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home / insurance / in the media

RCR Wireless News
Feb 03, 2003

by Jeffrey Silva

The Good Hands People

Want to hear a man-bites-dog story? Wireless firms are filing health-related lawsuits. Yep, even as the mobile-phone industry chalks up one victory after another in health litigation and points to court decisions as vindication of their claims that handsets are risk-free, they are scrapping behind the scenes with insurance lawyers over liability coverage.

Wireless companies believe existing policies cover brain cancer and class action headset suits. But some insurance companies-at least those still willing to write policies-say otherwise. While the $100 billion mobile-phone industry has an unblemished track record in health litigation, it is not faring so well in court against the $325 billion insurance industry.

Mark E. Miller, an environmental and litigation attorney here with experience in wireless coverage disputes, says mobile-phone firms have assumed that because liability insurance policies cover the defense of ''groundless, false or fraudulent'' bodily injury allegations, securing coverage for health suits shouldn't be a problem. Not so. Miller says the deluge of wireless health suits in recent years has scared insurance companies, creating legal friction with wireless firms. When that happens, courts have denied coverage because judges view health suits as an economic matter, not fraudulent claims of injury.

Miller said Motorola Inc., AT&T Wireless Services Inc. and T-Mobile USA have brought litigation against insurance companies in Washington and Louisiana, states said to be sympathetic to policyholders.

The ringleader of the crusade against wireless litigation coverage is Zurich American Insurance Co., a party tangled in several lawsuits with wireless companies.

Miller said the trend has been for insurers to deny liability coverage to wireless carriers and vendors named in class action headset suits, ripe for a ruling by U.S. District Judge Catherine Blake. In brain cancer cases, like the one Blake dismissed last September, wireless firms have managed to get insurance companies to defray some defense costs-which ain't cheap.

So you've dodged (so far) mobile-phone health litigation. But now, hackers have infiltrated your computers and brought your wireless company to its knees. Sorry Charlie. Insurers aren't real keen on paying for cyberattacks either. If you're lucky enough to have liability coverage in this era of corporate corruption, you've probably seen your rates skyrocket.

You've got to feel for all these insurance companies that have so much sway over your businesses. After all, they need to recoup massive losses incurred from heavy investments in WorldCom, Tellabs, WinStar, Enron, Tyco and the like, according to the Foundation for Taxpayer and Consumer Rights. Always there for you, just like a good neighbor. Ha!

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