Reinsurers Not Liable for Defense Costs Exceeding Policy Limits
Two reinsurers that shared part of the risk on a $25 million umbrella policy issued to a New York manufacturer nearly five decades ago are not liable for defense costs in addition to the policy limits, the 2nd Circuit Court of Appeals ruled Thursday.
What’s more, one of the reinsurers is entitled to a new trial to settle the question of whether it is a valid successor to the insurance contract, the appellate panel ruled.
The decision affirmed a ruling by U.S. District Brenda K. Sannes and reversed a jury decision and jury instructions issued by U.S. District Judge David N. Hurd.
Unclear Policy Endorsement Makes Excess Insurer Liable for Fuel Spill By Claims Journal staff | December 21, 2020
Confusing language in a policy issued by an excess insurer puts the carrier on the hook for up to $5 million in clean-up costs after a policyholders’ tanker truck overturned and spilled its load of fuel, the 1st Circuit Court of Appeals ruled Friday.
The appellate panel reversed a decision by the U.S. District Court in Worcester to dismiss a lawsuit filed against General Star Indemnity Co. and ordered judgment in the policyholder’s favor. The 8th Circuit said a special hazards endorsement in the policy could be interpreted to bar coverage, or to guarantee certain kinds of coverage, depending on how it is read.