Risk Management & Insurance

Risk Management & Insurance

Overview

Cox, Castle & Nicholson assists the real estate and construction industries in creating, implementing, and enforcing risk management and insurance coverage strategies. 

Our comprehensive, integrated approach to managing and insuring risk draws on our extensive transactional and litigation experience representing owners, homebuilders, developers, investors, contractors, and lenders. We help our clients identify the risks of their operations, including their completed operations, then implement legal strategies to avoid, minimize, shift, insure, or retain those risks.

Our expertise extends to virtually every real estate product type, whether new ground-up construction or existing structures, including residential (single-family detached, planned unit developments, townhomes, mid-rise and high-rise condominiums, apartments and condominium conversions), mixed-use, adaptive reuse, golf course, healthcare, office, industrial, and retail.

Risk Management Expertise Through The Life Cycle Of The Project 

We apply our expertise commencing with the early planning stages of the project, continuing through entity formation, financing, land acquisition, site work, grading and infrastructure improvements, vertical construction, sales and leasing, implementation of customer service and warranty programs, and execution of project exit strategies, including entity dissolution.  

Our Primary Areas Of Service

  • Contractual risk transfer, including indemnification, insurance requirements, and other risk transfer provisions in real estate and construction contracts
  • Operational risk management counsel, including on issues such as entity structuring and dissolution, due diligence, design and construction quality assurance protocols, and implementation of customer service and warranty programs
  • Preparation of project documentation, including CC&Rs, consumer sales agreements, and disclosures
  • On-call strategic legal advice to clients in crisis settings, both prelitigation and in litigation
  • Prelitigation claims and litigation counsel in a wide range of complex real estate, construction, and insurance coverage matters

Leadership As Insurance Coverage Transactional And Litigation Counsel  

Our attorneys are pioneers in serving as insurance coverage counsel for our clients. We collaborate with our clients' corporate counsel, risk managers, and insurance brokers in:

  • Coverage selection, including assisting in the design of the clients' insurance programs
  • Insurance policy reviews, including legal analysis and critiques of proposed policy forms and endorsements
  • Negotiating and documenting coverage clarifications and enhancements, including manuscripting of policy wording
  • Legal structuring and implementation of wrap-up insurance programs (OCIPs and CCIPs), both project-specific and rolling multi-project programs
  • Prosecuting insurance claims under our clients' first party and third party policies, including enforcement of the duty to defend and the settlement and indemnity obligations of liability insurers, as well as the strategic application of other parties' insurance policies

Insurance Coverage Litigation   

We also have extensive experience litigating complex insurance coverage issues for our policyholder clients under commercial general liability, umbrella and excess liability, builder's risk, pollution liability, and property insurance policies.

Experts Among Our Peers

We regularly lecture and publish articles on risk management and insurance issues. We are active participants in leading industry trade associations, including the International Risk Management Institute (IRMI), the Risk and Insurance Management Society (RIMS), the Building Industry Association, the National Association of Home Builders, and HomeAid.

Representative Matters

Successfully settled a construction defect claim brought by numerous homeowners against a developer of tract homes, utilizing proceeds from the insurance carriers and subcontractors.

Obtained a mediated settlement for a national public homebuilder under its umbrella liability policies on a Chinese drywall coverage claim involving over 200 homes, despite adverse law on the pollution exclusion in the forum state.

Successfully negotiated a settlement for a national homebuilder of complex insurance coverage litigation in U.S. District Court concerning underlying construction defect class action involving over 400 homes, with parallel actions in out-of-state court.

Obtained a favorable settlement for a national REIT under its permanent property insurance policy for a substantial water intrusion loss involving multiple dwelling units and common area in a major mixed-use development.

Obtained a mediated settlement for a bank and its homebuilding subsidiary under multiple CGL and umbrella liability policies in a $350 million reformation and bad faith action arising out of soils and concrete conditions in several hundred homes.

Prevailed on a motion for partial summary judgment for a national public homebuilder. The court ruled that Chinese drywall losses in over 200 homes constituted a single occurrence under a contractors pollution liability policy, which required the client to pay only one self-insured retention.

Prevailed on a motion for summary judgment by our client, a general contractor, against a subcontractor's CGL insurer in a complex fatality action and shifted liability for a $6 million underlying judgment to the subcontractor's insurer under an additional insured endorsement, recovered the client's defense costs, and obtained substantial Brandt fees for the insurer's bad faith.

Recovered 100% of defense costs and indemnity payments for a regional private homebuilder as an additional insured in a construction defect bad faith action against a subcontractor's CGL insurer.

Litigation counsel for a regional developer in defense of homeowners' association suit and obtained 100% coverage of defense and indemnity payments through enforcement of contractual indemnity and additional insured coverage.

Represented a mixed-use developer in recovering from its builders' risk carrier its repair and soft costs associated with significant course of construction damage through negotiation without need for litigation.

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Secured defense of a developer by insurer under liability policy in large construction defect action after carrier's initial denial based on claimed application of multiple, rather than a single, self-insured retention.

Recovered millions of dollars prosecuting non-disclosure claims and defect claims on behalf of owners of high-end homes throughout Southern California. Targets included insurance carriers (first and third party), sellers, and brokers who failed to disclose material information, as well as general contractors, subcontractors, architects, engineers, and others involved in the design and construction of the homes.

Represented a national builder in multi-million dollar construction defect action brought by owners of attached townhomes in Camarillo. Variety of significant defects alleged, including failing retaining walls, leaking pot-shelves, etc.

Personal litigation defense and risk management counsel for numerous private homebuilders in California's Central Valley in cases involving design and construction defects.

Served as personal litigation and risk management counsel to a private homebuilder in Nevada in a case involving more than 50 homeowners suing for multiple design and construction defects.

Obtained defense verdict after a four-month class action jury trial alleging fraud and defective construction in a high-rise luxury condominium project.

Extensive insurance coverage analyses concerning positions taken on various types of policies, including Director's & Officer's policies and Errors & Omissions policies, on behalf of a national insurance company

Successfully defeated multi-million dollar claim under a Director's & Officer's policy in connection with several lawsuits arising from a stock loan transaction scheme. After extensive investigation, the claim was denied and, thereafter, the insured retracted its claim.

Brought an action on behalf of underwritten title company for the alleged fraudulent appraisals on multiple residential properties.

Defended an action by the underwriter of a title company against its underwritten title company for the alleged failure to identify fraudulent appraisals on multiple residential properties.

Obtained an order that suicide clause in insurance policy was not triggered because suicide is an intentional act and the insured was so mentally ill that she could not form the requisite intent.

Represented a title insurance company in bad faith case.

Drafted successful summary judgment motion against title insurance carrier for fraudulent transfer of title by seller.

Represented real estate developers in action against insurers seeking coverage for construction defect liabilities.

Represented a risk retention group in defense of action by rail carrier seeking coverage for wrongful death and bodily injury claims.

Served as insurance coverage and personal counsel in obtaining a favorable mediated settlement of a catastrophic bodily injury suit by a construction worker on a major medical facility project in New York City, with 100% of the settlement funding provided by liability insurers for other parties and by the project wrap-up liability insurer for our client, the owner/developer.

Served as insurance coverage and personal counsel in obtaining a favorable mediated settlement of a construction defect property damage claim by our client, the developer of a townhome community in Hawaii, against its wrap-up liability insurer. The client recovered 200% of its initially-estimated repair costs.

Served as insurance coverage and personal counsel in obtaining a favorable mediated settlement of a significant bodily injury suit, including a punitive damages claim, by residents of a new ground up condominium project in San Diego, California, with the bulk of the settlement funding contributed by the wrap-up liability insurer for our client.

Obtained a favorable settlement for a major commercial building owner of a complex builder's risk soft costs coverage claim, including the issue of the number of occurrences and deductibles.

Obtained a favorable settlement for a regional private homebuilder under its umbrella liability policies on a Chinese drywall claim involving over 175 homes, including the issue of the number of occurrences and self-insured retentions

Served as insurance coverage and personal counsel in obtaining a favorable mediated settlement of a multi-million dollar condominium conversion construction defect suit in Boston, Massachusetts by the project homeowners association, with the bulk of the settlement funding contributed by liability insurers for other parties and for our client, the converter.

Insurance coverage and risk management counsel for a regional developer in connection with negotiation and contractual implementation of a rolling OCIP covering more than 800 for-sale and apartment units in Northern California.

Insurance coverage and risk management counsel for the developer of a major mixed-use community in Los Angeles, comprised of more than 2,000 for-sale and apartment units, retail and commercial space, including negotiation of design professional and construction contracts and negotiation, structuring and contractual implementation of a multi-line rolling OCIP.

Insurance coverage counsel for a regional land developer in connection with the negotiation of a rolling OCIP covering more than 400 lots in Las Vegas.

Insurance coverage counsel for the negotiation and contractual implementation of a project-specific OCIP for a large mixed-use commercial project in Washington, D.C.

Insurance coverage counsel for the negotiation, structuring and contractual implementation of a rolling OCIP covering several thousand apartment units in multiple states for a national apartment developer and operator.

Represented a major land developer in the design, structuring, and implementation of a liability insurance program for a $100 million residential building lot development in Las Vegas.

Served as risk management counsel for a California-based multi-family developer in connection with a $350 million (construction value) portfolio of condominium projects in California, Washington, and Nevada, including negotiation and drafting of design professional and construction contracts and negotiation, structuring and implementation of a rolling portfolio OCIP.

Risk management counsel for a prominent California non-profit housing developer in connection with for-sale residential development projects with total construction value in excess of $300 million, including insurance coverage counsel for the design, structuring, and implementation of a $45 million rolling OCIP.

Served as risk management counsel for the developer of a 16-story condominium tower in Southern California, including negotiation and drafting of architect, engineer, and general contractor agreements and legal review and negotiation of insurance policy forms and endorsements for the project-specific OCIP and professional liability insurance programs.

Represented a large Southern California property owner in the design, structuring, and implementation of a $100 million rolling OCIP for a portfolio of mixed-use projects comprised of over 2,000 condominium and apartment units and over 100,000 square feet of retail space.

Represented a national public homebuilder in implementing a new, company-wide liability insurance program, which combined traditional CGL insurance with a special coverage for certain of the builder's warranty obligations to its customers, including legal review and negotiation of the insurance policy form and endorsements, and counsel on legal changes needed to the builder's consumer sales documents, warranty form and operations procedures to implement the new insurance program.

Represented an asbestos insulation company in coverage action for asbestos injury claims.

Represented a beneficiary against life insurance company claiming misrepresentation and non-disclosure in the application by the insured.

Represented defense, telecommunications, and automobile manufacturers in environmental insurance coverage actions involving environmental liabilities at multiple manufacturing and Superfund sites.

Represented a domestic insurance company in arbitration against London market carriers seeking reinsurance coverage for environmental claims.

Represented an insurance carrier in actions by real estate developers and subcontractors seeking coverage for construction defect liabilities.

Represented an insurance carrier in arbitration and action for provisional relief (writ of attachment) against former insurance agent seeking payment of misappropriated policy premiums.

Represented an insurance company against claim brought by insured for breach of contract.

Represented oil and chemical companies in environmental insurance coverage actions involving liabilities at oil refineries, chemical plants, storage facilities, pipelines, and service stations in multiple states.

Represented policyholders and insurance carriers in first party property coverage claims.

Represented a real estate developer in action against professional liability carrier and architect over defective roof at mixed-use development.

Represented wood treating companies in environmental insurance coverage actions.

On behalf of a condominium homeowners association, persuaded a CGL carrier to defend an action by a homeowner, alleging violations of the federal Fair Housing Act, and related state legislation, notwithstanding the policy's exclusions for discrimination.

Defended an insurance company as surety on public works payment bonds against employee class action claims for unpaid prevailing wages.

Represented the trustees of a fund against multiple carriers for breach of contract and of the covenant of good faith and fair dealing in refusal to provide a defense and coverage under officers and director's policy.

Risk management counsel for a national developer in connection with sale of partially sold condominium high-rise building, including resolution of dispute with project buyer over potential future liability issues through negotiation of risk transfer provisions and insurance structure.

On behalf of a large, private homebuilder, negotiated the terms of retention buy-down policy to restructure self-insured retentions applicable to builder's portfolio of commercial general liability policies.

Defended an insurance company in state court action alleging breach of insurance contract and bad faith in a coverage dispute arising out of separate underlying employment lawsuit.

Represented a community bank in a jury trial malpractice action against an insurance broker for failing to timely report a loss incurred by the bank to the bank's fiduciary liability insurance carrier.

Represented a community bank in an insurance coverage dispute under a fiduciary liability policy in federal court.

Represented an insurance company and prevailed on summary judgment where insurer was sued for failure to defend wage and hour lawsuit and indemnify insured for settlement because claim was barred by employment practices and intentional acts exclusions under the insured's liability policy.

Defended a golf course REIT client in litigation brought by buyer of Palm Springs area golf course over alleged failure to disclose infestation of microscopic turf pests. Obtained defense and indemnity for golf course REIT under "off the page" insurance forms, in litigation involving REIT's alleged failure to disclose pest infestation prior to sale of the course.

Defended an insurance carrier in contribution and indemnity action brought by another carrier alleging that monies were owed for payments made in an underlying personal injury action.

Handled first party property insurance claim on behalf of golf course lender following destruction of portion of golf course.

Obtained summary judgment in favor of an insurance company client in declaratory relief litigation over the policy limits applicable in a wrongful death lawsuit filed against a permissive driver with additional insured coverage under the policy.

Obtained summary judgment in favor of an insured on the application of an exclusion for damage caused by electrical disturbance contained in the building owner's fire insurance policy.

Prevailed on a motion for summary adjudication on behalf of an outdoor advertising business and obtained order that an insurance carrier was obligated to defend an action by the City of Los Angeles seeking the removal of "supergraphic" billboard signs.

Represented a construction company in an action against insurance broker for failure to tender claim to proper insurance carrier, despite promise to do so.

Settled action brought by an insurance company against insurance agent for binding policies of insurance without the insurance company's knowledge and otherwise violating his obligations to the carrier.

Successfully litigated numerous rescission claims based on the insureds' alleged failure to disclose material information in the application process.

Without filing litigation, persuaded several reluctant CGL carriers to agree to defend actions involving: (i) construction defect claims; (ii) nuisance and trespass claims resulting from construction activities; (iii) fraud and conspiracy claims resulting from alleged violations of City Building Codes and Setback Ordinances; and (iv) violations of the federal Fair Housing Act and related state legislation. Insurance carriers who are slow to accept their defense obligation may be required to reimburse defense costs at full hourly rates from the date of tender to the date of acceptance of the defense.

Drafted, argued, and won a defense motion for summary judgment in an insurance bad faith case.

Assisted clients in structuring components of distressed asset (residential/mixed-use) acquisition to avoid Title 7 (SB 800) liability.

Served as personal counsel for builder in resolving claims brought by numerous homeowners for subsidence of homes built on a old canal that had not been compacted properly. Worked with builder to relocate homeowners and repair damage. Analyzed, secured, and monitored complicated primary and excess insurance coverage issues and use of insurance policy proceeds to settle homeowner claims.

Assisted numerous clients throughout California, Nevada, and Arizona in creating and implementing anti-plaintiff lawyer solicitation strategies and protocols.

Counseled numerous public and private builders and developers to design and implement anti-solicitation strategies to combat plaintiff lawyer actions.

Created a repair program and protocols for investor regarding defects in a distressed asset (high-rise condominium).

Developed consultant investigation, communication, and documentation protocols for numerous public and private developers to maximize confidentiality and minimize disclosure liability exposure.

National risk management counsel for multi-state private homebuilder.

Personal counsel to affordable housing developer in claim by a condominium homeowners association alleging Title 7 (SB 800) claims.

Personal risk management counsel for master planned community developer to implement a project-wide owner-controlled insurance program (OCIP).

Represented numerous public and private homebuilders in structuring, documenting, and implementing protocols regarding Title 7 (SB 800), and the Calderon process applicable to condominiums, including drafting and implementing consumer warranties and dispute resolution provisions.

Risk management counsel for developer of ocean front apartments in evaluating and prosecuting recovery for project-wide window product failures and resulting damage.

Risk management counsel team member to multi-state homebuilder regarding Chinese drywall claims.

Structured investigation and repair/price negotiation program during investor due diligence period in connection with apartment purchase where the buildings revealed a history of water intrusion.

Implemented numerous liability insurance owner-controlled wrap insurance (OCIP) programs for public and private homebuilders.

Successfully prosecuted reformation action against numerous national insurance companies seeking to add coverage for an estimated $500 million in coverage for national developer.

Achieved an early resolution of an action brought by an insurance company against insurance agent for binding policies of insurance without the insurance company's knowledge and otherwise violating his obligations to the carrier.

Obtained favorable settlement for purchaser of two homes in Riverside in declaratory relief action brought by insurance company that refused to defend or indemnify the purchaser as the result of a fraudulent transfer of the property by a seller that did not actually have title to the property.

Served as risk management counsel for a national developer in connection with the disposition of a high-rise condominium project with both sold and unsold units, including resolution of a dispute with the buyer regarding potential future construction liability issues through negotiation of risk transfer and insurance provisions

Defended a national public homebuilder in a homeowner class action suit involving alleged soils and structural code violations and other deficiencies in over 400 homes.

Acted as risk management counsel for a national residential developer in connection with comprehensive updates to master construction agreements and related insurance documentation for applicable OCIP insurance programs, including evaluating and addressing contract administration considerations.

Representing policyholders in claims involving CGL, E&O, D&O, EPLI, and environmental policies

Representing and advising title insures with respect to multi-million dollar claims

Successfully defended a leading medical malpractice insurer in numerous breach of contract and bad faith actions by means of dispositive motions.

Negotiated numerous settlements of disputes and lawsuits involving professional and commercial liability claims.

Successfully settled Federal litigation concerning the importation of goods and/or fabric from overseas involving importers, distributors, and manufacturers of the goods and/or fabric.

Attorneys &
Paralegals

Name Title City Phone  
Masters, Jeffrey D. Partner Los Angeles 310.284.2239
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McGovern, Patrick Senior Counsel Los Angeles 310.284.2298
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Musitano, John R. Partner Los Angeles 310.284.2212
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Quigley, Edward F. Partner Los Angeles 310.284.2271
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Vaz, Alicia N. Partner Los Angeles 310.284.2273
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Williams, Kenneth Partner Los Angeles 310.284.2209
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