Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies

Note 12. Commitments and Contingencies

Future minimum annual rental commitments as of December 31, 2012 under various non-cancellable operating leases for our office facilities, which expire at various dates through 2020, are as follows:

	Year Ended
In thousands	December 31,
2013	$	9,548
2014		8,035
2015		7,915
2016		6,162
2017		4,576
Thereafter		4,233
Total minimum operating lease payments	$	40,469

We are also liable for additional payments to the landlords for certain annual cost increases. Rent expense for the years ended December 31, 2012, 2011 and 2010 was $10.5 million, $10.4 million and $9.3 million, respectively.

In the ordinary course of conducting business, the Company’s subsidiaries are involved in various legal proceedings, either indirectly as insurers for parties or directly as defendants. Most of these proceedings consist of claims litigation involving the Company’s subsidiaries as either (a) liability insurers defending or providing indemnity for third party claims brought against insureds or (b) insurers defending first party coverage claims brought against them. The Company accounts for such activity through the establishment of unpaid loss and loss adjustment reserves. The Company’s management believes that the ultimate liability, if any, with respect to such ordinary-course claims litigation, after consideration of provisions made for potential losses and cost of defense, will not be material to the Company’s consolidated financial condition, results of operations, or cash flows.

The Company’s subsidiaries are also from time to time involved with other legal actions, some of which assert claims for substantial amounts. These actions include claims asserting extra contractual obligations, such as claims involving allegations of bad faith in the handling of claims or the underwriting of policies. In general, the Company believes it has valid defenses to these cases. The Company’s management expects that the ultimate liability, if any, with respect to future extra-contractual matters will not be material to its consolidated financial position. Nonetheless, given the large or indeterminate amounts sought in certain of these matters, and the inherent unpredictability of litigation, an adverse outcome in such matters could, from time to time, have a material adverse outcome on the Company’s consolidated results of operations or cash flows in a particular fiscal quarter or year.