Insurance Policies: The Grandparents of Contractual Black Holes

In their recent article, The Black Hole Problem in Commercial Boilerplate, Professors Stephen Choi, Mitu Gulati, and Robert Scott identify a phenomenon found in standardized contracts they describe as “contractual black holes.” The concept of black holes comes from theoretical physics. Under the original hypothesis, the gravitational pull of a black hole is so strong that once light or information is pulled past an event horizon into a black hole, it cannot escape. In recent years, the theory has been reformulated and now the hypothesis is that some information can escape, but it is so degraded that it is virtually useless. In their article, Choi, Gulati, and Scott apply the black hole concept to certain standardized contractual boilerplate provisions. Although the focus of their article is on the contractual black hole nature of pari passu clauses that are used in sovereign debt contracts, Choi, Gulati, and Scott note that “[s]tandard insurance contracts appear to be another area with the potential for terms that have lost meaning.” They are correct that insurance policies are an area in which contractual black holes would appear quite likely to develop. In this essay, to test the hypothesis that insurance policies potentially are, or contain, contractual black holes, four policy provisions found in commercial insurance policies are considered: 1) “Sue and Labor” Clauses, 2) “Ensuing Loss” Clauses, 3) “Non-Cumulation” Clauses, and 4) the “Sudden and Accidental” Pollution Exclusion. An examination of these provisions demonstrates that some policy provisions have become contractual black holes, some provisions are only apparent contractual black holes, and other provisions on their way to becoming contractual black holes were saved before the original meaning of such provisions crossed the event horizon

The Big Data Revolution and Its Impact on the Law: Introduction

Introduction to Penn State Law Review\u27s Symposium on Big Data. This article disucsses the impact of Big Data, defined as the collection of large amounts of data or information and the ability to analyze it in a meaningful way, on different people. Big Data\u27s influence on people\u27s behavior, insurers, social media and information sharing raise significant issues regarding privacy and people\u27s rights to their own data. The debate on this issue is ongoing, and its importance is further heightened with the rise of Big Data

Five Approaches to Insuring Cyber Risks

Cyber risks are some of the most dangerous risks of the twenty-first century. Many types of businesses, including retail stores, healthcare entities, and financial institutions, as well as government entities, are the targets of cyber attacks. The simple reality is that no computer security system is completely safe. They all can be breached if the hackers are skilled enough and determined. Consequently, the worldwide damages caused by cyber attacks are predicted to reach $10.5 trillion by 2025. Insuring such risks is a monumental task. The cyber insurance market currently is fragmented with hundreds of insurers selling their own cyber risk insurance policies that cover different types of cyber risks. This means the purchasers of cyber insurance must be experts in both insurance and cyber security in order to make a knowledgeable purchase. And, even knowledgeable purchasers of cyber insurance can only obtain limited coverage for cyber risks. This is because the insurance is sold on a named peril, as opposed to all-risk, basis and the policies contain numerous exclusions. Cyber policies also have relatively low policy limits in comparison to other lines of insurance and the enormity of the risks presented. This Article explores ways the cyber insurance market could be improved. In doing so, it analyzes the current cyber insurance market, including the history of cyber insurance and the challenges that insuring cyber risks present. The Article then offers five different approaches to insuring cyber risks moving forward that address many of the problems with the current cyber insurance market. Ultimately, the Article concludes the fifth approach, the novel “All-Risk Private-Public” approach, would be the best one

The "Non-Cumulation Clause": An "Other Insurance" Clause by Another Name

This is the published version

A Battlefield Map for NFL v. Insurance Industry Re: Concussion Liabilities

When the superstar athlete—“Iron Mike” Webster—a nine-time NationalFootball League (NFL) Pro Bowler, four-time Super Bowl Champion, Hall of Fame center for the Pittsburgh Steelers—died at age fifty with severe brain dysfunction after becoming homeless and living in a truck, it was discovered he had a previously nameless disease, Chronic Traumatic Encephalopathy (CTE). The discovery of CTE opened the floodgates on interest in delayed manifestation brain diseases caused by repeated blows to the head. As part of that flood, many retired NFL players brought numerous class actions against the NFL for their alleged brain diseases caused by the repeated blows to the head they received while playing in the NFL. That litigation recently settled with the NFL’s liability totaling approximately $1 billion, and now the battle over who will pay that$1 billion liability is being fought between the NFL and more than thirty of the NFL’s insurers in a New York state court (the NFL v. Insurance Industry litigation). This Article is the first scholarly effort to analyze the NFL v. Insurance Industry litigation. In doing so, it provides a battlefield map regarding the principal legal issues that will govern the outcome of the NFL v. Insurance Industry litigation: (1) choice of law, (2) “trigger,” (3) “allocation,” (4) “number of occurrences,” and (5) the “expected or intended” exclusion. The Article then compares and contrasts the law on these issues for New York, the state in which the NFL v. Insurance Industry is being litigated, and Pennsylvania, the state in which the underlying NFL players’ class actions were adjudicated, and predicts potential outcomes under each state’s laws

Dr James Ost’s contributions to the work of the British False Memory Society

The British False Memory Society (BFMS) is a registered charity founded in 1993 in response to an epidemic of false claims of past childhood sexual abuse by adults in therapy. The accusers believe they have recovered unconscious memories of a hidden past, but scientific and other evidence raise the possibility of false memories or retrospective reappraisal. The BFMS aims to raise awareness about false memory and to reduce the impact of the resulting false accusations. Dr James Ost was an active member of the BFMS’s Scientific and Professional Advisory Board. Three lines of his research were particularly relevant to the work of the BFMS. The first of these was his investigations of retractors. His insights provided a deeper understanding of processes involved in the formation and subsequent rejection of false memories and beliefs relating to such allegations. He also carried out experimental studies providing empirical proof that false memories can be implanted under well controlled conditions. Finally, he carried out, and produced reviews of, surveys of misconceptions about the nature of memory, thus highlighting issues that have major implications for the working of the legal system. Dr Ost also served as an expert defence witness on a number of occasions