Fire Extinguisher Recall

More than 40 million fire extinguishers in the U.S. and Canada are being recalled because they might not work in an emergency.

The U.S. Consumer Product Safety Commission says on its website that it’s aware of one death because of a problem with extinguishers made by Kidde. In 2014, extinguishers didn’t work for emergency responders who were trying to fight a car fire after a crash. The agency reports there have been approximately 391 reports of failed or limited activation or nozzle detachment, including the fatality, approximately 16 injuries, including smoke inhalation and minor burns, and approximately 91 reports of property damage.

The recall covers 134 models of push-button and plastic-handle extinguishers made from 1973 through Aug. 15 of this year, including models that were previously recalled in March 2009 and February 2015. The extinguishers were sold in red, white and silver, and are either ABC- or BC-rated. The model number is printed on the fire extinguisher label. For units produced in 2007 and beyond, the date of manufacture is a 10-digit date code printed on the side of the cylinder, near the bottom. Digits five through nine represent the day and year of manufacture in DDDYY format. Date codes for recalled models manufactured from January 2, 2012 through August 15, 2017 are 00212 through 22717. For units produced before 2007, a date code is not printed on the fire extinguisher.

The government says the extinguishers can become clogged. Also, the nozzle can come off.

The extinguishers were sold by Menards, Montgomery Ward, Sears, The Home Depot, Walmart and other department, home and hardware stores nationwide, and online at, and other online retailers for between $12 and $50 and for about $200 for model XL 5MR. These fire extinguishers were also sold with commercial trucks, recreational vehicles, personal watercraft and boats.

Owners should contact Kidde to ask for a replacement and for instructions on how to return recalled models.

Kidde can be reached at (855) 271-0773 or at

This article is a repost from Claims Journal and can be found here.

Open Enrollment for Health Insurance

Open enrollment for Health Insurance in California is now through January 31st, 2018.

We encourage everyone to explore their options and find solutions that best fit their needs.

We are happy to provide you with assistance in your search for health care, so contact us at your earliest convenience.

Don’t wait until it’s too late! Call us today!

As Wildfires Raged, Insurers Sent in Private Firefighters to Protect their Client’s Homes

During the worst of last month’s wildfires in Northern California, Dick Fredericks got a phone call that passed on “some magical words”: His house was safe.

The message from a private firefighting service hired by his home insurer, Chubb Ltd. CB +0.39% , was accompanied by an email with some two dozen photos, including one of the service’s firefighters pumping water from Mr. Fredericks’s swimming pool to extinguish a brush fire on his Sonoma Valley property.

Increasingly, insurance carriers are finding wildfires, such as those in California, are an opportunity to provide protection beyond what most people get through publicly funded fire fighting. Some insurers say they typically get new customers when homeowners see the special treatment received by neighbors during big fires.

“The enrollment has taken off dramatically over the years as people have seen us save homes,” Paul Krump, a senior executive at Chubb, said of the insurer’s Wildfire Defense Services. “It’s absolutely growing leaps and bounds.”

The services are complimentary to policyholders in certain ZIP Codes or states that are prone to wildfires. Some insurers require policyholders to enroll in the programs in advance, to give permission for workers to access the property and to obtain contact information.

Chubb’s service, which began in 2008, is offered in 15 states. American International Group Inc. AIG +0.43% launched its Wildfire Protection Unit in 2005 in 14 California ZIP Codes. The unit has since expanded to 385 ZIP Codes in California, Colorado and Texas. Other insurers extending services include​Privilege Underwriters Reciprocal Exchange, or PURE, and USAA.

Tens of thousands of people benefit from the programs. For their overall insurance, policyholders can pay anywhere from thousands of dollars in annual premiums with these firms to more than $100,000, depending on the number and types of homes and other possessions they insure.

Consumer advocates lament that the programs mean the rich can get better fire protection, because the services mostly have been available at insurers of the well-to-do.

“Do we like the idea of a two-tier system for wealthy individuals and people with less means? No,” said Amy Bach, executive director of United Policyholders, a national insurance-focused consumer nonprofit based in California.

“But do we want to see their approaches work? Yes,” she added.

The private-sector activity calls to mind the early days of fire insurance in the U.S., in the 18th and 19th centuries before municipal fire services became common. Back then, metal-plaque “fire marks” were affixed to the front of insured buildings as a guide for insurers’ own fire brigades as to which fires to put out, said spokeswoman Loretta Worters of the Insurance Information Institute.

Scott McLean, a spokesman for the California Department of Forestry and Fire Protection, known as Cal Fire, said the state has procedures in place to coordinate with the private-sector crews. They are allowed to visit properties only after obtaining permission of an incident commander.

The insurers run “intelligence” or “command” centers from which they deploy these field forces.

“Our goal is to be out in front of a fire…before the fire is burning up the hillside,” said Stephen Poux, head of risk-management services and loss prevention at AIG.

The private crews seek to clear combustible items from a property: wood piles, outdoor furniture including cushions, weeds, straw floor mats and leaves in gutters. They may set up sprinklers with water available at the location, or with water they bring to the site, along with sprinkler lines and a generator to operate them.

Insurers sometimes spray a property’s perimeter with fire retardants, such as foams or gels. The may even spray the home itself, though they typically don’t take this step until a fire is closing in.

“The foam is short-lived, which is why we proactively work with members and take multiple precautions,” said Martin Hartley, chief operating officer of policyholder-owned insurer PURE.

The logistics are challenging, he said, because crews may not get access later if they have misjudged the fire’s speed.

Mr. Fredericks, the founding partner of Main Management Fund Advisors LLC in San Francisco and a former U.S. ambassador to Switzerland and Liechtenstein, said he began checking in with Chubb’s Wildfire Defense Services team as fire became a danger to the Sonoma area.

“The fire was so pervasive,” he said. “As a homeowner you want to try everything to save your home, and the first responders can’t be everywhere at once. The fact that Chubb supplemented an unbelievable effort by the first responders is probably what saved our home.”

By Leslie Scism Updated Nov. 5, 2017 1:49 p.m. ET

This article is a repost from The Wall Street Journal and can be found here.

Your Home is Probably Underinsured

  We see it time and time again. A brush fire destroys numerous homes yet people don’t have enough insurance to rebuild their homes. How is that possible? Doesn’t the insurance company make sure the coverage is adequate? Well, not exactly. In California, it’s the homeowners’ responsibility to ensure that they are carrying enough insurance to rebuild their home. Home replacement costs can vary a lot. The typical cost to rebuild a home after a fire can range considerably from $200 to $1200 per square foot, depending on finishes, construction type, etc. (those fancy heated toilets you installed are expensive!)

  The biggest risk is when homeowners are told not to worry because of “extended replacement cost.” Most carriers offer some “cushion” of 125% to 150% of additional coverage if it’s needed. There are two problems with relying on extended replacement cost. One, most policies have a “co-insurance” clause which penalizes you if you don’t carry enough insurance to rebuild the home. This means the insurance company can penalize you even on small losses for not insuring for the “full value” of replacing your home. For the second reason, look no further than Santa Rosa, CA. With 3,000 homes destroyed in one city, there is no doubt the cost of construction, labor, etc. will skyrocket. A scenario like Santa Rosa is exactly what extended replacement cost is for.

  So, what do you do? Well, if you are a contractor or work at Home Depot, you might have a good idea what the replacement cost is. But, assuming that’s not the case, it’s best to discuss with your insurance agent. By state law, your insurance agent must provide you with something called a “replacement cost estimate sheet”. This sheet is a computer program generated estimate of the cost to replace your home based on square footage, construction type, wall type, carpet type, etc. By taking a few minutes to complete this with your insurance agent you can ensure your home is insured for the right amount.

  If your policy is over 5 years old, it’s probably outdated and inadequate as materials costs and construction costs continue to outpace inflation. During this review process, you can also ask your agent if you are missing any “optional” coverages like water back-up, mold, earthquake, etc. Doing your homeowners insurance the right way might cost you a few dollars per month but it well worth the expense (and, I hear the Frappuccino’s at McDonald’s taste just like Starbucks).


California residents need protection against wild fires

Sonoma is on fire. Santa Rosa is on fire. Anaheim is on fire. And as sure as the sun rises tomorrow, one day your California town will be on fire. The best you can hope for is that you’re prepared to rebuild after it happens.

But after the fires are extinguished, thousands of Californians will learn that they are not prepared, because they do not have enough insurance to rebuild their homes. Worse, they may not receive much, if any, assistance from the federal government. FEMA coffers are being depleted from the rising number of annual declared disasters, and federal policy under the current administration seems to change by the day. There are no guarantees.

Insurance industry data reveals that for a score of reasons — inflation of the cost of work and supplies after a mass disaster, the rising cost of home construction, the difference between the cost of construction and the cost of buying an existing home — at least 80% of the homes in the United States have less than 80% of the coverage required to completely rebuild after a fire. Almost everyone assumes they have enough insurance, but evidently they don’t.

After the fires are extinguished, thousands of Californians will learn that they do not have enough insurance to rebuild their homes. How can that be? Buried in many California insurance policies is a clause that says the homeowner is the expert on the value of her own home, so if the amount of insurance purchased is not enough, it falls to the homeowner to pick up the difference. Our courts usually enforce that clause.

You may say, “My insurance provides 125% coverage of my home value, so I am comfortable that I have enough insurance.” Don’t take comfort in that policy. The percentage is pegged to the value of the home at the time of purchase, meaning it can sound like a lot more than it is in reality. Real estate values rise — sometimes quickly — and building costs rise after large-scale disasters due to simple supply-and-demand economics.

In the 2003 Cedar fire in San Diego, I had a neighbor who had such a clause and had bought her home and insurance just four months before the fire. Even she didn’t have enough insurance to rebuild, and had to pay a substantial sum out of her own pocket to replace what she lost.

California should change the laws that regulate fire insurance to ensure full replacement of a home lost in a wildfire. For example, California could mandate that every time an insurance company provides a quote for a new or renewed homeowner’s policy, it must also provide an option for uncapped, “guaranteed replacement coverage.” But that process, once started, will take years to move through our political system. Until those laws change, here’s what to do to ensure you have enough insurance.

Before you purchase or renew a home insurance policy, send an email to the insurance broker/agent that says: “I want enough insurance that if my home burns down in a wildfire, I have enough coverage to rebuild my home. Please tell me what amount of coverage I should have, and quote me the rate for that amount of coverage. Please respond by email rather than by telephone or in person. Thank you.”

When the broker/agent responds to that email, purchase the amount quoted immediately. Keep a record of the correspondence somewhere other than in your house — even documents in a fire safe are not “safe” in a fire. Repeat this exercise every single time that you renew your homeowner’s insurance.

Stay safe. Do what you can for our friends in Anaheim and Northern California — send them money, not your old clothes. One day you may need their help in return.

Kenneth S. Klein is a professor of law at California Western School of Law. He lost his own home to wildfire and has received awards for counseling hundreds of fire survivors.

This article is a repost from LA Times and can be found here.

Image provided by Google Maps

California Wild Fires

Active wildfires in California have burned an estimated 1,500 homes and commercial structures, scorched more than 115,000 acres and reportedly killed 15 people.

Insurers and others who access damage are only beginning to get “boots on the ground,” as the fires continue to rage.

According to a CoreLogic hazard risk analysis issued today, a total of 172,117 homes with a combined reconstruction cost value of more than $65 billion are at some level of risk from the wildfires in the Napa and Santa Rosa metropolitan areas alone.

The analysis is calculated based on homes within these two core based statistical areas and on five active fires: three in Napa (Patrick, Atlas and Tubbs) and two in Santa Rosa (Nuns and Pocket).

An analysis by modeler RMS also released today shows that there are roughly 15,000 structures in the overlap of the burn area and exposure in and around the Northern California fires.

“In addition to the burned structure damage, smoke may also be a major source of loss from this event,” said Kevin Van Leer, an RMS expert on wildfire. “RMS is monitoring the latest satellite imagery and local reports to understand the scope of burned structures and damaging smoke.”

Gov. Jerry Brown on Monday issued a state of emergency in Napa, Sonoma and Yuba Counties, and a state of emergency in Butte, Lake, Mendocino, Nevada and Orange counties.

According to Cal Fire, the winds that fanned the fires Sunday night and Monday morning have decreased significantly, but local winds and dry conditions continue to pose a challenge.

“With the decrease in the winds combined with cooler weather, firefighters made good progress overnight,” Cal Fire stated in a recent update.

Insurers are only now gaining access to some of the burn areas, said Nicole Ganley, a spokeswoman for the Association of California Insurance Companies, the California voice for the Property Casualty Insurers Association of America.

She said it was premature to offer any preliminary estimates on insured losses.

“Insurers are moving into the area and are ready to help policyholders,” Ganley said. “It’s really soon. There’s still active firefighting.”

With plenty of personal and commercial losses to go around, the toll is likely to be a big one.

“Unfortunately, this looks like it’s going to be a larger scale disaster,” she said.

Several of the wineries that heavily dot the area were affected.

The San Jose Mercury News is reporting that two Redwood Valley wineries were destroyed by the fires — Frey Winery and Oster Wine Cellars – and White Rock Vineyards, one of Napa’s oldest wineries, confirmed it lost its family-owned winery in the fire.

Larry Chasin, CEO of Pak Programs, which designs and administers customized insurance programs for wineries and vineyards, breweries, wine and liquor retailers and others, said he’s been fielding calls from insureds reporting significant losses at their wineries from the fires.

“We’re getting calls from clients who are putting in claims for loss,” Chasin said.

He said most of the reported losses so far are structures.

“It’s a lot of structures,” he said. “When you think of a large winery, it could be a city unto itself, with a tasting room a, wine cave, a barn, primary dwellings and guest houses as well.”

With firefighting crews focused on saving lives and evacuations, in some instances commercial properties have had to wait in the cue for assistance, he added.

“We had an insured who was actually fighting a fire himself all day and he was calling and attempting to get a fire truck up there, which he was unable to do, and he finally lost the fight and watched the winery go up in flames,” Chasin said.

Beside heat damage to trellises and vines, he said he expects to also see ample reported equipment losses, such as from water storage tanks, vineyard pump stations, potable water systems, piping, irrigation equipment, and waste water treatment systems.

He said he and his team are “ready to get boots on the ground” to go in and help property owners assess damages.

“I think that what we’re seeing is that a lot of commercial property owners are just being granted access to these properties,” he said. “The claims are just beginning to roll in right now.”

He added, “The speed, power and intensity of this is just tough to imagine.”

The Insurance Industry Charitable Foundation is collecting donations to help support people affected by wildfires raging across the state. IICF has created the IICF California Wildfire Relief Fund.

Those who wish to make a donation to the fund can visit this website.

This article is a repost from Insurance Journal and can be found here.

Drones – The New Standard for Insurance Adjusters

Insurance adjusters are bringing more drones with them than ever before as they head to Texas to assess the damage from Harvey.

Companies are using the drones on a much larger scale to record images, save time and spare human adjusters from venturing into potentially unsafe areas. Insurers have increased their fleets since the Federal Aviation Administration eased some restrictions a year ago, and tried them out in areas of the southeastern U.S. hit by Hurricane Matthew last October.

Travelers Insurance, based in Hartford, had 65 certified drone pilots as of Friday among the 600 employees deployed to the Houston area. Claims specialist Laura Shell, who will be in Texas this week, spent last week at the company’s training center in Windsor, Connecticut, learning how to pilot drones.

“This is great,” said Shell, 55, of Lexington, Virginia, whose job typically has involves climbing a lot of ladders. “It’s going to allow me to get a look into areas that aren’t easily accessible and onto roofs and do it quickly.”

The drones will dramatically cut the time it takes to assess damage, according to Jim Wucherpfennig, vice president of claims for Travelers. The company has trained 300 employees as certified drone operators and expects to have about 600 by early 2018, he said.

Instead of making two or three trips to a house, often with an outside contractor trained in setting up scaffolds and ladders, the adjusters will now be able to do detailed exterior inspections in one trip. The drone’s camera is linked to an application on the employee’s phone, allowing them to take measurements and shoot high-definition photos and videos, often while the customer looks on.

The drones do have limitations. They cannot fly in heavy wind or rain, and they cannot go inside homes to inspect damage.

That’s one reason State Farm has decided, for now, not to use its drone fleet in Houston, spokesman Chris Pilcic said.

“With the damages caused by Hurricane Harvey, our claims adjusters will likely need to inspect both the interior and exterior of the home to assess coverage and damages,” he said. “For this situation, we find that the best way to service our customers and evaluate coverage and damages is through on-the-ground claims handling.”

Most major insurers now have a fleet of drones, and the technology has become so inexpensive that even smaller companies are beginning to use it, according to Jim Whittle, chief claims counsel for the American Insurance Association. He said the benefits were evident in the response to Hurricane Matthew.

“If you had a good line of sight, for example, but you were stopped by nature or law enforcement from entering an area, you could put a drone in the area and get access to that property,” he said. “That could demonstrate immediately that that was a property that had considerable wind damage, let’s say, and allow the insurer to cut a check.”

Allstate has contracted with a third-party drone operator to do hundreds of inspections a day in the Houston area, spokesman Justin Herndon said. The company also is using fixed-winged aircraft, equipped with artificial intelligence technology, to assess damage to the entire region, comparing images from before and after the storm, he said.

“This is the widest-scale use of drones that we’ve ever been a part of to date,” he said.

People will use the information from the drones and planes to help make their estimates, Herndon said, but the technology won’t take the place of adjusters. Wucherpfennig concurred, saying Travelers claims specialists will almost always do an on-the-ground inspection to get a final written estimate. But, he said, the drones give them a head start.

“It’s all about getting the customer back on their feet more quickly, paying them more quickly so they can get their damages repaired as quickly as possible.”

This article has been reposted from Claims Journal and can be found here.

Will The National Flood Insurance Program continue?

In the aftermath of Hurricane Harvey, coastal areas in Texas and Louisiana are still dealing with the damage and devastation caused by the massive amounts of water. Now, with Hurricane Irma in a path of destruction, it has become the strongest on record with winds exceeding 185mph. Florida is preparing for the storm to make landfall in a few days and has called for emergency evacuations in the vulnerable areas. Other coastal areas in the gulf and east coast are also carefully monitoring the storm’s path.

Wind and flood damage are some of the biggest concerns facing homeowners and business owners. Flood insurance is a separate policy and most homes have purchased flood protection with The National Flood Insurance Program (NFIP). The NFIP is administered by The Federal Emergency Management Agency (FEMA) and is deeply in debt to the US treasury. It has not recovered from prior storms such as Katrina (2005) and Sandy (2012). The NFIP insures most policies that are held in the US and is set to expire at the end of September. Not only is the agency set to expire, they are nearing their borrowing maximum of $30 billion.

Risk appraisers are seeking renewal and reform of this government insurance as premiums are too low to cover the massive amounts of claims. This is where it becomes encouraged to seek private flood insurance so that a home or business has proper protection in the event of flooding.

At the moment, renewal is under review. However, with the massive amounts of debt the program has, it is uncertain what the future holds for the NFIP. Harvey and Irma may be the final test of the program and see whether it continues or dissolves.


Hurricane Harvey’s Impact

Hurricane Harvey’s second act across southern Texas is turning into an economic catastrophe — with damages likely to stretch into tens of billions of dollars and an unusually large share of victims lacking adequate insurance, according to early estimates.

Harvey’s cost could mount to $30 billion when including the impact of relentless flooding on the labor force, power grid, transportation and other elements that support the region’s energy sector, Chuck Watson, a disaster modeler with Enki Research, said in an email Monday. That would place it among the top eight hurricanes to ever strike the U.S.

Less than a third of Harvey’s losses are likely to be insured, Watson said.

“A historic event is currently unfolding in Texas,” Aon Plc wrote in an alert to clients. “It will take weeks until the full scope and magnitude of the damage is realized,” and already it’s clear that “an abnormally high portion of economic damage caused by flooding will not be covered,” the insurance broker said.

Many forecasters were hesitant over the weekend to make preliminary estimates for how much insurers might pay. Researchers were shifting from examining Harvey’s landfall Friday as a roof-lifting category 4 hurricane to the havoc it later created inland as a tropical storm. Typical insurance policies cover wind but not flooding, which often proves costlier. Blaming one or the other takes time.

In the Houston area, rainfall already has surpassed that of tropical storm Allison in 2001, which wreaked roughly $12 billion of damage in current dollars. In that case, only about $5 billion was covered by insurance, according to Aon.

Those storms are dwarfed by Hurricane Katrina, which struck in 2005 and devastated New Orleans. By some estimates, it inflicted $160 billion in total economic damage. About 47 percent of Katrina losses were covered by the insurance industry, but only about 27 percent is expected to be insured for Harvey, Watson said.

Most people with flood insurance buy policies backed by the federal government’s National Flood Insurance Program. As of April, less than one-sixth of homes in Houston’s Harris County had federal coverage, according to Aon. That would leave more than 1 million homes unprotected in the county. Coverage rates are similar in neighboring areas. Many cars also will be totaled.

“A lot of these people are going to be in very serious financial situations,” said Loretta Worters, a spokeswoman for the Insurance Information Institute. “Most people who are living in these areas do not have flood insurance. They may be able to collect some grants from the government, but there are not a lot, usually they’re very limited. There are no-interest to low-interest loans, but you have to pay them back.”<br><br>

The federal program itself is already struggling with $25 billion of debt. The existing program is set to expire on Sept. 30 and is up for review in Congress, which ends its recess Sept. 5.

Investors Brace

Costs still will likely soar for insurance companies and their reinsurers, biting into earnings. As Harvey bore down on the coastline Friday, William Blair & Co., a securities firm that tracks the industry, said the storm could theoretically inflict $25 billion of insured losses if it landed as a “large category 3 hurricane.”

Policyholder-owned State Farm Mutual Automobile Insurance Co. has the largest share in the market for home coverage in Texas, followed by Allstate Corp., which is publicly traded. William Blair estimated that, in that scenario, Allstate could incur $500 million of pretax catastrophe losses, shaving 89 cents off of earnings per share.

Investors began bracing for losses last week. But many didn’t believe that Harvey could wipe out bonds that were issued to protect insurers against storm damage in the region, according to Brett Houghton, a managing principal at Fermat Capital Management. His firm manages more than $5 billion, with allocations to catastrophe bonds.

The Swiss Re Cat Bond Price Return Index dropped 0.44 percent in the week ended Aug. 25, the steepest decline since January. The benchmark is recalculated every Friday, so it’s unclear how the debt performed as the storm continued through Sunday. Reinsurers, which provide a backstop for primary carriers, also may get burned. That group include Bermuda-based companies Arch Capital Group Ltd., Axis Capital Holdings Ltd. and RenaissanceRe Holdings Ltd., according to a note last week from Meyer Shields, an analyst at Keefe, Bruyette & Woods.

Interrupting Business

Businesses are probably better covered than individuals. Companies across the retailing, manufacturing, health-care and hospitality industries will be seeking reimbursements from insurers for lost revenue during the storm and subsequent repairs, said Aon’s Jill Dalton, who helps manage claims.

But for Texas’s massive energy industry, it’s still too early to project how badly the storm will disrupt supply and distribution. That’s because the devastation keeps spreading.

“If it continues to rain, I just don’t think the situation is going to get better any time soon,” said Rick Miller, who leads Aon’s U.S. property practice. “In fact, it could get a lot worse.”

This article is reposted from Carrier Management written on August 28, 2017 by Sonali Basak. Read the original article here.

Tiffany Wins $19.4 Million in Fake Ring Damages from Costco

A federal judge on Monday said Tiffany & Co. may recover at least $19.4 million in damages from Costco Wholesale Corp. over the warehouse club chain’s illegal sale of counterfeit diamond engagement rings bearing the “Tiffany” name.

U.S. District Judge Laura Taylor Swain said Tiffany deserves $11.1 million, plus interest, representing triple the lost profit from Costco’s trademark infringement, plus the $8.25 million in punitive damages awarded by a jury last October.

The Manhattan judge also permanently barred Costco from selling anything that Tiffany did not make as “Tiffany” products, unless it uses modifiers suggesting that the products have, for example, a Tiffany “setting,” “set” or “style.”

Costco said it intends to appeal, calling the decision “a product of multiple errors” by Swain.

“This was not a case about counterfeiting in the common understanding of that word — Costco was not selling imitation Tiffany & Co rings,” Costco said. Tiffany had sued Costco on Valentine’s Day in 2013.

While the case concerned only about 2,500 rings, Tiffany sued to protect its brand and cachet as one of the world’s best-known luxury retailers. Tiffany last month named industry veteran Alessandro Bogliolo as its new chief executive to help arrest declines in same-store sales as millennials spend elsewhere on accessories. Costco had argued that “Tiffany” had become a generic term, excusing its use on a standalone basis.

But the judge found Costco’s defenses “not credible,” given evidence that displays of fine jewelry were a key part of the Issaquah, Washington-based company’s marketing strategy. Salespeople “described such rings as ‘Tiffany’ rings in response to customer inquiries, and were not perturbed when customers who then realized that the rings were not actually manufactured by Tiffany expressed anger or upset,” Swain wrote.

Costco’s upper management, meanwhile, “displayed at best a cavalier attitude toward Costco’s use of the Tiffany name in conjunction with ring sales and marketing,” the judge added. The jury had awarded Tiffany $5.5 million rather than $3.7 million for lost profit. Swain found the lower sum sufficient.

Leigh Harlan, Tiffany’s general counsel, in a statement said the decision “sends a clear and powerful message” to anyone seeking to infringe the New York-based company’s trademark. “We brought this case because we felt a responsibility to protect the value of our customers’ purchases and to ensure that Costco’s customers were not misled,” she said. The case is Tiffany and Co. et al v. Costco Wholesale Corp., U.S. District Court, Southern District of New York, No. 13-01041.

Reporting by Jonathan Stempel in New York; Editing by Steve Orlofsky and Dan Grebler

This article is reposted from Insurance Journal. Read the original article here.

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