Insurance Law Monthly
Product Liability Insurance - Construction of product liability cover
(John Wyeth and Brother Ltd v Cigna Insurance Co of Europe SA/NV)
The decision of Mr Justice Langley in
John Wyeth and Brother Ltd v Cigna Insurance Co of Europe SA/NV
, 2000, unreported, forthcoming in [2001] Lloyd’s Rep IR, raised a number of difficult questions on the interpretation of
the wording of product liability excess of loss policies, in particular the effect of “buy-out” clauses in the primary layer
insurance, and the meaning of “Maintenance” and “Efficiency” clauses in the excess layer cover. An issue also arose as to
the apportionment of defence costs between insurers on risk in different years. The case was determined in accordance with
New York law, but as the questions were primarily of construction, and as New York principles of construction are not significantly
different from those applied in the English courts, the case is of some significance for UK product liability policies.