morning at 7:30
both face to face and on Skype [or its progeny].”), instantaneous (“Good God.
We all need to talk about this.  Get it
set up right quick.”) or irregularly as needed.  How vertical practice will work in the cyber
world is not yet clear.  One must be
inclined to think that at some level of cyber-techno-learning, and further
development of education, etc., plenty of such help will be integral for years
to come, especially given the speed of innovative development. 

Now let’s take a look at the four
levels.  As the paragraphs go along the
reader should keep in mind how changes in underwriting will function, how the
relationships between underwriting and adjusting will work, and how the setting
of reserves can be done when insurers are awash with rapidly moving tech

            The function of Everyday
Underwriters is to review routine applications, look for problems in them, seek
to correct the problems, accept or reject applications, handle pricing within
certain specifications, add some standard form endorsements, instructions for
issuing digital dec sheets, deal with intermediaries on routine matters, for
example, answering some relatively uncontroversial questions, dealing with adjusters
asking questions (for example, when one of them asks a question about the
company’s reading of the policy), have work reviewed, handle some audits of other
everyday underwriters, very seldom answer outside lawyers’ questions, even more
seldom attend deposition, quite rarely be deposed as to what s/he has done, and
perhaps rarest of all, be deposed as a 30(b)(6) type witness. And, of course,
there are other activities as well.

 How routine this type of underwriter’s work is
depends upon his/her level of experience, accomplishment, intuitions,
articulateness, and so forth.  As already
indicated, there is a range of activities this type of person performs. 
As a general rule, intermediaries do not play a significant role in underwriting at this level, except to be a purchasing agent. Usually they are independent contractors, and that is the way insurers want to look at them. It may be difficult to convince others of that view if the agency has the same name as the insurer, at least roughly speaking.  Consider an agency named “State Farm.”

            Mid-level underwriters do much of the
same sort of thing, but for more complex policies. They have more authority to
add, subtract and alter endorsements. They also supervise Routine Underwriters
(and lower level “Midlevels”), provide advice, conduct Roundtable Discussion
Meetings, and report. They are managers, internal consultants, representatives from appropriate intermediaries, insurance thinkers,
etc.  The size of policies with respect
to which they have substantial authority may be quite large, and their size is
likely to grow over time. 

Their involvement in litigation is
higher than the Everyday Underwriter and quite often larger than that of the
underwriter of even the Creative Level. 
At the same time it is true that in some litigated cases, the insured
seeks to exclude underwriting files from discovery, and they often succeed
except in quite large cases. All underwriters are “isolated” and “protected”
from policy holders, third parties, and the general public.  The closest to the public is underwriter
education conferences, at least as a general rule. At the same time, it is
worth notice that some large underwriting operation have members that more or
less specialized in litigation involvement—as 31(b)(6) witnesses—and otherwise.

Creative underwriting is quite different
from the other two, and even separated from them, in many areas of
responsibility, except with respect to various kinds of leadership, teaching,
and  dialogue. Creative underwriters are,
to a considerable extent, designers of a great many things.  They too are thinkers—imaginative thinkers.

Often their work is done in groups, to some extent, some
of them internal to the company and some of them not.  Those outside the company can include
companies that design standardized policies, industry representatives, other
insurers, reinsurers, brokers, groups of brokers, various businesses of
professional associations, sometimes interested governmental agencies,
sometimes lawyers, and occasionally academics, often from B-schools.

Here are some examples of their topics;
it is incomplete: new policies, new parts of new policies, revisions of old
policies and old parts, principles for conducting sound underwriting at various
levels, the types of activities to cyber-insure and how, what perils to insure
and how, what types of persons in those areas to avoid insuring, what
preconditions to impose, what continuous acts, omissions to require or forbid
during the coverage period, and so forth.

Their creative thinking has become
especially exercised in even more comprehensive ways with the coming of the
early stages of e-insurance in the populous cyber-world. If it needs
insurance—and it does—it will fall to the Creative Underwriters to design the
policies the new era, participate in creating a corporate structure for dealing
with what has been designed.  Of course,
this creates ever closer relations with senior management of the insurer.

Naturally, Creative Underwriters are
connected—sometimes closely connected—with the finance side of the company,
regarding general conceptualizing of pricing and how to handle adjustments to
it and regarding how create, digitalize, and allocate reserves.  One of the most interesting things about
Creative Underwriting in the cyber age is how to determine the basis point for
various types of cyber-insurance when there is vastly insufficient actuarial
and other information usable to rationally and confidentially ordain a reasonable
starting point for large segments of cyber realms; this is not guess work for
this or that policy;[i]  it is a much larger group. 

All of the same points apply to
formulating principles for setting reserves. Of course, doing that is a
function of senior, experienced adjusters. 
But building its connection to pricing falls in part to the underwriting
department. Sometimes intermediaries can help.

Even trying to figure out how to think
about diverse sectors of the realm is guess work to a considerable extent.
Closely connected activities will be quite different with regards to
pricing.  Consider liability coverage for
network injury as opposed to privacy intrusions through networks.  Consider first-party coverage for extortion
versus “network-napping.”  Of course, the
list goes on and on and on.
Before proceeding further there is a paradox involve in some activities of more sophisticated and “deeper” underwriters.  Sometimes they like to conceive of themselves of not really having to understand the language of the policies they underwrite.  How they can think of themselves that way is beyond me.  One cannot decide whether to insure a prospective policyholder without understanding what the risks and perils are, what will be covered and what will not, as well as what kind of business the customer is in.  Some of this cannot be done without having beliefs about the contents of the policy, and one cannot have that knowledge without having reasonable ideas about what the language of the policy means.  One does not have to be right–though s/he usually will be. But one must have an semantic understanding, and it must be reasonable, if the underwriter’s job is to be well done.  It is also impossible to price policies in reasonable ways without some probable understanding of what’s in the policy.
I have seen a particularly striking case of this paradox in testimony.  Consider testimony that goes like this: 
 Q. As an underwriter would you agree with me that the terms of the policy control what is and what  is not covered. 
A. Yes, of course, although even if something is covered under the insuring agreement it may be   “taken out,” so to speak, by an exclusion. 
Given the underwriters answer, it is impossible for him to know what is covered and what is not. If s/he doesn’t know this, what is he actually doing. I wonder if the witness knows what a “sinecure”is. 
There are other errors than can, as they say, pile-on when there are mistakes like this.  For example, one of the things underwriters do is to “write” the policies.  This activity may be actually writing them, writing part of them, putting them together, selectively picking them selectively off shelves, adding specialized endorsements to standard language (say, where there are multiple endorsements to be had), or review (and therefore to some extent editing them) what someone else has actually “written.”  The broker (or intermediary) may be the “actual” writing entity.  In all of these circumstances the underwriter must understand the language of the policy to a reasonable extent and face up to the fact that s/he may makes mistakes, hopefully reasonable ones.
It’s easy to understand what is worrying the underwriters when they testify on the contents of policies.  They are trying to avoid getting the insurer stuck with the wrong meanings in the contract and maybe be guilty of insurer bad faith.  But the alternative is even more devastating.  Contracts are entities essentially involving language and if a party claims not to have a clue as to what the contract terms might mean, they look like incompetent business entities.  The maxim “Policies holders are expected to know what is within their policies,” applies to insurers; “Insurers are required to know what is within their policies.” This requirement is not restricted claims adjusters.  Indeed, an adjuster’s seeking meaning is one reason s/he might visit with an underwriter. 

It must be conceded that large policies
covering enormous groups involve quite different  amounts of information, the handling of it,
storage of it, help writing up use manuals, or the supervision of their
preparation and alterations, and (last here but never ever least) policy
pricing. The same three parts continue to exist, but the responsibilities start
higher, are more complex at virtually all levels, and require more massive
negotiation strategies, if not exactly goals. 
Some health coverages, some municipal coverages, and some large group
coverage like professional coverages, e.g., coverage for physicians and perhaps
cyber-“architects” may be like that.

levels of insurance may often be involved in underwriting thinking. In theory,
the three parts of underwriters apply to underwriting at the first level
reinsurance and (climbing up the ladder) to retrocession reinsurance, a species
of the first “re,” as well.  Granted,  the three parts of underwriting apply to the
two, only at a distance, conceptually speaking. 
There are at least two reasons for this fact.  One of them is that the some of the underwriting
work amongst both types of reinsures is derivative upon the underwriting of the
primary carriers.  Another is the
existence of the “follow the form” and/or the “follow the settlement” clauses
found in contracts of reinsurance.  A
third is that reinsurers do not usually have the large underwriting staffs of
big-time primary, and excess, carriers. (See Reinsurer Interest in Cyber Products, THE BETTERLEY REPORT BLOG ON SPECIALITY
INSURANCE PRODUCTS (May 13, 2013) (providing mention of the Reinsurance
Association of America on  May 21 2013.  There is a video attached.  For a discussion of RAA, see Cynthia Lamar
and Bradley L. Kading, An Introduction to
the Reinsurance Association of America, REINSURANCE NEWS 17-22 (August
2004). Mangan and Harrison’s ADVANCED UNDERWRITING TECHNIQUES’ Chapter 1 is entitled “Reinsurance.”

One interesting feature of
cyber-policies, which can make the underwriting simpler,  is that, while the really interesting
features of these policies, is their peculiarly cyber content, some of the
policies cover some ordinarily business risk problems, both internal and external.
None of them cover all of them. Early in this blog, there was reference to
aviation hull insurance. Other cyber policies—most of them–exclude all such
coverages and thereby encourage insureds to look elsewhere for that kind of
coverage, e.g., those covering real-world business organization problems. This
too was discussed earlier in this blog.

Obviously, there are some business
organizations that now prefer to have them integrated.  That small visage of the primitive policies will
die completely out shortly, I conjecture, at least for larger commercial
entities, since it does not really help with risk management to integrate the
two into a single document, even if one of the areas is placed in an
endorsement.  It’s simply harder to read,
and there is too much danger of what might be called “hostile interpretative

One last portrait.  At least liability insurance policies can be divided into two claims categories.  In one of them covered events must occur during the policy period, whereas in the other it can occur outside the policy period.  Usually both types of policies fit together perfectly: auto crashes are like that.  They happen on Day#1 and are reported that day or on Day#2, more or less.  Policies that cover some types of injuries like asbestos bodily injury might be quite different: exposure to the injuring an covered peril  on Days ##1-300 but manifestation of the injury (or something like it) not until Day #6014. 

In contrast there are claims-made-policies, and they require at least that the injury from the covered peril be reported to the insurer during its policy period, and they often require both the cause of the injury and the injury itself to occur during the same policy period. (There are variation on this pattern where reports can come later, legal malpractice policies being one of them.)
Naturally, insurers prefer claims-made-policies to exposure-policies aka occurrence policies.  Some years ago the industry tried to switch everything over to the system it preferred, the claim-made system.  There was a public outcry, coming mostly through insurance regulators.  Now, all the cyber policies of which I am aware are claims-made-policies. All of them also have variations virtually all of which can be added by endorsement, e.g., damaging event might happen a bit before the policy period and/or claim might be made slightly after the policy period.  Determining how to handle these options and what to charge for them is a real underwriting headache in the world of cyber underwriting.  
Now we come to what might be a nightmare when it comes.  Sooner or later customers for cyber liability insurance will be asking for or demanding what I have been calling “exposure-policies.”  There will be some real pressure on lots of insurers to begin using that form. The industry will resist.  Some insurers might capitulate for the sake of premium dollars.  Now. . ., that is an underwriting nightmare.
Not much has been said about Managerial Underwriting. Obviously, it will have to do with reinsurance at its various levels, ratemaking, Again see Mangan & Connor, ADVANCED UNDERWRITING TECHNIQUES, Chapter 2 and will overlap Creative Underwriting at various levels, most significantly designing underwriting policies, meaning not just this the policies themselves but policies of the insurance company as to property underwriting procedures. Id. at Chapter 4.  At Managerial Underwriting goes higher in the “chain of command” the more it will become a kind of financial underwriting, and by this I do not mean insuring financial entities–that is done below–I mean the use of financial techniques and idea in designing underwriting function/department policies. Id. at Chapter 3. 
Financial underwriting has at least two levels.  The lower one is the organization and use of data–a cyber activity these days–thinking about different types of data, grasping how statistic and probability work, and so forth.  A yet more advance level is understanding and/or working with the connection between contemporary insurance thinking and recent innovations in financial theory.  
The financial dimension of underwriting if a changing field. Traditionally, it has been viewed as a determinate of actuarial success, experience, professional intuition,  and good luck. Currently there are those who argue that insurance underwriting should be received as a financial activity. Eric Briys and Francois de Varenne, argued in their book INSURANCE FROM UNDERWRITING TO DERIVATIVES (Wiley 2001) that “[t]he contribution of financial economics to property-casualty insurance pricing is highly valuable. Indeed, it helps to push the traditional   actuarial  approach toward a more focused market orientation, and this is especially timely given the current emphasis on the convergence of of capital markets and insurance markets.” (p. 27). 
For example, Briys and Varenne  claim that  “the insurance policy is the functional equivalent of a put option.” (p. 25). And they further claim that their new work of what I have called “managerial underwriting” natural event are being secularized and then being placed with investors in the form of derivative securities or structured notes.”  (p. 31). Indeed, they say, “[t]he Chicago Board of Trade has launched several derivative contracts in which insurance risks are the underlying assets.” (Id., et passim.)* 
In theory, at least, cyber insurance is an ideal place to develop this transformation.  For one thing, there is no serious basis, much less, experience or tradition, of sound actuarial reasoning. For another, we have whole nearly new fields of insurance and therefore insurance underwriting. What a good place to start anew with conceptualizing and applies new ideas, dispensing new knowledge and forms of reasoning. For a general and less technical of the general ideas expounded by Briys and de Varenne, see their THE FISHERMAN AND THE RINOCEROS[: How International Finance Shapes Everyday Life] (1999).
*(If course, one cannot help but wonder how thinking has developed among sophisticated and finance savvy high-level underwriters following the 2008 financial disaster and the role of the derivatives in it. 
It should be kept in mind, that some blogs are drafts of what may (or may not) become larger, different written work.  They are designed to be just that: drafts, with room for improvement. There are also cyber-typing-tech problems here and there, e.g., I can’t always get lines to indent, as is illustrated in this very blog.

Originally posted on 06/24/2014 @ 8:00 pm

Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)

One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.

Read more from the same author:

Part I. Some Cyber Policies: Structure and Organization: Comparisons

Hits: 7

Read More

Part I. Some Cyber Policies: Structure and Organization: Comparisons

Sean Quinn, Ph.D, J.D., Etc.

1300 West Lynn St. #208

Texas 78703



I.                  Claims-Made Policies In General

There is no substantial
difference between these requirements in cyber policies and real world
policies. All claims-made liability policies—including excess policies—begin
with similar concepts. Some liability claims-made policies as originally
written require that (i) the alleged injury asserted by the alleged victim
against the insured and (ii) the claim for compensation against the insured
must all occur during the policy period. In addition, the insured’s claim
notification to the insurer must also occur during the policy period.  The requirement that the insured’s claim or
notification to the insurer be in writing is often waived.

Most claims-made policies have a policy
period lasting a year.  Some of the
policies require that the injury causing event occurred during the policy period,
along with the alleged injury, the claims against the insured, and notification
to the insurer. This is a very difficult set of criteria to meet.  Seldom do that many things occur during a
short period of time.

A second way a system specified in the
contract might work is that the claim is something made by the person or entity
asserting injury against the insured and the insured’s making that assertion
known to the insurer within the policy period. 
In this system, there is no requirement that the injury occur during
the policy period. The injury would be required to occur during a specified
retroactive period.  In other ways the
date of the beginning of the policy period would remain the same. Retroactive
periods are an add-on to a given policy that would be sold to the insurer to
modify the base policy by lengthening it.

A third way for a policy to work is that
the injury and the notice must both occur during the  policy period.  If this were the way the system worked, no
claim would have to be filed during the policy period. The insured would simply
be notifying the insurer of claims, which it believes may arise.

A fourth way for the contract-created
system to work is that there is an extension period during which the claim
and/or the reporting can happen after the policy period ends. This extension
comes after the termination date of the basic policy.

A fifth way it might work is that there
is an extension period “backward in time” so that at least one of the three
events required—the injury, the claim, and the notice–can occur during that
extension period.  Usually that is the
alleged injury. 

A sixth way that the system might work
is that there are extensions moving in both directions on the same policy. 

These time limits and specifications are
common in both real-world policies and in the cyber-world. The expense is,
obviously, to some extent at least, determined by the length of times specified
in the extensions. Different extensions can involve different costs, and that
can happen on the same policy.

Often in real-world policies the
temporal size of the extensions is prima facie fixed by standard, antecedently
existing forms. These do not exist in the cyber world, but each insurer will
have its own forms. Of course, the extensions in real world appear in
endorsements, and they can be further extended. 
 Extensions deviating from the
generally received extension temporal specs found in the standard forms is on
the rare side.

Something similar is true in cyber
policies even without any industry-wide standardized forms. You would expect
there to be more deviation here regarding extensions in policies, but that is
not happening. The most reasonable guess is that there are not actuarial
statistics to make assorted extensions more reasonably acceptable. The same
standardized arrangements regarding extensions will, in the future, will likely
evolve in the context of cyber-insurance as it already appears in the real
world.  For one thing, most of the
insurers producing cyber insurance policies also already produce real world
policies, e.g., Chubb, St. Paul, some AIG companies, Travelers, Liberty Mutual,
and others.

A carrier can refuse to extend any
claims-made policy, just like any other policy. They can also renew the policy
and refuse to renew either or both of the extension periods.  Sometimes contracts of insurance, whether
real or cyber world, can impose contractual obligations on the insurer to renew
coverage.  Obviously, all sorts of
insurance policies, including cyber policies, have monetary policy limits; some
reduce policy limits by defense costs; some have deductions; others have self-insured
retentions, and there are yet other commonalities. (I have never seen an
insurance policy of any kind without either deductions or self insured
retentions.  I cannot recall running
across a policy with both, but in theory that is possible.)

Structures: Cyber and Otherwise

hundreds of years, contracts of insurance have had the same structures. They
have not always been divided up in the same way, but they have been for maybe
100-150 years or more. Most of what is written here is as applicable to excess
policies, of whatever level, as it is to primary policies. The structure of
policies is quite simple:

One or more sections explicitly stating what coverages are included in the
policy, e.g., what perils are insured, who is insured, the upper limits on the
policy, as already said, the deductible, i.e., how much will be taken off what
the insurer will pay) or the self-insured retention (i.e., how much the insured
must pay before the insurer has any obligations),[i]
the price of the policy, the size of the policy, sometimes the name of the intermediary,
and various miscellaneous information, e.g., email addresses, normal usable
phone numbers, emergency numbers, and so forth, for the insured providing
notice to the insurer.  In English
language lingo, they are called “dec sheets” or “dec pages.”  

There is one substantively important
point mentioned here; it concerns what professionals are insured under a
policy.  Sometimes on dec sheets there
are lists of what or who is insured. In cyber world policies, various kinds of
classes of professionals insured are set forth. This can be very important for

Insuring Agreements.
There are one or more specifications as to what is insured, e.g., an insuring
agreement, with a fully complete panoply of coverages, or a number of
different insuring agreements, each with one or very few insured perils
listed. The purpose of some of these insuring agreements is, as it were, to
provide the insurance customer with a shopping basket. These divisions make no
difference to the substance of the policy.

 Sometimes, real world policies, usually first
party policies, are “all risk” policies, and others name the perils insured
under the policy; sometimes there is one such peril, sometimes more.  In the universally established lingo of
insurance, the latter type is called a “named peril policy.” This
linguistic fact comes as a surprise to no one, nor does it matter. All
cyber-policies are named peril policies; none of them purport to be an all
risk policy, whether first-party or third party.

Package Policies,
Another way in which cyber-policies are like real-world policies is that they
can be “package” policies. In other words, they can list several insured
perils, and the insured may be purchasing all of them, some of them, or some
combination of them.  There might be some
for liability coverage, and some for first-party coverage, or they might divide
between first and third party in given policies but then have different first
party perils in one of them and different third-party perils in the other. Cyber
policies are now, at least quite often, package policies to some degree.

One bit of information found in the
insuring agreements of cyber policies concerns how the insurer will compensate
the insured. (i) Some parts of some cyber policies are “pay on behalf of”
policies, e.g., when it comes to the costs of defense, but not other parts of
the policy. This obligation can stretch out over a whole policy and sometimes
it is restricted. (ii) Some sections of the same policy are reimbursement
sections and some may be reimbursement policies all the way through.  There is no reason to doubt that some
cyber-liability-policies are and will be formulated in terms of reimbursement
even as to the duty to defend. Sometimes this is a good thing. If the insured
has plenty of money, can afford paying for a defense, and wants to keep all of
the policy limits for damages if they have to be paid at some time in the
unpredictable future, then a reimbursement arrangement for the duty to defend
may be rational. One can easily imagine such things applying to cyber-world
liability policies. (iii) “We-will-pay” terms for setting forth the
insurer’s duties are different yet; they may simply say the insurer “will pay”
for XYZ, but it is not said when.

All insuring agreements in cyber insurance policies use definitions. The amount
and complexity of policy definitions is a distinguishable feature of cyber
policies. Partly this is true because they are named policies, but there are
other reasons, as well. As we shall see in the next bullet point all
definitions used in insuring agreements are stacked.  To expand the point, in the last 100-150
years, all the policies I can remember, have used definitions.  As the decades have gone by, more and more
definitions get used. Thus, as of now, absolutely all insurance policies are
filled with and heavily depend upon definitions. Different signals in the
insuring agreement call attention to them: bold letters, underlining, quote
marks, italic, and perhaps others.  Cyber
policies work the same way without exception.

In cyber contracts of insurance, there are many more definitions than
are usually found in real world policies—sometimes there are as many as 50 or
more. These definitions are often quite complex, difficult to understand, and structured
as stacks. Stacking means that one starts with the signaled definition; it is
connected to one or more other definitions which define that definition; and
those definitions are linked to even more definitions. This stacking can be
very extensive.  Of course, there can be
(and are) stacks in real-world policies, but there are not so many definitions
in given stacks.  Fortunately, not all
definitions are stacked or stacked to serious depths, but the definitions are
always complex.

 Exclusions. All insurance
policies contain exclusions. In many 19th century policies, they were there but
not named such.  Sometimes they were
built into the description of the peril and that is still done; sometimes they
were built into the definitions and that is still done. Like definitions, the
use of exclusions is more lengthy and more numerous in cyber-policies than in
real-world policies. By my observation, there may be as many as 50±, and the
definitions used in them are often stacked. 
As one might expect, some of the definitions found in cyber-policies are
also found in real-world policies; this is true of both claims-made policies
and others.  Here are several examples:

Deliberate conduct where the injury is
itself intended

Serious criminal conduct

Pollution causation

Wartime injuries, and more.

There is always a section for conditions. 
Significantly, in the long existing common law of contract conditions
are distinct from other provisions in insurance policies. They are not really
statements of promised rights and duties. 
They are simply descriptions of acts the insured must perform in order
to qualify for coverage. It is not a breach of contract for an insured not to
perform one of the requirements; the insurer has no right to performance; and the
insured has no duty to perform. 
Nevertheless, setting aside subtleties, conditions are often treated as
covenants.  This is not necessarily a bad
thing, since breaches of immaterial covenants by the insured do not end the
insurer’s duty to perform.  This change
has proved especially helpful in dealing with the most notable policy
condition, the as-soon-as-practicable notice-to-the-insurer requirement.

any case, here are some conditions to be found in cyber policies. They may
differ a bit from policy to policy, but not much, and many of them resemble the
conditions to be found in real-world policies:

ü  Notice
requirements explanations as to how to provide notice,

ü  information
as to how losses of business income/profits (business interruption) are to be

ü  the
conduct of legal actions against the insured,

ü  bankruptcy

ü  subrogation

ü  dispute
resolutions clause (usually arbitration),

ü  requirement
of mediation,

ü  mandatory
appraisal (triggered more often by insureds that insurers),

ü  facts
to be disclosed to the insurer by the insured during policy period,

ü  assignment
matters, permissible waivers (usually none),

ü  cancellation
(how-to + consequences),

ü  renewal

ü  other
insurance matters,

ü  that
the application is to be included in the policy and

ü  is
warranted to be truthful and so forth.

It is important to see that none of
these conditions in a cyber policy is significantly different from that found
in a conditions section in real-world policies. None is conceptually different.
 Instructions on how to give notice in a
complex high-tech case may be different from a simple requirement to give
simple notice, but the basic ideas are the same. Though conceptually similar,
specifications regarding the measurement of business interruption are different.
That is quite often left unstated in detail; the foundation of that type of
claim is different from most first-party contracts of insurance in the real
world, where the foundation for all such claims is physical injury to tangible
property, unlike what is required in the cyber world. 

Conditions are usually regulations of
behavior. They do not usually say anything about the substance of the policy.
They are probably not intended to do that. 
Sometimes substantive matters can be “hidden” there, and often
procedural matters have implications for substantive matters.

Extra Section(s).
Sometimes there are extra sections. In one cyber-liability-policy I studied
recently, there was an extra section devoted to the insurer’s duty to defend,
emphasizing limits and exclusions, or what were in effect exclusions. These
sections are nearly always found in liability policies, although they are
sometimes formulated in terms of reimbursement rather than the insurer paying
for the defense “on behalf of” the insured. That section of the policy was not
to be found in the insuring agreement where it usually is, nor was there
anything about that duty in the section containing definitions. I was and am
puzzled by this organization.

Another matter which often occurs in a
separate section is how loss adjustment is to be conducted.  These sections identify what insureds are to
do about cooperating with adjusters and those on whom they depend, e.g.,
forensic types, accountants. 

Sometimes, instead of finding the duty
to remediate, as much as reasonably possible, mentioned in the conditions
section, it is to be found here. These clauses are usually quite brief, even in
cyber policies.  This is true even though
remediation may well be much more esoteric in dealing with cyber losses than with
most real-world cases, even those involving complex physical destruction. 

Historically, there have been a
considerable number of disputes about remediation matters; insureds are well
advised to provide remediation plans to their insurers and try to get approval.  Often they will be neither approved nor
rejected, and it will be said that it is for the insurer to determine what to
do and how to do it.  The insured’s,
having submitted a remediation plan to the insurer, can have later significant

Yet another important matter that is
often to be found in a separate section, if not the conditions section, is how
to count the number of causes of loss, and how to think about situations
when there are groups of different causes. 
The reason this is important is that most cyber policies require that
the relationship between cause and effect be “direct.”  Some try to count this as the cause being the
sole cause of the effect.  This is
nonsense, of course; the word “direct” has no such meaning.  Significantly, the word “direct” and
“directness,” “result directly from,” and so forth are often not defined in
cyber policies.

[If  enough is enough, perhaps there has already been a bit too much.  Still the reader should please keep in mind that Quinn Blogs are intended to be thought-stimulating [or, thought-provoking] tools only.  The are not intended to be perfected essays.  They are in-progress disquisitions only.  They are not essays polished to completion. Maybe another time.]

Robin Pearson, INSURING THE
in wrong place.)0

Originally posted on 06/24/2014 @ 5:29 pm

Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)

One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.

Read more from the same author:


Hits: 7

Read More




Sean Quinn, Ph.D, J.D., Etc.

Exposition Blvd  #115

Texas 78703



The Internet is full of reports about itself, as it were, and plenty of
similar sources to be found in the real world. 
Treating them together, there are  ads, mags (like Wired), books with new titles (some of which now have several
additions), textbooks, novels, articles, spiritual exhortations embracing
and/or condemning the new cyber technology, book reviews, blogs, and places to
chat. Many of them are about the so-called “real world” and its
components.  Many are about the
Internet—and more expansively understood, the cyber world itself and its

There are many abbreviated and
superficial phony disquisitions on what little there is of  cyber insurance law cases about which public
knowledge is available. One suspects that there are more, but settled subject
to confidentiality.  Later in another Blog
you doubt you will be  reading, some of them will be discussed. 

There is WestLawNext and Nexus, where
the reported cases also are to be found and where unreported but published
opinions can be found.   There is a sparse set of articles that say
almost nothing interesting about the reported cases, and say nothing at all
regarding cases conducted quietly, e,g., by arbitration, and/or about which
resolutions are not known, either because there are confidentiality agreements
or because there are agreements amongst the parties to avoid publicity.

Some law schools now have courses on
cyber law, using decided cases, in accordance with ancient tradition, and
statutes as well.  (This point is true
even though some leading intellectuals sneer at the idea.  See Frank A. Easterbrook, Cyberspace and the Law of the Horse, 1996
U. CHI. LEGAL FORUM. 207, the author now having sat as a Judge on the Seventh
Circuit for many years.  The Judge’s
article caused substantial controversy being that of Professor Lawrence Lessig
[Harvard Law School], The Law of the
Horse: What Cyberlaw Might Teach, Research Publication No. 1999-05,
& SOCIETY (downloadable from
However, the traditional law school courses about which Judge Easterbrook is
writing, so far,  says nothing, or next
to it, about cyber insurance law. In some sense, some cyber insurance
principles and the law of the so-called real world are like that  already taught in law schools, but not all of
it, and that is likely to diverge outward a bit, away from each other a little
here and there, over time.  Some of these
divergences may well be significant.

There are also a few law review articles
and a few short commentaries by professional lawyers on the reported cases, but
there are no how-to manuals for lawyers, theoretical treatises.

are there any satires or parodies, yet.  
Nor are there even any, so far as I can remember, BUSINESS INSURANCE-type
newspaper editorial page cartoons.  (If
there are any, they are very, very rare. I have searched and searched, an
effort  aided by the Internet.)

There is not much to be found on the
Net  that is anything more than superficial
when it comes to the “dawn”—and it still is exactly that–of cyber insurance,
whether it is about creating the contents of such insurance policies, the law
of  cyber-world insurance and its
applications as opposed to and/or distinct from the insurance law of the real-world
(assuming there is or will be one).  As
already said, these observations derive from the fact that the cyber-insurance-industry
is  new, and, so far, a quite, quite
small fraction of the existing and established gargantuan world-wide industry,

 The difficulties insurers have in creating
this new industry in what some call a “New World,” derives from a world (largely) without
tangible property, not to mention human bodies to injure, neither health no
life insurance. (Of course, it is easy to imagine life insurance as part of a
video game; it could be named “Murder and Adjusting.” It is less clear how a
video game focusing on health insurance might work.)  These difference, and others, make
systematic, reliable thinking difficult.  
To be sure, there are pleadings, motions, and briefs—both at the trial
levels and at the appellate levels—to be found on cyber controversies, quite a
lot of them obtainable off Pacer and/or the Internet, on WestLawNext as well as
on LexisNexis. However, there are very few controversies that have made it to

Some of the “literature” about insurance
and the cyber-world is informative, but most of it is shallow. They are really
ads set forth by businesses hawking services and other wares.  Most of these come from insurance
intermediaries, but some come from other vendors, including law firms, as well
as risk management firms.  The law firms
“newsletters” are much better for coverage aficionados than those of others

The federal government is becoming
involved in this a little.  There are two
published “discussion group” booklets. 
One is called Cybersecurity Insurance
Workshop Readout Report.  That
conference was held in November 2012. 
And there was a second conference, a little less devoted to insurance,
held in May 2013, entitled Cyber Risk
Culture Roundtable Readout Report.

There are huge numbers of firms and different
sorts of businesses that  present
themselves as knowledgeable, helpful, and wise about cyber-world insurance—able
to interpret policies accurately and with authority, able to recommend needed
coverages, and able to do (or help monitor) all sorts of forensic activities.
Some intermediaries are like this, some security consultants claim to be this,
and most contemporary risk managers say they do this, as well. 

Significantly, more than a few insurers
are forming risk management subsidiaries and advisory groups on needed and
desirable security devices, some of which are preconditions for purchasing a
policy.  Of course, it’s hard to do this
sort of thing without financial analysis, so some insurer subs are doing this
to, though usually for the stated purpose only. 
So far, there is not a chorus of insureds complaining that much of  this particular type of work—remember” risk
management services–is keyed to inducing customers to buying the sort of
insurance the principal part of the company sells.

the more objective literature pretty much repeats what is already known or
which is intuitively obvious. There are exceptions, of course, such as the
proposition that 90%±(?) of data breaches and other problems are inflicted upon
smaller businesses—less than 100 employees and that a substantial percentage of
the causes of all such breaches whether of large companies, or small, involve
negligent acts or omissions by employees. Moreover, some publications state
that a similar percentage of costly intrusions into one’s network can be
avoided, if property security protections have been installed and managed

significant source on these topics and some like them is the annual Verizon report
for 2013 (its “2013 DATA BREACH INVESTIGATIONS REPORT) that, while most
breaches of security are outsider driven, there is often internal,
unintentional, merely negligent acts or omissions by company employees.  (See id. p. 3) If one takes seriously the idea
of insurance for the conduct of employees we have a type of insurance that is
frequently not covered in “real-world” policies.

In any case, there are a goodly number
of  available publications on the cyber
world general, conflict within it, conflicts about it, the nature of  damages being caused, privacy being invaded, damages
from theft of personal information having swiped, and-on-and-on, there is
little about insurance.  Thus, the
public   is bombarded daily with brands
of new news about the sociological and economic revolutions, that components of
the so-called cyber-world are somehow us creating, that the tremendous profits
now generated on and by the Net that (and which will be “forever”) earned in
that world and that cyber catastrophes happen there on a weekly basis.  The attack on Target near Christmas in 2013,
and the ostensibly separate one against Neiman-Marcus—are there class
difference in the “hackactivist” community–leave the public and commercial
entities that interact the public 100s to 1000s times as day, in a state of
bewilderment and fear. One of the messages being sent is: “You need to
buy cyber insurance.”  Another one is:
“You must buy cyber insurance,” or else you will go into miserables
bankruptcy and getting sued by everyone in sight—shareholders, employees,
vendors, millions consumers, and governments, as well.” The more recent P.F.Chang invasion is more of the same. (By the say, for those of your more than mildly interested in these topics, I recommend you read “KREBSonSECURITY” frequently. It’s subtitle is “in-depth security news and investigation.”)

At the same time the interested public
is almost as often told that the principal causes of “data breaches” are
various human errors or system glitches, including: lost laptops, component
stolen from employees, such as flash drives, back-up tapes, CD-ROMs carrying unencrypted
information, emails with sensitive client and/or customer error sent
erroneously, data bases not effectively protected, unencrypted data in
transit from one organization to another. 
Of course, out and out theft is different.  Almost all of it comes from the outside, not
from employees or business partners, yet employee negligence often plays some
role, and sometimes employee competition, politics, or simply revenge plays some
role.  Out and out theft also plays a
role, perhaps more than “hackery,”

Here is an important group of
questions:  If  commercial entities of all or most sources
could cut cyber losses by 90%  how should
the need for cyber insurance be thought of? 
On a scale of 1 to 10, where 1 is “not need at all” and 10 is “really
need very badly,” where would cyber insurance fall?  How large should the self-retention be?  Given that small business have losses much
more frequently  than big business, or,
at least that is what is said, how should the need for cyber insurance be
thought of? 
(Mindy Pollack, 2013: THE YEAR
OF DATA BREACH INSURANCE, Topics No. 21, p.10 (2013). Nothing further will be said about
these questions, and it will be assumed that everyone needs at least some
insurance now including some types of cyber insurance.

Perhaps the following can be used as a
starting point to reflect on these questions. Six years, or so, ago, a group of
the various PlayStation divisions and/or
interconnected companies had at least 77 million victimized customers by having
had significant pieces of their personal information stolen. (This is a
well-known story.)  As one might expect,
these are the kinds of events class actions are made for, and–in this case–an
enormous insurance dispute. The PlayStation companies are found in the SONY
realm, so it sought coverage from Zurich Insurance, among others.  One of this cases will be discussed
later.  Did SONY’S having cyber insurance
help it, and if so, how much.  (Oh yes!)  How did the settlements with the other
insurer work? They didn’t, and thereon hangs a tale.  I will discuss it in some other blog.

Perhaps the economic semi- or
pseudo-panic that surrounds commercial endeavors to sell various cyber
insurances is unnecessary. However, apparently strong punditry is seldom right,
as we all know from politics. 
Probabilistic predictions about BIG events are never certain, if, for no
other reason, pundits and many others do not appreciate Quinn’s Self Explanatory
Refined Version of the nearly profound Rule, to wit:

are such  “things” as unknown
unknowns,  and sometimes some people
think they  know that there is quiet
likely important events or trends which border on being known, not even close
to unknown.  (Already applied once

Of course, even if the way needs are
formulated or made overly colorful, probably too dramatic as a matter of
probability, and made on the basis of “facts” which are falsely alleged, mostly
innocently, it seldom a bad idea for large companies to buy insurances of
various sorts.  

Quinn’s Second Law should be kept in

is no such thing as a single cause for a complex event.

world of insurance understands this very well. 
It has been applied very little to analyzing the cyber-world.  Perhaps this is a place where applicable
insurance ideas might lead a way.

Originally posted on 06/22/2014 @ 10:52 pm

Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)

One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.

Read more from the same author:

Part I. Some Cyber Policies: Structure and Organization: Comparisons

Hits: 7

Read More



Sean Quinn, Ph.D, J.D., Etc.

1300 West Lynn #208

Texas 78703



          Insurance, like many industries, has
struggled to keep pace with the complex super-rapid developments  in the intangible cyber-world, some of the
dimensions of which are remarkable development of or from tangible computers,
the development of multiple X-pads, Y-tabs, and Z-“whatevers,”  the race to new technologies in the provinces
of the Internet, and the “super-sonic, near-speed-of-light,” development of
uses of technologies in the cyber-world so advanced that “Pads” and “Tabs” seem
and may already be are obsolete as of June 30, 2014. (Consider what has been
going on in the collective search for the missing Malaysian airliner. Or,
consider the fact that we all can closely watch the van Eyk Project as it moves

Computerized information systems and
electronic commerce have out-stripped the capacity of the legal system and
government to keep up—to regulate not only “the web,” but intranets, social
media, and e-commerce in general.  Think
of Amazon; think of Stables; think of Target; think of  X them Y then Z, and then on and on. The Internet now even has its own
highly sophisticated currencies, “tech-cur,” of which Bitcoin is now the best known

This statement is not intended to
suggest that the insurance industry has failed recognized that insurance is desirable
and even necessary under many circumstances. 
It is necessary for many customers, who become insureds, and it is
desirable for many commercial insurers, since e-will have an enormous role in
at least the century come. Indeed, all industries already use the various
“nets” conducting their businesses. 
Again, think about the 2013“Target Incident” in 2013,  or ponder the alleged hackery-caused ruination
of the Potash merger deal  in Canada
several years ago, with alleged and unconfirmed  hackings of seven, or so, law firms in Toronto
that were professionally involved in the deal.  According to a sophisticated article in the Sunday Review section of the June 22, 2014 NYT, hacking and resistance to it is getting more sophisticated very quickly.  The levels, the twists, the turns, the internationalism, the international politics, and on and one, are getting ungraspable, at least for many of us.   (I don’t know lawyers who actually do, although many in large national law firms say that they do just that all the time.

The fact that the insurance industry is
not keeping up does not mean that insurers are unaware of many of the
possibilities for revenue and profits. It only means that the stages of
development are yet early, and it implies that there are many more “places” to
go.  The decision making players are
conscious of the history of the industry. 
Not charging a premium in the neighborhood of the  “right premium,” not having enough carriers
involved in taking on the risk of loss, not having personnel or enough
personnel with the right sets of 
knowledge,  whether in
underwriting departments, adjustment department, or yet others, has
historically lead to numerous bankruptcies, and similar states.  (And I haven’t even started to get to the
asbestos insurance catastrophe.)

know that prudence in creating entirely new types of insurance—types that may
become a front running component of the industry– is required.  There is no such thing as the instantaneous
development of prudence.  All prudence is
developed relatively slowing.  Anyone who
claims to have acquired prudence with respect to anything

Here is a concrete so-called cyber-world
example. So far as I can tell, there has been no such thing as (or only very rarely
such a thing as) “network-napping” to be thought of as an analogy to kidnapping.
There is such a thing as cyber extortion, but that is about what one might do
in the future. Not about what has already happened.  There is such a thing as data (or
information) trolling, but it does not appear that there is much in the way of
“data-napping, at least, not yet. (Also,
I haven’t found much about instances of large scale invasive “data destruction,”
i.e., the destruction of the of the data of others.)  If the NYT article just cited is correct, all of that has recently changed.  

Of course, assuming that “data-napping,”
“network-napping,” “cyber napping [in general],” “data-destruction,” are all
perils, there will be, or already secretly is, insurance protecting insureds
from them.  There is a cyber tort that is
the opposite of both “-napping” and “destruction”; that is the cyber
lockout.  As the reader will know
instantly, that is real peril, and there will be insurance against it, as well.  All “perils” are, virtually by definition in
the insurance industry, fortuities,
to some extent and in some significant ways. 
Insurance is for the fortuitous. Indeed, a fundamental axiom of
insurance as a concept, if the Principle
of Fortuity, a phrase in the industry everyone knows embraces and respects.

is often said that cyber technologies and their uses are changing and growing
at breakneck speed—rather like a super engine racing boat with its remarkable
steering capacities. Consider this minor fact, reported in the Wall Street Journal on November 13,
2013: “In 1993. . ., there were only 34 million cellphone subscribers
world-wide, compared with more than 6.8 billion today.” (Lockton, Cyber Studies Decoded: A Report on Data
Risks, the Law, Risk Mitigation and Insurance p. 3 (February 2012). (This is a
many paged commercial pseudo-treatise, financed by a large source, containing
data often cited by others, with many citations to respectable sources, or so
it would appear. It is easily found on the internet.)  

course, it also must be kept in mind that the advances in cellphone technology
are also extraordinary. So far as the spread is concerned, I cannot walk down a
busy side walk without seeing more than ½ of my fellow walkers doing something
with their cellphone. I doubt that many of them are listening to Shostakovitch, discussing
him with their colleagues; many of them, for sure are observing and conversing
with their friends, or others. Consider how fast all this has happened and is
happening. (Is it relevant here to mention that the purchase and use of devices to lock cell phones shut if they appear to have been stolen?)

insurance industry is not like that. Its ontological constitution is not built for blindingly rapid change! By its very nature, it can’t keep up with the innovative speed found in (or, stimulating) the so-called “cyber world.”  In the insurance industry, historically speaking, changes have been more like an aircraft carrier turning and not to speed ahead or turn like a huge engine speed
boat.  Even the banking industry moves
more quickly.  The role of insurance as
“risk guardians” requires this.  The
nature of prudence in the area of protection—and that is what insurance is all
about, protecting insureds from determinate fractions of worrisome losses—does
not leap into consciousness and decision-making straight from a cloud.

continue this metaphor, insurers carry, as it were, in their heads, all sorts
of powerful and useful ideas with semi-details of them, and they will all be
considered in a variety of ways. This risk-shifting and “how-to-shift-risks”
thinking  is  necessary for the carriers, their balance
sheets, and their stockholders, for the stability of the industry, for the
policyholders, for others that may need the benefit of coverage (those if any
whom the policyholder has injured in a covered way), and for the purpose of
being relatively in line with public policy. Of course, as with any innovation,
there must be hypotheses about how to go, how to think, how to reserve, what to
do next, experiments, and how to deal with the inevitable and instructive

example of the slowness of insurers and catching up to the time is the problem
of gambling. Part of the analogy is financial-economic, and another part is
political. From the financial side, underwriting parts of the gambling business
is nerve racking. Even where gambling is legal and certainly as to online
gambling carriers have been slow to get involved in anything but routine
coverage, such as property insurance. 

easy to see why. Even in insuring casino buildings, there are very special
risks and liability insurance is much more problematic.  Setting premium prices, making sure that
application forms are sufficient, making sure that applications are filled out more-or-less
correctly, and trying to price premiums in a reasonable way, are all extra problems.

 In the world of cyber insurance, both of these
types of insurance—first party and liability insurances–will have substantial
preconditions upon the issuance of policies, e.g., insurers are now and will
forever impose requirements on the character and extent of a customer’s
security system, whether physical or behavioral.  Determining what these should be is a major
project” filled with ideas, debates, advice, more ideas, more debates, more
consultation, and intro-company politics.

addition, there is a historical-political set of problems. For centuries,
governments and churches regarded insurance as nothing but gambling, which I
think it actually is.  It took a long
time for potential insurers to convince their governments, and hence regulators,
to either change their minds or look the other way and thereby soon to see the
social and economic benefits of having a heavily regulated insurance industry
and “un-see” the idea that all sorts of gambling ruins cultures and countries.  
This unconscious collective concern in the
industry may be part of the reason that insurer’s are perhaps skittish about
moving forward in some areas of the cyber world.  After all, everyone who studies insurance
learns a little bit about its history, and that little bit will likely include
the “gambling problem” in the business of insurance. Business “memories”
regarding regulation can last a very long time.

  In any
case, the worries about governmental and institutional problems have made the
insurance industry at least somewhat attentive—even if this “watch” is not
visible on the surface and so is unconscious (to the extent that institutions
can be described as having something like mental states)–not only to what
insurance regulators do, but also the tendencies in and histories of
governmental actions, probabilities, tendencies, and what is these days called
“accountability,” as well as “unknown unknowns.”  In major part, insurance exists to deal with
precisely these.  They will be mentioned
again presently.

Even though insurers individually and
the industry as a whole have moved slowly “forever,” amazingly, in the last three or so
decades, the industry has thought hard and moved forward in what must be
regarded as a fair distance, especially when it is likened to an enormous
aircraft carrier.  The enormous need for the
shifting of risks—usually in part–has grown immensely in e-commerce, where
that term includes all dimensions of businesses involved and the industry has
struggled to keep up with this need. That fact is reflected in the diversity of
modifiable coverages, large variation in cost, a substantial (though not
universal) lack of uniformity and standardization in formulating coverages, even
though there is close to uniformity in the topical areas for which there will
be coverage. 
The insurance industry realizes where one of the next great sources of profit is to be found, and it now taking chances to get into and stay in the game.  The mail problem, as indicated herein, is inattentiveness in pricing, not to mention new coverages and new languages. This having been said, it is worth noting, in passing, that
what coverages there are in a given policy is principally determined by the
insuring agreements, the definitions, and the exclusions, though not usually
the conditions. In cyber policies, at this point in history, though definitions
in all insurance policies are of cardinal importance, the definitions in cyber
policies are of even more significance than those found in so-called real world
policies. This is especially true for the definitions which are not identical to
or pretty much the same as a definition in a real world policy. After all,
experienced members of the insurance “community” are already familiar with
those definitions policies.

At the same time, a way to slow down the radical innovative process,  it must be conceded
that the rapidity of the industries “infant”-to-“early adolescence” changes
have depended heavily on existing, reliable, and stable real world
policies.  After all, first party
coverage in the cyber world resembles that found in the material world;
liability insurance is the same way; and so are conditions.  One of the main differences is what is being
insured; and what is the nature of the injuries for which there may be coverage. 
So, we have a chaotic business world, ambiguous yet as to what kind of insurance it needs, how much insurance it should have, what it should pay for it.  Uncertainty as to pricing is acute. In addition to this apparently free market, there are conflicting economic currents, and at least as significant, there is hacking, little real evidence of how many will get hurt and for how much, and almost no established law about how to handle it where there are damages and liability.  Of course, this portal is where insurance comes into the fog, and it is in a fog itself.

Originally posted on 06/22/2014 @ 10:35 pm

Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)

One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.

Read more from the same author:

Part I. Some Cyber Policies: Structure and Organization: Comparisons

Hits: 7

Read More



Sean Quinn, Ph.D, J.D., Etc.

1300 West Lynn Street  #208

Texas 78703



Current discourse on cyber
matters generally uses such phrases as “cyber world,” “virtual world,” “cyberspace,” “cyber tourist,” digital universe,” “virtual” this or that, e.g.,
“virtual currency,” such as bitcoins, and other locations like those. I begin
with an important false distinction in the semantics and ideas used in cyber
discourse.  The high speed of the large
set of powerful, rhythmic, and otherwise attractive metaphors, like those, moving
into parts of languages that are taken to be literal and descriptive, is a dangerous
social phenomenon.  It is to be called “social” because, we are talking about the spread of an important but false and profoundly
misleading conceptual scheme, i.e., systems of ideas.
Such metaphors may play a part in creating a
false conceptual system—one which may substantially mislead at least important
fractions of the population   All of
the metaphors get frequently used and sometimes in opposition to, or in
contradiction of, the so called “real world.” 
Pieces of the discourse denounced here began well over a half century ago
when John von Neumann
and his band were conceiving, designing and building the original computer—the
“hardware” they called its contents “the digital universe.” See George Dyson, TURING’S CATHEDRAL: THE ORIGINS OF THE DIGITAL UNIVERSE 2012)

Speaking of a “cyber world”
makes it sound like there are two actual, independent, and irrevocably
distinct—quite separate—worlds. The phrase “cyberspace” does the same thing.  All of the phrases like these two create the
same problem. Often when this kind of thinking takes over, some users are
inclined to see one as somehow inferior to or weaker than the other, or the
thought pattern makes it seem to some thinkers, that there is another, separate
world that exists–an immaterial world but one without angels, ghosts, Plato’s
forms, plus numbers and the rest of pure mathematics. In fairness, I suppose I should concede that some philosophers use “space”-metaphors for relatively similar purposes.  Charles Taylor in his landmark book SOURCES OF THE SELF (1989) uses the phrase “moral space” to talk about it being possible to reason, conceive, formulate different theses, positions, ideas, and so on. In is view, a philosophical system regarding ethics and morals that does not have a “moral space” is pinched, idea-less, dogmatic, incapable of philosophical imagination, and so forth.  In this context, Taylor also uses the idea of a “moral horizon, and idea that is obviously connected to the idea of moral space.” 

(Wait a second.  If this idea is conceptually similar to
Dante’s poetry, someone might be prone to jump the other way. They might say
things like, “No wonder we don’t see much of 
witches around here.  No wonder
science has falsely declared that there are no witches.  They didn’t know where to look and how to
think.  Times have changed. We live in
the modern world.  Maybe the so-called
scientists have gotten it wrong because we couldn’t—and therefore
didn’t–realize that witches travel with data, not on broom
handles.”  These kinds of transformations
of superstition have happened repeatedly in human history.)

Handled in the right sort of way, perhaps my concerns are
exaggerated.  Or perhaps they are simply
academic. It might be said that it is overblown to be worried about mistakenly
transposing metaphors into literal language which is taken to be actually
descriptive and which, therefore, generates metaphysical falsehoods shaping
brains and lives.  “Apparently,” it might
be said, “that fellow Quinn doesn’t have enough to do and is not in
contact with the real world, as opposed to his fantasy world, is pacing around
on a cloud, and has no conception of the requirements of the pragmatic.

Some might find this criticism
attractive, but it has holes in it.  For
one thing, the contrast between the “real world” and a “fantasy world” is
strikingly different from the contrast between “real world” and “cyber
world.”  In the first pair, there is no
suggestion of there literally being two actual independent worlds as it
were side-by-side. The first pair turns on the idea that Quinn’s connection
with the world we all live in is faulty—or that he is disconnected from the
world even he lives in. 

Second, the use of a phrase
that was new to the language long ago, but used still today, suggests how unhinged
Quinn and his cronies are, and that phrase is “New World.”  The image is of Christopher Columbus sailing
the ocean blue and bumping into Brazil, or somewhere like it, and thereupon
calling what he found the (or a) “New World,” whereupon the phrase spread
quickly and became a catch phrase that no one thought much about. No one who
was not radically superstitious and an ounce of good sense ever thought of what
Chris found and then described as indicating the existence anything like a
cyber world, that is. The new “world” to
the west was an outlier, in some sense, but it was not a metaphysical outlier.  It was simply a big piece of land a long way
away with strange yet untasted eatables and even stranger people. Anyone who
thought about it immediately knew that it was quite literally in a “special”
space, one fixed and at a very long distance but that it was not a special,
new kind of space embodying new
kinds of spaces.

To put the same point a
little differently, it seems likely to me that it was understood immediately
that the phrase “New World” did not refer literally to a separate and
metaphysically different “place.” 
Indeed, one which generated burning excitement; many of the more elite
populace considered sending their adventuresome servants over for a “look see,”
bringing home a diary, new fruits, new vegetables, and perhaps a slave or
two.  So what am I worried about?  One minor thing is that everyone knew that
the “Americas” were solid tangible, objects and not,  new “realms,” metaphysically distinct from
what they already had, and what we now have.

Of course, it must be
admitted that there is a sense in which the Internet and the rest of the cyber
world is a “new world.”  However, this
usage is used simply to suggest that the cyber world is new to the human
consciousness because many of us have never imagined such a thing.The
coming of the telephone was like that, as were the uses of antiseptic for
infections and anesthesia for surgery.

I am not the only source of doubt.   Interestingly, some courts have, at least intuitively, recognized to be shy of using this language.  On June 19, 2014, Justice Thomas writing for a 9-0 court (granted there were 3 concurring Justices) wrote this”The fact that a computer ‘necessarily exist[s] in the physical, rather than purely conceptual realm is beside the point.'” Alice Corporation Pty. Ltd v. CLS Bank Int’l [et al], 214 WL 2765283, ___ U.S. ___ (2014).(This is a patent case regarding the eligibility for a patent involving the use of computers in providing risk management for  reciprocal and parallel transactions at a financial clearing house.  In a way, this is a system of insurance for two parties at once where the peril is that one of them  (or a group of them) may breach a contract of engagement the other (or others).)  Notice that Justice Thomas avoids phrases like “cyber world.”   


(I wonder if some—but only
some–of today’s concern about how existing law and jurisprudence will fit the
cyber world, a completely different kind of “New World,” is not generated by
some serious concern about metaphysical divergence.  Of course, some of the concerns would exist
even if the new world of the cyber world were just like the new world of  Christopher  and many of the others in Europe who could
read, think, or do both could. What we have today is a new, “new world,” but
which has quite different characteristic.)

There were, as us well
known, superstitious people in those days—probably more than today—who saw the
idea of a “new world” in metaphysical terms. 
There was, after all, a heaven and a hell, and—of there may actually be
such “places,” but that is a wholly different. 
No one thinks that God Himself resides in the Cyber-World, or His
opponent, for that matter. Of course, none of this gibberish was in any way
connected to the language Chris generated amongst the royals, then the elite,
then the risk loving merchants, and so on “down” the line.

The idea contained in the
phrase “virtual world” has few virtues either, despite its established usage.
That phrase is too close to the phrase “virtuous world,” and so has an extra
danger in it: the dangers metaphysical and distorted free association.  It strikes me as at least as dangerous as the
other phrases.  This point is complicated, a little by the fact that the term “virtuous,” when used in the phrase “virtuous circle”  can mean something entirely different again than “virtuous world.” A virtuous circle is a phrase used in micro-economics and business to refer to the circle ones finds in textbooks showing how flows of actions or ideas can improve an operation.  Interestingly, there is such a thing as a “vicious circle,” picturing roughly the reverse activity.” See Verizon v. Federal Communications Commission, 740 F.3d 623, 628 (D.C., Cir. 2014) where there is a brief use of the phrase.
In Bragg v. Linder Research, Inc. there was a dispute over property in “virtual property. Judge Eduardo Robreno, D.J., remarked that “While the property and the world where it is found are ‘virtual,’ the dispute is real.” 487 F.Supp. 593 (E.D.Pa. 2007).  He goes on to say, “The virtual world at issue is an interactive computer simulation which lets its participants see, hear, use, and even modify the simulated objects in the computer-generated environment.” (Emphasis added.) Not bad Judge. Nota bene: no “New World.” No new space.
Update: So far as “virtuality” and “virtuesness” are concerned, see Anand Giridharadas, “Museums See Virtue in Virtual Worlds,” Weekend Arts II, NYT C17 (August 8, 2014). (Marvelous pictures included.)
Another One: There is another widely used pair of phrases that are widely used in all sorts businesses, and in other activities., e.g,, political, economic, law practice, etc. The names of this pair are “virtuous circle” and “virtuous cycle.” For each of these there is an opposite” “vicious circle” and “vicious cycle.”  One dictionary gives this as a definition of “virtuous circle”:”a beneficial cycle of event or incidents, each having a positive effect on the event.”
Yet Another:  I may have to give up on my opposition to this corruption of the language. A few days ago I went to the public library in Austin Texas, and there was a “business card” calling upon the citizens to “Visit the Virtual Library”–Download eBooks, eAudiobooks, magazines, movies and music. And the card provides an eAddress: Now I want this. I guess I have to give up and end my rant. (May 7, 2015–Is it symbolic that I am giving up on the 100th anniversary of the sinking of teh Lusitania? Probably not).
The definition is wrong.  Suppose there are 5 events, and the first 4 would contribute to a satisfactory result, but #5 has no effect. It neither improves the flow or diminishes it; it neither speeds up the process, nor slows it down.  It is completely neutral. Yet it is still part of the circle; why might be anybody’s guess. However, this fact undercuts the definition, although not the general idea. These phrases are widely and there is a weak literature on mostly intended for college biz courses or M.B.A. programs.   So the interested reader may find it helpful to start with WIKIPEDIA. It’s presentation is understandable; there are some cites; and there are lots of diagrams.
 Mostly it is though of as a presentational device for lectures and the like, and this is true.  But it is also a helpful planning and thought device. It is no doubt perfectly obvious to the reader that these–the virtuous–devices can be used in either the “virtual”–the “cyber”–“world and in the so-called “real world.”
Little has been written about the “vicious circle” or the “vicious cycle.  It seems to me false to think of any defect in a “virtuous circle” making it into a “vicious circle.” And there is no substantial literature on the concept.  It seems to me that it would be a “virtuous circle” undertaken to achieve a evil purpose (or evil end state).  It might also be though of as a cycle designed to render someone else’s goals impossible (or very unlikely) to achieve. Thus, as with lots of things, there are degrees of a circle’s being vicious.

I wonder if some—but only
some–of today’s concern about how existing law and jurisprudence will fit the
cyber world, a completely different kind of “New World,” is not generated by
some serious concern about metaphysical divergence. Can one think about cyber
copyright problems as being in the same conceptual scheme as copyright is
thought about in the real world? It looks like it to be sure, but will that
hold?  One knows now, well in advance of
the plethora, that many lawyers will be stretching out the differences between
the two worlds. Of course, some of the concerns would exist even if new world
of the cyber world were just the new world of 
“’Columbian’ Rhetoric.”

In reality, there is only
one actual world, the real world.  There
are not two worlds or two conceptual kinds of spaces.  The football field is a real world space, and it
has distance.  There is no such thing as
space without distance.  This is even
recognized in “cyber world talk.” 
Discussions of hacking are invariably about where the hack come from and
how is it got to the hacked.  Did it
begin in China, Romania, Uganda, or Cleveland? 
Did it travel through Bolivia on its way to Amarillo where the hacked
insurance company keeps its new paperless archives? (Wait! Why is there is any
place at all for these archives?   There be no place? Is it true that there are
cyber clouds and that they too in no
particular place; indeed, not in any place at all? What about the corporate
headquarters of Hyberactivities, Inc.? Need it be in a particular place? Might
not corporations find their “homes” in cyberspace? And on and on.) 

Even if this critique is
entirely true, which it is, it is also good to remember that the phrases under
discussion can be useful metaphors for dealing with so-called real world
situations.  Thus, for the purpose of
military strategy it makes sense to think of different types of battlefields,
one of which is cyber.  This type of
thinking makes it possible to “stack,” as it were, battlefields vertically—one
battlefield on top of another. But this is only for strategic thinking purposes–a
place where the imagination is necessary. 
Of course, it is also true that the idea that there are layers of
various things to be found in physical space, but they are all tangible.

 It is easy enough to guess why the phrase
“cyber world” is now so widely used. From whence did the phrase cometh? Of
course, it’s origin was a device to get people to think of the real world as
having components that the population had not heard of, “thunk” about and
certainly not grasped.  That is not what
made the dangerous phrases so widely used without thought. One can think of
video games as involving separate worlds—that of the world of the game, and
that of another world or other worlds. 
One can easily think of players thinking of themselves as directing
actions in another world–the “world” of a video game.  But this is nothing but using the

Here is an alternative
example, though twisted in the opposite direction.  In 1984, in a journal entitled NECROMANCER,
William Gibson defined “cyberspace” as “A consensual hallucination experienced
daily by billions of legitimate operators.” Obviously, this idea is “crazy”: Consensual hallucination? Deliberate state of mind(s) like
hallucinations, cyberspace as hallucination? Billions of people at once? Enormous crowds hallucinating jointly in unison? In harmony? With the same rhythm?
Responsively? Really? Further,
if the “Gibson Definition”: were not itself nuts, or hilariously false, it
would attribute seriousness craziness to all users of the Internet. Certainly,
some video game users become over excited from time to time—some more than
others–and some of the players are addicted. These states of mind are not
hallucinatory, though some of the game players may actually be quite mad.  (The reader must keep in mind that 1984 is
not so long ago, even though a favorite buzz about the Internet, etc., makes it
sound like only very young ideas, say, formulated since 2010, are anything but

This kind of philosophical
(or, at any rate, academic) objection is too purist for the practical purposes
of the Big-Blog, so I shall write here like many others do. I will use phrases like
“cyber-world,” etc.,–language I denounce as intellectually dangerous–for the
sake of simplicity and the virtues of fitting in.  After all, my criticism is not really about
the language taken just by itself.  It is
about the ideas the language presents.  I
have no problem with discussing a dangerous idea; they can be refuted. My real
problem about cyber language is that it can seduce the mind into disruptive
ideas. It is not true that only sticks and stones can cause one harm.  Thus, I will use this dangerous language for
simplicity’s sake.  At the same time, the
reader should keep in minds that all I am doing is using this dangerous
phraseology, but not embracing its metaphysical connotations.

Now what has this got to do with insurance of that which, as it were, inhabits the the “digital domain,” the hidden beings in the “cyber fog,” provides coverages for the “walls” of the “cyber chat rooms”  and so forth?
The answer is simple, insurance disputes involve dependence on facts.  Facts must be described accurately and not using misleading language; facts are never described  using misleading language.  Description requires truth, just as facts do. In turn, insurance disputes involve contract language, discussions of it, laws, and legal principles, among other things. The accurate use of all these entails correct usage or explanation of the use of  language that sounds misleading.  The phrases “cyber world,” “cyber space” and all the others fit this patterns perfectly.
 There is another twist to this story, which may weaken the linguistic divides, but its meaning and use are not the sort of a real problem. There is a different, harmless phraseology which, in an of itself, is of no consequence when on considers the distressing phrasing discussed here. It might go like this, “In our Internet world, rapidity can create all sorts of problems. This need not be semantics of any concern, so long as it understood to mean, “our world now includes [or “contains”] contains the Internet.
There is no danger of this meaning embracing the idea of there being two worlds.  There being an “Internet world” might be quite different than ordinary usage, and the idea of there being an independent “cyber world” is of necessity very, very different.  There is all the difference in the world, as it were between dependence and independence.  One must keep in mind, however, that confusions about semantics and usages are are lurking behind every long paragraph, adaptive or innovative sentence, and even imaginative verse.  Some confusions are a good thing; others are not.
It must be conceded that sometimes the “[XXX]-space” analogy or metaphor works reasonably well. In his now famous book 1989 SOURCES OF THE SELF the philosopher Charles Taylor uses the idea of “moral space(s)” as the “regions” in which human beings conduct their moral perceptions, realizations, reasoning(s), and create a sense of self. One difference, however, is that there are not two related idea of “space” in his conceptualization. Even Taylor’s use may create a danger of confusion.  At  one point he talks of a when a person is aware of his own experience, aware of his own decisions, or makes decisions about how and why he makes his decisions, and he describes this as “that space where I am present to myself.” p. 131.
Mid 2015.  The Austin Public Library has a business card that says this: “Visit the VIRTUAL LIBRARY[.] Download eBooks, eAudiobooks, Magazines, Movies and Music.”  This is is not a “virtual library.” This is an actual library containing “things” from the cyber world which are called virtual things.  If the word “virtual” is taken to mean what it has always meant, X closely resembles Y, then the things in the actual library are not virtual eBooks, for example, they are actual eBooks. And it is false that eBooks are virtual books, they are quite different things the resemble one another in various way, such a this one: they are both objects, one tangible, one intangible whose essence is having or being a book.
Interestingly, one of the world’s most significant sources of “surface,” systematic information is WIKIPEDIA. It contains an article entitled “Virtual Law Firm.”  Maybe it exemplified both meanings: (1) almost but not quite a law firm, although it contains actual real lawyers rendering services, except for Zoom, and (2) a creature of the cyber-world only, which is clearly not true of Zoom. So, neither of these can be true, not even virtually. At the same time, there is also a squib entitled “Virtual Assistant” and bearing something like a substitute title “Virtual Office Assistant.”
There is significant metaphysics involved in all this regarding abstract entities and their existence. However, I give up.  I’ve had enough. The vocabulary of the “New World” has beaten me.  Perhaps there is virtue of some sort in resisting the destruction of the true meaning of “virtual.” Perhaps not. The thing of it is, when your in a hole, the first principle is to stop digging.  (I get this from the famous philosopher Lindsay Graham.)
The following did not result from digging. It was handed to me on a TV news show.  There is not something which is called a “virtual doctor visit.” It is a tele-medicine devise, whereby medical information in gathered together over the internet from a patient and then there is a phone call between doctor and patient. This was called a “virtual doctor-patient meeting.” This is true. In comparison to what has counted as a doctor-patient meeting or visit or appointment or examination, this kind of meeting is virtually the same as an old fashion face-to-face meeting, where a nurse might have met with the patient first or together with the doc. It was virtually the same.  However, it was not done in a virtual world. It was done in the real world.
I must also confess that the word “world” has diverse uses.  For example. philosophers and logicians have “forever” been talking about different possible worlds. This referred non-existent but but imaginable worlds. For an example of a current philosopher and logician, see Alvin Plantinga, WHERE THE CONFLICT REALLY LIES (Oxford 2011).
 I recently ran across a book on contract law entitled CONTRACTUAL GOOD FAITH written by Steven Burton. He talks about the “world of a contract.” What he is talking about is the contract interpreted in a non narrow, literal way, so that a reasonably knowledgeable person can imagine what what going on around the contract (or the contractual document) itself–what the general or even narrow practices were like–and therefore what the parties may have intended, especially where one or both parties had at least implied areas of discretionary performance. That is a sensible metaphor.

Originally posted on 06/19/2014 @ 10:14 pm

Michael Sean Quinn, PhD, JD, CPCU, Etc. (530)

One of Texas's leading insurance scholars, Michael Sean Quinn is a past chair of the Insurance Section of the State Bar of Texas and has a broad legal practice.

Read more from the same author:

Part I. Some Cyber Policies: Structure and Organization: Comparisons

Hits: 7

Read More

Quinn Quotes

A balanced life is a good life and maybe the best kind of life. No single value can always do the needed work to make a life flourish..  There are two additional problems. alas. It is not easy to find what is balanced, and it is difficult to maintain balance without dedicated practice, and not even they succeed all the time, party because most of life’s tendencies tend to drift and change. The only values that are unassailable and permanent are love and beauty. Wisdom, if one has it,  is often good thing, if one can recognize it.~Michael Sean Quinn, PhD, JD, CPCU, Etc.Tweet

The books shown are NOT affiliate links.
MSQ (site) does not receive any compensation for books listed or sold.
Books are shown for the reader's convenience only.


Michael Sean Quinn, PhD, JD, CPCU, Etc*., is available as an expert witness in insurance disputes and other litigation matters. Contact