1. 0 How To Pursue and Win the Complex Claim RIMS 2012 – Philadelphia, PA Wednesday, April 18, 2012 Ty Childress, Partner, Jones Day Los Angeles, CA tchildress@jonesday.com (213) 243-2422 John Frantz Vice President and Associate General Counsel Verizon Communications john.frantz@verizon.com (908) 559-5731 Sheila Small Assistant Treasurer, Risk Management Verizon Communications sheila.small@verizon.com (908) 559-5829

2. 1 THE MEMBERS OF THE TEAM THE RISK MANAGER  POTENTIAL STRENGTHS  Understands the policy and underwriting history  Has a good grasp of the business relationship with the insurer  Can help assess impact of this claim on overall insurance relationship

3. 2 THE MEMBERS OF THE TEAM THE RISK MANAGER  POTENTIAL WEAKNESSES  Less willing to pursue aggressive strategy if it involves conflict with professional relationships  Less attuned to legal arguments  Less knowledge of how similar claims are being handled by other policyholders  (Over)concern of premium impact on claim pursuit

4. 3 THE MEMBERS OF THE TEAM THE IN-HOUSE ATTORNEY  POTENTIAL STRENGTHS  Can offer perspective of overall business objectives of client  Brings understanding of legal issues and legal strategy  Early integration in policy negotiations can enhance coverage  Can monitor cost-effectiveness of alternative strategies

5. 4 THE MEMBERS OF THE TEAM THE IN-HOUSE ATTORNEY  POTENTIAL WEAKNESSES  Often focused on liability claims and brings defense ‑ oriented perspective  Coverage claim not always perceived as high profile within company  Workload limitations  Lack of insurance expertise

6. 5 THE MEMBERS OF THE TEAM THE OUTSIDE COUNSEL  POTENTIAL STRENGTHS  Legal expertise in insurance issues  More familiar with insurer negotiating strategy  Able to marshal resources quickly  Not encumbered with internal company politics

7. 6 THE MEMBERS OF THE TEAM THE OUTSIDE COUNSEL  POTENTIAL WEAKNESSES  Not as sensitized to internal company needs  May be less sensitive to impact to business relationship with insurer  Can let case take on a “life of its own” if not monitored

8. 7 THE MEMBERS OF THE TEAM THE BROKER  POTENTIAL STRENGTHS  Familiarity with insurance industry  Potential commercial leverage

9. 8 THE MEMBERS OF THE TEAM THE BROKER  POTENTIAL WEAKNESSES  Generally not privileged communications  Not familiar with legal issues  Not sensitive to internal company objectives

10. 9 DEVELOPING THE STRATEGY Understanding The Underlying Claim  What is the exposure?  One-time or recurring issue?  What potential arguments in the coverage claim could be inconsistent with underlying defense?  Timing considerations

11. 10 DEVELOPING THE STRATEGY Understanding The Coverage  What coverage is potentially implicated?  Were these exposures discussed during underwriting process?  Other parties’ coverage available?

12. 11 DEVELOPING THE STRATEGY Understanding The Company’s Objectives  Is this a bet-the-company exposure?  Need for a defense?  Is company prepared to fully assert its legal rights?

13. 12 TENDERING THE CLAIM Who?  By risk manager, in-house counsel, or outside counsel?  What message is sent?  Who is your “company witness”?

14. 13 TENDERING THE CLAIM Which Policies?  All policies?  Third party’s policies versus company’s own policies?  “Targeted tender”

15. 14 TENDERING THE CLAIM How?  Is there a risk of a forum battle?  Do you sue simultaneously?  Do you ask for specific acts or just precautionary notice?

16. 15 NEGOTIATING THE CLAIM Role of Risk Manager  Can use outside counsel as “bad cop” to push insurer to negotiating table  Can offer perspective on overall insurance relationship

17. 16 NEGOTIATING THE CLAIM Role of In-House Counsel  Uniquely situated to balance legal strengths, costs, and company objectives  Can facilitate team communications

18. 17 NEGOTIATING THE CLAIM Role of Outside Counsel  Can aggressively advocate company’s legal rights  Can develop legal plan to maximize exit strategy opportunities

19. 18 LITIGATING THE CLAIM Role of Outside Counsel  Brings legal expertise and resources to bear  Full understanding of procedural aspects of litigation

20. 19 LITIGATING THE CLAIM Role of In-House Counsel  Monitors proper internal and external resource allocation  Coordinates underlying claim strategy with coverage strategy  Can help translate legal process to client constituencies

21. 20 LITIGATING THE CLAIM Role of Risk Manager  Serves as critical company witness  Can monitor insurer conduct to assess future role of insurer in program

22. 21 SETTLING THE CLAIM The Outside Counsel  Identify important timing issues for leverage  After filing suit?  After critical threshold motions decided?  After witnesses deposed?  On courthouse steps?  On appeal?

23. 22 SETTLING THE CLAIM The Outside Counsel  Identify personality of mediator needed  Develop mini-trial presentation to show other side’s decisionmakers

24. 23 SETTLING THE CLAIM The Risk Manager  Identify other side’s decisionmakers  May be able to add business elements to settlement  Identify renewal issues, impact on other claims

25. 24 SETTLING THE CLAIM The In-House Counsel  Has broadest perspective on underlying claim legal strategy, coverage legal strategy, costs  Important internal advocate for claim team decisions

26. 25 CONCLUDING THOUGHTS Risk Manager Perspective  Establish relationships with key insurer personnel  Maintain close working ties with Legal Department In-House Legal Perspective  Anticipate company exposures when negotiating coverage  Persistence matters Outside Counsel Perspective  Acknowledge team members’ strengths and weaknesses  Provide real-time practical guidance and expertise