Related Practices
Shannon O'Malley to Present "The Great Doctrine of Prevention Debate" Webinar
May 29, 2025Shannon O'Malley, partner in Zelle's Dallas, TX, office, will present “The Great Doctrine of Prevention Debate” during a webinar for the Insurance Law Section of the State Bar of Texas, along with William T. Jones, Jr. (Green, Klein, Wood & Jones).
About the Webinar: Many first-party property insurance policies provide replacement cost coverage. But in order to receive full replacement cost, most policies require the insured to actually incur the costs to make repairs. Otherwise, the insurer is only required to pay the actual cash value of the property damage.
One wrinkle that may arise is when policies condition replacement cost coverage upon actual repair or replacement within a certain period of time. Therefore, if the parties dispute the scope of damage or cost of repairs, the insured may delay making the necessary repairs, even when the carrier promptly pays the undisputed actual cash value.
When carriers attempt to enforce the policy’s time requirements and limit recovery of the replacement cost depreciation, disputes and questions of fairness are raised. Policyholders may argue delay incentives the insurer – if the insurer’s initial payment is too low or delayed, the insured may argue that it could not complete the repairs and the insurer should not benefit from its own breach. On the other hand, insurers argue that insureds should promptly repair their damage, especially in the context of commercial properties when the actual cash value has been paid, because the policy is a contract between two commercial parties and should be enforced as written.
This is where the Doctrine of Prevention comes into play. Policyholder attorneys have raised this equitable doctrine to otherwise excuse certain policy requirements when seeking recoverable depreciation after a policy’s time limits expired. Carrier counsel, on the other hand, argue that a sophisticated insured should not be allowed to use equitable principles to side-step a contract’s terms and conditions.
The presentation will take place on Thursday, May 29, 2025 from 12:00 pm – 1:00 pm CT.
More information and registration can be found here.
