Business Workshop: Insurance law, technology licensing, veterans, employee safety
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When the Pennsylvania Supreme Court ruled that homeowner's insurance covered the acts of mass murderer Richard Baumhammers, it not only made for a bizarre New Year's headline, it also caught the attention of the world of business insurance.
The Baumhammers' homeowners insurance capped the available coverage on a per occurrence basis so that more occurrences meant more coverage. The Superior Court held that Richard Baumhammers committed six individual acts of shooting his victims, which meant six occurrences. But the Supreme Court overruled, stating that just one covered act gave rise to the liability: the parents' act of negligence regarding storage of the handgun Baumhammers used on his shooting spree.
Insurers may now attempt to extend this decision to business insurance claims, such as environmental hazards or defective products. Insurance companies may argue that because one event caused the problem, there is only one occurrence, even if an accident or product defect affected hundreds of people.
The net impact of this decision may be a reduction in the amount of available liability coverage and, in turn, the placement of greater risk on the shoulders of businesses.
Depending on how aggressive insurance companies are, the ruling may end up changing how businesses address a wide range of insurance-related matters, including what type of insurance to buy, how much deductible to take and how to structure a lawsuit when the insurance company doesn't agree to cover an accident.
-- Richard T. Victoria, Meyer Unkovic & Scott, rtv@muslaw.com
Technology license agreements keep popping up more frequently in many business dealings -- in independent contractor agreements, manufacturing and distribution agreements, technology development deals and software licenses.
A technology license agreement protects a company as it tries to exploit its intellectual property, such as manufacturing processes and finished products. It also can protect a company that wants to benefit from the use of the technology of another company.
The most important thing a technology license does is to define the scope of the rights that the company granting the license is giving to the company that will benefit from using the technology, process or product. In negotiating the scope of rights, it is important to answer several questions: What is being licensed? Is the license exclusive or nonexclusive? How long? Where? How many users? Typically the answers to these questions will limit the rights of the one granted the license.
Other major issues that should be addressed in the negotiation of a technology agreement are:
• Delivery, acceptance and payment terms.
• Calculating and confirming royalty rates.
• Warranties that guarantee that the technology will work and that it does not violate the intellectual property rights of a third party.
• Remedies if either side does not meet the obligations of the license.
A company unaware of these issues will often find that it eventually ends up dissatisfied with the licensing agreement.
-- David Oberdick, Meyer Unkovic & Scott, dgo@muslaw.com
It took it more than eight years, but the Occupational Safety & Health Administration finally published the regulations that require employers to pay for certain personal protective equipment when such equipment is necessary to protect employees from job-related injuries and illnesses. Employers are required to be in compliance with the regulations by May 15.
In 1999, OSHA first proposed regulations to clarify an employer's responsibility to pay for employees' personal protective equipment that is necessary to comply with OSHA's safety standards, such as protective eyewear, hard hats, face shields, welding helmets, chemical protective equipment and fall protection equipment.
There are some exceptions to the new rules. For example, employers don't have to pay for nonspecialty protective footwear, such as steel-toed shoes, or prescription eyewear when the employer permits the employee to wear them outside the workplace. Employers do not have to pay for everyday clothing, such as long-sleeved shirts and work boots. Employees must bear the cost if they prefer to use their own equipment instead of what the employer provides.
-- Elaina Smiley, Meyer Unkovic & Scott, es@muslaw.com
When President Bush signed the National Defense Authorization Act early this year, it marked the first ever expansion of the Family and Medical Leave Act.
Now employees who need time off to care for a recovering service member are eligible for up to 26 weeks within a single 12-month period, more than twice as long as the standard 12 weeks of FMLA leave.
The new law defines recovering service member as a member of the armed forces who falls ill or is injured during active duty, and as a result is unable perform his or her duties. To qualify for leave, the employee must be the spouse, parent, child or nearest blood relative of the injured service member.
An employee also can get leave because of "any qualifying exigency" that arises out of a family member's service in the Armed Forces or because a family member is called to duty. A family member under this provision is limited to spouse, parent or child. Employees who take leave for this "qualifying exigency" reason will be entitled to 12 weeks of FMLA leave. The Department of Labor has not yet announced regulations defining "qualifying exigency," but employers must act in good faith to comply with the provision until the regulations are released.
The amendments are effective immediately, so employers should update their handbooks and company procedures to comply.
-- Antoinette Oliver, Meyer Unkovic & Scott, aco@muslaw.com
First Published March 5, 2008 12:00 am
