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Insurance Abstract
An insurance instrument designed to compensate civilians, professionals,
corporations, public figures, high-profile individuals and/or business
owners from costs associated with criminal litigation, comprising
three sectors of coverage; litigation expenses, business operating
expenses, and loss of income expenses. The insurance instrument
provides full coverage for individuals upon arrest, and continues
throughout the litigation process, paying for business expenses,
and lost income incurred by the policyholder during this process.
Insurance Claims
1. An insurance instrument providing criminal liability insurance,
including coverage for complete legal representation during criminal
litigation action, the overhead expenses of a policyholder's business,
and the loss of personal income by a policyholder due to the action;
wherein each type of coverage may be applied individually.
2. The insurance instrument of claim 1, wherein the litigation
insurance provides immediate assistance to the policyholder from
the time of arrest until the termination of the legal action; comprising
bail provisions, law firm retention, and all payment obligations.
3. The insurance instrument of claim 1, wherein the overhead expense
coverage provides payments based on the demonstrated income and
expenses of the business to cover all business expenses as the legal
action proceeds.
4. The insurance instrument of claim 1, wherein the loss of income
coverage provides payments to a policyholder based on his demonstrated
income to compensate for expenditures made in the course of the
legal action.
5. The insurance instrument of claim 1, wherein participation or
membership in illegal organizations, convictions for violent felonies,
and treatment for psychiatric conditions presents an absolute bar
to coverage.
6. The insurance instrument of claim 1, wherein a prior record
of alcohol or drug use, or a history of driving under the influence,
domestic violence, multiple misdemeanors, and white collar crimes
present a conditional bar to coverage.
7. The insurance instrument of claim 1, wherein payments made under
a policy are denied upon the knowing and voluntary commission of
a crime constituting a felony, or any criminal act specified by
the policy; wherein this determination is made by the law firm representing
the insured after a careful evaluation of the case.
8. The insurance instrument of claim 1, wherein a waiver of monthly
premiums is applied upon activation of coverage, after the report
of an incident by a policyholder, until termination of litigation,
or the final conclusion of the case.
9. The insurance instrument of claim 1, wherein discounts are conferred
on policyholders with no prior criminal record and policyholders
who elect multiple policies.
10. The insurance instrument of claim 1, wherein any tax liability
for payments made under the insurance policy or policies is covered
by the insurer.
11. The insurance instrument of claim 1, wherein the policy may
not be cancelled by the insurer in the absence of an exclusionary
triggering event by the policyholder, and wherein the policy is
a part of an extended group of insurance instruments bundled together
to protect the policyholder.
12. A method of implementing an insurance policy in the event of
a claim based on a criminal action comprising the steps of; contacting
the insurer upon arrest; the insurer confirming the arrest through
the arresting agency; contacting a law firm to represent the policyholder
and assigning an attorney on an on-call basis; retaining a bail
bond provider for the client; the attorney and bail bond provider
meeting with the policyholder to effect the policyholder's immediate
release and provide the policyholder with information regarding
the case; the insurer making payments to the law firm throughout
the litigation; and the insurer contacting the client to obtain
business and personal financial information for payments to the
policyholder.
13. The method of claim 11, wherein the policyholder must inform
the insurer in the event another attorney is selected for representation.
14. The method of claim 11, wherein the policyholder's choice of
another attorney not provided by the insurer results in the total
amount of the policyholder's coverage being reduced by a percentage
provided by the insurer, although individual payments remain the
same.
15. The method of claim 11, wherein the insurer makes regular payments
to the representing law firm and policyholder for expenses related
to the litigation.
16. The method of claim 11, wherein the insurance coverage continues
until cessation of the litigation or the limit of coverage is reached.
17. The method of claim 11, wherein the insurance coverage extends
to the appeals process, to the extent funds are available.
18. The insurance instrument of claim 1, wherein overhead expenses
are determined by averaging the last two years of a policyholder's
overhead business expenses.
19. The insurance instrument of claim 1, wherein the average is
determined by the prior six months operating expenses in the event
the policy is more than two years old.
20. The insurance instrument of claim 1, wherein the calculation
of benefits for loss of income is determined by the income change
of the policyholder over the last two years.
21. The insurance instrument of claim 1, wherein the calculation
of benefits for loss of income is established by paycheck receipts,
invoices, or tax returns.
22. The insurance instrument of claim 1, wherein the policy also
applies to arrests made while a policyholder is traveling outside
the United States.
Insurance Description
CROSS-REFERENCE TO RELATED APPLICATION
[0001] None
FEDERALLY SPONSORED RESEARCH
[0002] Not Applicable
SEQUENCE LISTING OR PROGRAM
[0003] Not Applicable
STATEMENT REGARDING COPYRIGHTED MATERIAL
[0004] Portions of the disclosure of this patent document contain
material that is subject to copyright protection. The copyright
owner has no objection to the facsimile reproduction by anyone of
the patent document or the patent disclosure as it appears in the
Patent and Trademark Office file or records, but otherwise reserves
all copyright rights whatsoever.
BACKGROUND
[0005] Insurance companies provide citizens and businesses with
the economic security necessary to survive unpredictable and sometimes
devastating events. Despite the multitude of available insurance
products in today's market, coverage deficiencies exist within the
insurance industries, resulting in a lack of complete protection
for policyholders.
[0006] One area where such a gap exists is liability coverage for
criminal litigation actions against civilians, professionals, corporations,
public figures and/or high-profile individuals. Everyone is exposed
to questionable lawsuits or governmental investigations. When liability
arises in these circumstances, the costs often extend not only to
the defense of the action, but also to a professional's business
and personal income. To deal with this problem, the present invention
is designed to protect personal assets, maintain the viability of
a business and cover all criminal litigation related expenses.
[0007] The insurance instrument of the present invention improves
over the known art since it allows a policyholder to transfer the
risk of financial loss to the insurance company. Therefore it is
an object of the present invention to provide insurance coverage
for litigation expenses and all associated costs due to arrest,
trial expenses, and costs incurred as a result of defending the
action. It is a further object of the present invention to provide
an insurance instrument that will provide loss of business income,
loss of personal income, and litigation expenses during a criminal
legal matter.
SUMMARY
[0008] An insurance instrument to cover losses from criminal liability
not contemplated by current insurance policies. The insurance instrument
consists of three sectors tailored to individual policy holders.
Each policy may be offered based on the following variables; profession,
age range, desired coverage, background, business ownership, and
family member co-enrollment.
[0009] The sectors of coverage comprise; litigation insurance covering
the total costs of litigation, business overhead coverage, and loss
of income coverage, to make up the difference between the policy
holder's projected income, and actual income after a claim is made
on the insurance policy. Each of the sectors comprises an independent
insurance instrument.
[0010] The principle sector comprising security insurance is the
litigation insurance coverage. Litigation insurance provides immediate
assistance to the policyholder in the event of criminal liability
by immediately providing bail, and assigning a law firm to represent
the policyholder's interests. This instrument provides complete
financial support for the policyholder, by covering all legal expenses
during arrest, pretrial and trial.
[0011] The second sector comprising security insurance is overhead
expense coverage. Intended principally to support business owners,
overhead expense coverage operates similarly to overhead expense
coverage in disability insurance, in that it covers the operating
costs of a business while the litigation is in process. This sector
therefore allows business owners to sustain ongoing business activities
during litigation.
[0012] The final sector of security insurance is loss of income
coverage. This sector is designed to compensate the policyholder
for individual income losses incurred as a result of litigation.
Under this sector, the calculation of benefits is based on the professional
or business owner's prior two years of income tax statements, or
in the alternative, the last 12 months of earning's statements.
Individuals or business owners with no prior evidence of earning
statements due to a newly established business must sign to the
fixed rate income provided by the insurance company. This sector,
along with the loss of income coverage sector is intended to operate
similarly to disability insurance; however, in the present invention,
these sectors protect financial rather than personal health.
[0013] In order to limit coverage to qualified individuals; the
present invention contemplates absolute and conditional enrollment
exclusion criteria, and exclusions for payments or coverage. In
addition if a policyholder knowingly commits a felony, or any of
a list of criminal acts prescribed by the policy, that at the time
of commission is known to be criminal, coverage will be denied.
A decision regarding the denial of coverage is made by the law firm
retained by the insurer to represent the policy holder.
[0014] Discounts for security insurance are applied for policyholders
with no prior criminal records or evidence of criminal activities,
and when a policyholder elects all three sectors of coverage, the
aggregate premium amount is lower than the total individual premiums
for each sector. Furthermore, it is the security insurance of the
present invention compensates policyholders such that no taxes are
incurred for payments for litigation, overhead expenses, or loss
of income coverage.
[0015] The security insurance policy is non-cancelable by the insurer
as long as all policyholder criteria are met and verified at the
time a policy is executed. The security insurance policy is intended
for a wide range of customers as a supplement to other instruments
currently available in the insurance industry, such as professional
liability insurance, automobile insurance, life insurance, travel
insurance, etc.
BRIEF DESCRIPTION OF THE FIGURES
[0016] FIG. 1 is a table representing the three sectors of coverage
of the present invention, and the elimination periods, benefit periods
and deductibles for each
DETAILED DESCRIPTION
[0017] The present invention is an insurance instrument to cover
losses from criminal liability not contemplated by insurance policies
as they are currently known in the art. The present invention contemplates
an insurance instrument designed to reimburse a policyholder, not
only for the direct losses from criminal liability, but also from
incidental losses incurred from such liability not typically covered
by insurance instruments; including a determination of lost profits,
and compensation for expenses incurred during a criminal legal matter.
[0018] The insurance instrument of the present invention, consists
of a series of sectors tailored to individual policy holders depending
on the following variables; profession, age range, desired coverage,
background, business ownership, and enrollment of family members
or employees in the same insurance. The sectors of coverage comprise;
litigation insurance covering the total costs of litigation including
all attorneys fees, retainers, pretrial and trial fees; overhead
expense coverage, including the costs of continuing operation of
the policy holders business; and loss of income coverage, to make
up the difference between the policy holder's projected income,
and actual income after a claim is made on the insurance policy.
[0019] Each of the three sectors of the security policy consists
of an independent insurance instrument that can be purchased separately.
In the event that a policyholder is a private business owner or
sole proprietor, that policyholder might wish to enroll in all three
sectors. By contrast, a policy holder who is protected by a corporate
or limited liability company entity may only need coverage for litigation
and loss of income.
[0020] The principle sector comprising security insurance is the
litigation insurance coverage. Litigation insurance provides immediate
assistance to the policyholder in the event of criminal liability
by immediately providing bail, and at the same time assigning a
law firm to commence representation of the policyholder's interests.
This instrument provides complete financial support for the policy
holder for all legal expenses until the contractual policy amount
is reached, or the case is appealed or concluded. Moreover, the
litigation insurance sector provides an immediate waiver of a policyholder's
monthly premiums upon activation of coverage after the initial report
is made by the policyholder and a determination of incident validity
is made by the insurer.
[0021] The second sector comprising security insurance is overhead
expense coverage. Intended principally to support business owners
such as sole proprietors, overhead expense coverage operates similarly
to disability insurance, in that it covers the operating costs of
a business while the litigation is in process. This sector therefore
allows a professional to sustain ongoing business activities during
litigation.
[0022] Overhead expense coverage is based on prior business records,
and includes a twelve month review of the overhead expenses of the
professional's business. In the event that the security insurance
policy has been in effect for two or more years, an adjustment of
the coverage is made and the review period is reduced by six months
to the six months expenses prior to the incident. The overhead expense
coverage has a variable duration as determined by the policy. The
elimination period between the claim and payment is between 30 and
120 days, and the period of coverage extends up to twelve months
from the start of the action, and terminates at the end of litigation,
or at twelve months whichever is first.
[0023] The final sector of security insurance is loss of income
coverage. This sector is designed to compensate the policyholder
for individual income losses incurred as a result of litigation,
and is designed to prevent adverse financial impacts on the policyholder's
family as a result of the litigation. Under this sector, the calculation
of benefits is based on an individual or business owner's prior
two years of income tax statements, or in the alternative, the last
12 months of earning's statements. Individuals or business owners
with no prior evidence of earning statements due to a newly established
business must adhere to the fixed rate income provided by the insurance
company. This sector, along with the overhead expense coverage sector
is intended to operate similarly to disability insurance; however,
in the present invention, these sectors protect financial rather
than personal health.
[0024] In order to limit coverage to qualified individuals, the
present invention contemplates the following enrollment exclusion
criteria: A disclosing statement wherein a potential policyholder
must identify factors that affect the likelihood of a claim, and
specific exclusions for the actions of a policyholder that fall
outside a coverage area. The applicant for security litigation insurance
coverage must sign a disclosing statement indicating any participation,
membership or affiliation with any organization conducting known
illegal or prohibited activities. In addition, prior convictions
for violent felonies and treatment for psychiatric or mental illnesses
in the past two years must be disclosed. These disclosures represent
absolute exclusion criteria. Furthermore, if a policyholder knowingly
commits a felony, or any of a list of criminal acts prescribed by
the policy, that at the time of commission has been established
to be of a criminal nature, coverage will be denied. This determination
is made, after careful evaluation of the case, by the law firm retained
by the insurance company to represent the policyholder.
[0025] In addition to absolute exclusion criteria, the security-insurance
instrument requires disclosure of conditional exclusion criteria.
These disclosures will not automatically result in a denial of coverage,
but rather are decided on a case by case basis for each policyholder
by the insurer. Conditional exclusion disclosures required by security
insurance include; a criminal record of minor offenses, including
alcohol abuse or illegal drug use, or the improper use of any scheduled
substance during the two years prior to the application for coverage
as determined by medical records or drug testing; or a history of
driving while intoxicated, domestic violence, non-violent misdemeanors,
white collar crimes, etc. Conditional exclusion disclosures allow
an insuring organization to issue coverage for certain individuals
utilizing different premiums.
[0026] The following situations are exclusions to coverage for
existing policy holders of security insurance. If a policyholder
knowingly commits a felony, or any of a list of criminal acts prescribed
by the policy, that at the time of commission is known to be illegal,
coverage will be denied if the professional law firm, retained by
the insurance company finds reasonable grounds to establish knowledge
of the crime on the part of the policyholder. The standard applied
to determine the policyholder's knowledge is objective and the burden
of demonstrating a lack of knowledge is on the policyholder.
[0027] Discounts for security insurance are applied in the following
circumstances: For policyholders with no prior criminal records
or evidence of criminal activities, a discount will be applied to
the policy. In the event that a policyholder elects all three sectors
of coverage, the aggregate premium amount is lower than the total
individual premiums for each sector. Furthermore, it is the security
insurance of the present invention compensates policyholders such
that no taxes are incurred for payments for litigation, overhead
expenses, or loss of income coverage.
[0028] The insurer of security insurance policies confers an immediate
waiver of a policyholder's monthly premiums upon activation of coverage.
After the initial report of the incident is made by a policyholder
and confirmation of the nature and verification of the validity
of the policyholder's report is made by the insurer, an instantaneous
waiver is applied to the policyholder's coverage until termination
of the litigation, and/or final conclusion of the case.
[0029] The security insurance policy is non-cancelable by the insurer
as long as all policyholder criteria are met and verified at the
time a policy is executed. The security insurance policy is intended
for a wide range of customers as a supplement to other instruments
currently available in the insurance industry, such as professional
liability insurance, automobile insurance, life insurance, and travel
insurance, etc.
[0030] In order to execute the security insurance instrument of
the present invention, the insurer is notified by the policyholder
through a 24 hour hotline provided by the insurer and a claim is
made on the insured's policy. The policyholder or his appointed
representative calls a toll free number provided by the insurer
regarding the incident, and discloses the nature of the action.
[0031] The report acceptance department of the insurer confirms
the incident through the appropriate agency, for instance; the Department
of Justice, police department, highway patrol, sheriffs department
etc., and contacts a law firm from the approved list of participating
firms, according to the geographical area of the arrest and the
nature of the incident. The case is immediately assigned to an attorney
retained on an "on call" basis, and a bail bond provider
is retained and provided information about the policyholder and
law firm.
[0032] The claims manager for the insurer causes the attorney and
bail bond provider to meet with the policyholder to immediately
release the policyholder from custody. At the time of the meeting
the attorney provides the client with a complete explanation of
the charges and allegations against him. In the event the policyholder
chooses to retain a different attorney, he must notify the insurer
and law firm appointed by the insurer. In an instance where the
insured chooses to retain an attorney outside of the list provided
by the insurer's list of participating attorneys, the policy coverage
will differ according to a percentage determined by the insurer.
[0033] As the criminal litigation commences, the law firm engages
in the defense of the policy holder. As the litigation proceeds,
the insurer makes payments directly to the law firm according to
the firm's billing procedure. The security insurance instrument
continues in full force until the maximum contracted amount of the
policy is reached or the litigation ends. In the event of a conviction,
or unfavorable verdict, if the insurance proceeds are not exhausted,
they are then applied to the appeals process. If the client has
overhead expense and loss of income coverage as a part of the security
insurance instrument, the insurer requests the information regarding
the policyholder's income and expenses in order to commence payments.
[0034] All features disclosed in this specification, including
any accompanying claims, abstract, and drawings, may be replaced
by alternative features serving the same, equivalent or similar
purpose, unless expressly stated otherwise. Thus, unless expressly
stated otherwise, each feature disclosed is one example only of
a generic series of equivalent or similar features.
[0035] Any element in a claim that does not explicitly state "means
for" performing a specified function, or "step for"
performing a specific function, is not to be interpreted as a "means"
or "step" clause as specified in 35 U.S.C. .sctn. 112,
paragraph 6. In particular, the use of "step of" in the
claims herein is not intended to invoke the provisions of 35 U.S.C.
.sctn. 112, paragraph 6.
[0036] Although preferred embodiments of the present invention
have been shown and described, various modifications and substitutions
may be made thereto without departing from the spirit and scope
of the invention. Accordingly, it is to be understood that the present
invention has been described by way of illustration and not limitation. |