Friday, November 01, 2013

Loss of trust

Is this how things unravel? Karen Gullo at Bloomberg Businessweek reports:

Intuitive Surgical Inc. (ISRG:US), the maker of robotic-surgery devices targeted by patient lawsuits, was sued by an insurer alleging the company hid the number of legal claims it might face when buying product-liability insurance.

Illinois Union Insurance Co. (UNION) seeks to rescind an Intuitive insurance policy, saying the maker of the $1.5 million da Vinci robot system concealed material facts about its legal risks.

The insurer said it was told Intuitive was confronting 25 claims during the policy application process earlier this year. Intuitive didn’t disclose that it had entered agreements with plaintiffs’ lawyers to suspend deadlines for additional legal claims over the da Vinci system, according to an Oct. 21 complaint filed in federal court in San Jose, California.

“Had plaintiff been informed of the tolling agreements and the increasing number of claimants during the application process, plaintiff would not have proceeded with the application process and would have withdrawn any quote for the policy,” Illinois Union said in the complaint

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