Articles Tagged with Long-tail claims

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What happens when you have a claim arising from circumstances that unfolded over many policy years—like environmental property damage or asbestos bodily injury claims? Which policies are triggered? How much coverage does each policy provide? Unsurprisingly, insurers and policyholders disagree on the answers. And courts across the country have been grappling with the issue for decades.iStock-529679660-all-sums-allocation-300x225

Some courts apply the “all sums” approach, which allows a policyholder to recover in full—subject to policy limits—from any insurer whose policy has been “triggered.” Other courts apply the “pro rata” approach, under which each triggered insurer must pay only a portion of the loss allocated to its policy periods. This is a closely watched issue among the insurance bar as it can dramatically impact the amount of a recovery depending on the contours of the policyholder’s insurance program.

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The universe of insurers still available to pay long-tail liability claims (e.g., asbestos, pollution, and other health hazards) is getting smaller every year. Significant domestic insurers like The Home, Midland and Mission declared bankruptcy years ago. Significant London Market companies continue to fade away, depriving policyholders with historic London Market policies of the opportunity to fully collect upon claims made and satisfied under those policies. Continue reading →