1. A large publisher procured a media liability errors and omissions policy with an insurance carrier. The policy covered content liability Claims (e.g., for defamation, invasion of privacy, etc.) and its base form defined insurable Defense Costs as reasonable attorneys fees and costs incurred in investigating, defending, opposing, or appealing any Claim. The policy also included an endorsement which capped attorneys fees and costs to no greater than $500 per hour.

1. What is an endorsement? (2 points)

2. A lawsuit is filed against the publisher requiring the appointment of defense counsel to represent the publishers interests. Counsel is looking to be reimbursed at $750 per hour for legal work.

1. Assume that the publisher has a $100,000 deductible. How much per hour in attorneys fees will the media liability insurance carrier apply to (or credit) the publishers deductible? Why? (4 points)

2. How about in excess of the deductible but subject to the applicable limit of liability issued to the publisher? (4 points)

3. Assume that the policy contained an additional endorsement which removed the obligation of the media liability insurer to pay for indemnification other than Defense Costs. The publisher is provided with the opportunity to settle the lawsuit for $1,000,000. (10 points)

1. How much should the media liability insurance carrier offer to contribute towards settlement?