Arson by Insured’s Management Voids Coverage
Post 5156
Read the full article at https://lnkd.in/gwkA76x5, see the full video at https://lnkd.in/gBekGhfK and at https://lnkd.in/gwReRCKz and at https://zalma.com/blog plus more than 5150 posts.
Corporate Owners are not Innocent Co-Insureds
Read the full article at https://lnkd.in/gwkA76x5, see the full video at https://lnkd.in/gBekGhfK and at https://lnkd.in/gwReRCKz and at https://zalma.com/blog plus more than 5150 posts.
Arson by Insured’s Management Voids Coverage
Post 5156
Arson for Profit by Corporate Entity Management Voids Policy
Following a fire that destroyed The Press Bar and Parlor in St. Cloud, Minnesota the insurer denied coverage after its determination that Andrew Welsh – a controlling officer of the insured intentionally set the fire and submitted a false proof of loss.
In Timeless Bar, Inc., doing business as The Press Bar and Parlor; Horseshoe Club, LLC; Jessie Welsh v. Illinois Casualty Company, No. 24-2245, United States Court of Appeals, Eighth Circuit (July 22, 2025)
BACKGROUND
In 2016, Andrew and Jessie Welsh purchased The Press Bar and Parlor. They managed the business through two legal entities: Horseshoe Club, LLC, which owned the real estate, and Timeless Bar, Inc., which operated the bar.
Incident and Legal Proceedings
The Press Bar and Parlor in St. Cloud, Minnesota was destroyed by fire on February 17, 2020. Law enforcement found that Andrew Welsh, a controlling officer of the insured, intentionally set the fire.
ICC denied the claim based on three policy provisions: Concealment, Misrepresentation or Fraud; Dishonesty Exclusion; and Intentional Acts Exclusion.
Court’s Decision
The District Court concluded Andrew’s conduct barred recovery under the policy.
KEY LEGAL POINTS
Jessie Welsh’s claims were dismissed due to lack of standing as a non-insured. Andrew’s conduct was deemed attributable to both business entities.
CONCLUSION
The court affirmed the district court’s judgment, denying coverage for the loss or damage caused by the fire.
Coverage under the policy was subject to a number of conditions. One of the listed conditions is categorized as “concealment, misrepresentation or fraud.” The policy refused to allow an insured to recover for a fire intentionally caused by the insured.
As noted by the district court, the policy determination of whether coverage should be extended to innocent, nonnamed business owners rests with the state legislature, not the federal courts.
ZALMA OPINION
When a person in control of two corporate entities commits arson-for-profit he, and the corporations he controlled, committed fraud when a proof of loss was submitted saying the fire was accidental. The corporate entities could not be “innocent” co-insureds when they were controlled by the arsonist. In this case crime didn’t pay.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe to my substack at https://lnkd.in/gmmzUVBy
Go to X @bzalma;Go to the Insurance Claims Library – https://lnkd.in/gwEYk.
The Professional Claims Handler
Post 5218
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-8-barry-zalma-esq-cfe-zdwsc, see the full video at https://rumble.com/v70zl4s-the-zalma-philosophy-of-claims-handling-part-8.html and at https://youtu.be/MIYcF71ffRQ, and at https://zalma.com/blog plus more than 5200 posts.
Claims Commandment X – Thou Shall Not Pretend to be a Lawyer
Some experienced and professional claims people know the law in their area of expertise better than most lawyers.
Adjusters should be adjusters and leave lawyering to lawyers. Similarly, lawyers should be lawyers and never try to be adjusters.
Claims Commandment XI – Thou Shall Empathize With the Claimant
Everyone presenting a claim is unhappy, disturbed, shocked, injured and needs help.
Empathy is identification with and understanding of another’s situation, feelings, and motives. It is the ability to understand another person’s circumstances, point of view, thoughts, and feelings....
HOW TO CREATE AN EXCELLENCE IN CLAIMS HANDLING PROGRAM
See the full video at https://rumble.com/v70wb2i-the-zalma-philosophy-of-claims-handling-part-6.html and at https://youtu.be/tL5nDKPEs40 and at https://zalma.com/blog plus more than 5200 posts.
Post 5217
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
An Excellence in Claims Handling program begins with a statement in the insurer’s claims manual or statement of professionalism that it is dedicated to providing excellence in claims handling to every insured who presents a claim.
The excellence in claims handling program should include, at a minimum:
A series of lectures supported by text materials explaining:
A definition of insurance.
How to read and understand an insurance policy.
How to interview an insured, witness, or claimant.
How to assist an insured in the insured’s obligation to ...
The Professional Claims Handler
Post 5216
Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-5-barry-zalma-esq-cfe-jde8c, see the full video at https://rumble.com/v70q4x8-the-zalma-philosophy-of-claims-handling-part-5.html and at https://youtu.be/6b9tZQsEkB4, and at https://zalma.com/blog plus more than 5200 posts.
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
Standards to be a Professional Claims Adjuster
The Insurance claims professional should be a person who:
1. Can read and understand the insurance policies issued by the insurer.
2. Understands the promises made by the policy.
3. Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
4. Are competent investigators.
5. Have empathy and recognize the difference between empathy and sympathy.
6. ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
