LLR: Insurance & Reinsurance

Directors’ and officers’ (D & O) insurance - Misrepresentation - Materiality - New York - Whether policy provisions excluded coverage - Whether D & O insurance sufficiently similar to either marine insurance or reinsurance to warrant application of uberrimae fidei rule - Whether applications for D&O renewal and excess insurance required disclosure of SEC “informal” inquiry - Materiality of SEC inquiry to underwriting decisions - Whether policy provisions excluded “claims” - Meaning of “claim” - Whether claims were “first made” during renewal policy period.

Comprehensive general liability - Environmental liability - US CERCLA - Insured named as PRP by Environmental Protection Agency - Repeated dumping of hazardous waste by insured over many years contaminating two sites - Whether two “occurrences” took place - Whether Non-Cumulation, Deemer and One-Year Reporting clauses limited or precluded insureds recovery - Whether remedial investigation/feasibility study (RI/FS) costs were covered as defense costs.

Liability insurance - United States - Reimbursement of legal fees - “voluntary payments” clause in commercial general liability policy - Insured threatened with trademark infringement suit - Insured commencing pre-emptive action for declaration - Whether insured prohibited from incurring any expense without explicit prior approval of insurer - Whether clause must be construed according to reasonable expectations of insured - Whether insurer could distinguish between costs incurred by insured in defending against counterclaims and costs incurred in prosecuting insureds affirmative claims for declaratory relief - Whether policy covered fees and costs incurred by insured in processing its Lanham Act claim seeking money damages that were separate and distinct from trademark infringement claims.

Jurisdiction - Reinsurance dispute - English proceedings brought by London reinsurers claiming declaration that they were entitled to avoid reinsurances on grounds of misrepresentation - Swedish reinsureds application to set aside - Whether reinsurers action concerned a matter “relating to a contract” - Whether duty to make fair presentation was an obligation under Lugano Convention art 5(1) - Whether place for performance was place where reinsurance contract was negotiated.

United States - Jewellers insurance - Exclusion clause - Unattended vehicle - Theft while salesman purchasing gasoline - Whether exclusion clause ambiguous and or unconscionable under Texas law.

Lloyd’s underwriters were entitled to summary judgment on insureds claim under jewellers policy where exclusion clause excluding loss from unattended vehicles was held by Texas court to be unambiguous and not established as unconscionable.

New York - Regulation - Security - Unlicensed alien reinsurer - Bermudan reinsurer receiving premiums from New York insurer in exchange for providing reinsurance coverage - Whether reinsurer obliged to post security for risks that it had been paid to underwrite - Reinsurers answer to liquidators claim ordered to be stricken unless it posted pre-answer security - New York Insurance Law section 1213(c) - Whether procedural due process guarantees of Federal Constitution violated.

United States - Jewellers block policy Unattended vehicle exclusion - Not applicable to property in custody of “carrier” - - Independent salesman not “in or upon vehicle” - Whether a “carrier”.

Reinsurance - United States - Toxic waste litigation - Summary judgment obtained by reinsured against reinsurers, underwriters at Lloyd’s - Whether district court correctly determined (1) that reinsurers failed to raise genuine issue of material fact as to existence or terms of reinsurance certificate; (2) that there was no genuine dispute over whether certificate was in effect in 1964 - Whether underwriters had raised genuine issue of material fact whether there existed a custom or usage to “follow the settlements” at time certificates were made - Whether district court correctly found that underwriters delay constituted a waiver of any late notice defense they might have had.

United States - Liability insurance - Lead paint suits - Duty to defend - Contribution for defence costs between liability insurers where insurers cover different risks - Whether excess “other insurance” clause relieved insurer from duty to defend where other insurer was liable for defense costs under policies covering different periods - Whether insured obliged to contribute towards its own defence costs where it was self insured for certain periods.

Negligence - Duty of care - Asbestos - Factory owners duty - When arising.

Lloyd’s litigation - Interim payment - Calls on Lloyd’s Names - Claims not paid - Syndicate members recovering judgment against members agents and managing agents in respect of avoidance of run-off reinsurance for non-disclosure - Application for interim payment - Judge accepting that it was reasonable to proceed upon assumption that eventual loss of syndicate would be as shown in accounts - Judges ruling that interim award should be limited to compensation in respect of paid claims - Appeal by Names - Need for uniform approach.

Subrogation - Marine insurance (cargo) - Contamination of cargo of naphtha - Deed of assignment - Third party tortfeasor agreeing to pay insured cargo-owners claim in consideration of third party being granted unconditional release from claims by cargoowner as well as assignment of, inter alia, insureds rights under insurance policy - Claim by assignee against insurer refused - Whether third party intended to benefit insured to exclusion of insurer - Bearer certificate issued under floating policy - Certificate in wide terms - Whether third party had established that it was such a person as those who effected the policy had in contemplation.

Insolvency - Reinsurance - Request for assistance - Considerations for court - Reinsurance treaties issued by German reinsurer through London brokers covering reinsured mutual Massachusetts insurer - Provisional liquidators appointed in liquidation of reinsured in Bermuda - Reinsured seeking to restrain reinsurer from proceeding against reinsured under arbitration clause in treaties - Letter of request from Supreme Court of Bermuda seeking assistance from English court - Appeal against order declining to continue injunctive relief in respect of “any and all jurisdictions” - Construction of Insolvency Act 1986 - Meaning of “insolvency law” - Ability of English court to assist courts of other parts of United Kingdom or of “relevant countries or territories” - Nature and extent of obligation imposed on court.

Costs - Non-party - Legal expenses insurance - Unsuccessful plaintiff bringing action through legal expenses insurance policy - Limit of indemnity reached under policy - Application by successful defendant for costs against insurers - Whether legal expense insurance in public interest - Whether order under Supreme Court Act 1981 sect 51 that non-party pay costs should only be justified when exceptional circumstances made such an order reasonable and just - Whether existence of legal expenses insurance with limit of cover that had been exhausted made it reasonable or just to order insurer to pay costs of adverse successful party.

Conflict of laws - Contract - Proper law - Policies issued on behalf of US insurer in England by English underwriting agency to UK business enterprise of French multinational company - Policies part of worldwide scheme but concerned entirely and expressly with reference to that UK business - Whether contract or worldwide scheme must be shown to be more closely connected with law governing contract - Whether fact that multinational might dictate precise terms of local supply contracts meant that such contracts were governed by law of headquarters of that multinational - Whether presumption in favour of English law rebutted.

Policy - Construction - Exclusion - “explosion” - Violent rupture of pulp digester - Whether an “explosion” - Whether policy ambiguous - Whether lack of definition of “explosion” compelled conclusion that term was ambiguous - Whether term “explosion” as used in policy included occurrence involving sudden and violent release of expanding pressure - Whether explosion exclusion exceptions in policy was ambiguous and would be construed to except digester from explosion exclusion.

Excess of loss - Policy - Construction - Honourable engagements clause - Aggregation - Excess of loss contract incorporating honourable engagements clause - Approach to construction - Whether arbitrators erred in ruling that reinsured was entitled to aggregate claims arising from more than one policy or contract issued to different insureds or reinsureds and thus present what would otherwise be large number of individual claims as one aggregated claim with only one retention under terms of each reinsurance contract - Meaning of “one occurrence, claim made, loss discovered, or in the aggregate where applicable” - Whether reinsured precluded under contract from presenting claims to reinsurer on different basis from that on which it settled with its cedants.

Liability policy - Construction - Lead paint claim - Insurers duty to defend - Coverage denied by insurer - Pollution exclusion clause - Extent of insurers duty to defend under general liability policy - Whether allegations in underlying complaint suggested reasonable possibility of coverage - Whether policy could reasonably be read to cover lead paint poisoning claims - Whether pollution exclusion clause was ambiguous and triggered insurers duty to defend.

Liability insurance - United States - Exclusion clause - “Buy back” clause - Personal injuries to employee at chemical plant - Accident victims injuries arose from noxious gas leaking from pipe - Whether injuries excluded under absolute pollution exclusion clause - Whether “buy-back” clause was ambiguous, and insured had failed to establish four events which constituted conditions precedent to reinstating of insurance coverage where coverage had been previously taken away by absolute pollution exclusion clause.

Broker - Authority - Winding up of reinsured - Refusal by provisional liquidator to pay excess of loss reinsurance premiums - Operation of London market settlement procedures automatically debiting brokers account in respect of premiums due under contracts - Reinsurers persuaded by broker to cancel contracts and reverse entry of premiums - Scope of brokers authority - Whether appointment of provisional liquidator automatically revoked authority of broker - Whether payments made by broker to reinsurers by way of settlement in account through London market systems were payments of premium made with authority of reinsured - Whether market rules rendered broker personally liable for premium, either in conjunction with, or in place of, reinsured - Whether, if payment was made purportedly on behalf of reinsured, it was open to broker and reinsurers to rescind it at any time before it was ratified by reinsured - Whether cancellation of reinsurance contracts justified where reinsured repudiated contracts by evincing intention not to pay premium - Whether reinsured could claim to recover premium either from

Marine insurance - Unseaworthiness - Utmost good faith - Fire on vessel resulting in constructive total loss - Allegation by underwriters of breach of duty of utmost good faith - Judgment for assured on partial loss basis - Whether duty of utmost good faith ended with institution of proceedings - Whether witness statements by assured were untrue - Vessel unseaworthy due to lack of competence of master to deal with fire - Whether assured was privy to aspects of unseaworthiness.

Costs - Non-party - P&I Club - Judgment obtained by shipowner against demise charterer - Shipowner bringing action for costs against charterers P&I club - Whether judge correctly ruled that order under Supreme Court Act 1981 sect 51 that non-party pay costs should not be made - Whether club had contractual obligation to indemnify charterer in respect of charterers liability to shipowner - Whether, in supporting charterers claim of fraud, but denying any liability for shipowners costs, club was unlawfully maintaining litigation and should not be permitted to evade liability - Whether non-party who funded unsuccessful litigation should, as matter of general principle, be liable to pay costs of successful party.

Insurance regulation - Authorisation - Offshore companies - Acting through brokers in United Kingdom - Scope and purpose of Insurance Companies Act 1982 sect 2(1) - Whether offshore companies and United Kingdom companies were “carrying on any insurance business in United Kingdom” - Whether judge erred in excluding from consideration activities which he did not regard as being evidence of brokers acting on behalf of UK companies - Whether sect 74(2) and regulations made thereunder only applied to intermediaries - Whether just and equitable to make winding up order.

Foreign judgment - Enforcement - Bermuda - New York judgment obtained by liquidator of New York reinsured against Bermuda reinsurer - Liquidators application to enforce judgment in Bermuda - Whether judgment should not be enforced because (1) it was obtained in contravention of orders of Bermuda court; (2) New York proceedings leading up to judgment were opposed to natural justice, and/or offended principles of substantial justice.

Lloyd’s - Contract - Equitas - Rescission of contracts for fraudulent misrepresentation - Set-off as between principal debtor and assignee of chose in action - Lloyd’s underwriters sued by Lloyd’s as assignee of Equitas for recovery of premium payments - Whether underwriters entitled to rescind contracts of membership with Lloyd’s - Whether underwriters precluded from setting off counterclaim for damages for alleged fraud against Lloyd’s - Whether underwriters entitled to stay of execution of judgment against them for Equitas premium.

Conflict of laws - New York - International reinsurance dispute - Action in New York by US reinsured against Romanian reinsurer - Cross-motion for summary judgment by reinsurer - Whether judgment of Bucharest court, which allegedly rendered retrocession agreement void, entitled to recognition and enforcement by New York court - Whether reinsurer lacked capacity to be sued in New York court.

Excess insurance - Trigger - Maritime employers coverage - Construction of maritime coverage endorsement - Whether excess policy clearly stated that excess insurers liability attached only after primary insurers had paid or had been held liable to pay $25,000 - Maritime coverage endorsements limitation of liability for damages arising from bodily injury to master or member of crew of vessel.

Arbitration - Award - Remand for clarification - Petition for entry of judgment upon arbitration award by agent and reinsurer - Motion to remand award for clarification filed by insurer - Whether court had power to remand award for clarification - Whether agent entitled to interest on awards - Applicability of limitation periods in arbitration statutes - Whether insurer, by accepting some benefits of award, had waived all rights to clarification of award.

Insurable interest - Marine insurance - Unseaworthiness - Motor cruiser beached following engine failure - Engine failure caused by bursting of hose in cooling system - Purchase price of vessel provided by owner and finance company which hired vessel to owners company - Whether owner, his company and/or finance company had insurable interest in vessel - Whether insurers had established that vessel was in control, when claim arose, of person who was unlicensed - Whether vessel unseaworthy when voyage commenced - Whether claim caused by or arose out of unseaworthiness or lack of repair of vessel - Whether plaintiffs claim was caused by lack of reasonable care or diligence in safeguard or maintenance of vessel - Whether statutory regulations a “requirement”.

Policy - Construction - Personal accident insurance policy - Payment of £10,000 for “permanent total disablement from attending to any occupation” - Whether policyholder covered if he were permanently totally disabled from following any occupation of whatever kind that he might happen to have been following at date of accident - Whether phrase ambiguous and contra proferentem rule applied.

Policy - Construction - Medical insurance by finance company - Meaning of “similar gainful occupation” - Whether judge entitled to find that (1) plaintiffs disability prevented him from performing any work for which he was qualified; (2) plaintiff who had had back problems was not suffering from any physical infirmity and was not physically weak or infirm; (3) it was not proved that background of lumbar pain and discomfort would materially have affected granting of insurance.

Lloyd’s - Reconstruction & Renewal Plan (R&R) - Contract - Equitas - Rescission of contracts for fraudulent misrepresentation - Set-off as between principal debtor and assignee of chose in action - Lloyd’s underwriters sued by Lloyd’s as assignee of Equitas for recovery of premium payments - Whether underwriters entitled to rescind contracts of membership with Lloyd’s - Whether underwriters precluded from setting off counterclaim for damages for alleged fraud against Lloyd’s - Whether underwriters entitled to stay of execution of judgment against them for Equitas premium.

Exclusion clause - Construction - Disability insurance - Whether disability, which was said to give rise to claim, was caused by condition for which insured had received advice during previous twelve months - Condition described in doctors referral letter in fact condition of angina - Whether trial judge entitled to find that insured did not receive advice, treatment or counselling for angina.

Salvage - Award Quantum - Pollution - International Salvage Convention, 1989 art 14 - Salvors claim under art 14(3) - Whether limited to expenses which he had incurred - Whether concept of salvage remuneration or reward should be rejected - Meaning of “fair rate” - Whether special compensation payable for duration of salvage operations once vessel or its cargo threatened damage to environment.

Jurisdiction - Reinsurance contract - English jurisdiction clause - Claims in New South Wales court for declarations that reinsurance properly avoided - Claims in English courts for declarations that reinsurances were valid and enforceable - Whether contracts included clauses by which parties agreed to exclusive jurisdiction of English courts - Whether as a matter of construction contracts provided for exclusive jurisdiction of English courts.

Negligence - Duty of care - Scotland - Building contract - Fire caused by alleged negligence of sub-contractors - Sub-contractors aware that employers had undertaken to insure against risk of negligence on part of sub-contractors - Whether sub-contractors entitled to assume not merely that they need not insure but that they were not under any duty of care to employers with regard to any loss or damage caused by their actings - Whether Lord Ordinary erred in law.

General liability - Exclusion - Workmens compensation - United States - Texas - Employees of insured pipe line valve company purportedly transferred to another employer and leased back to insured - Employee injured while working for insured - Insured acknowledged as employer in key day-to-day functioning of insureds business - Whether arrangement to promote second employer as employees employer to exclusion of insured no more than a sham - Whether employee a dual employee or borrowed servant - Whether Employee Exclusion clause of policy applied - Whether claim excluded under late notice provisions - Whether provisions were clear and unambiguous - Whether insurer needed to show prejudice before allowing late notice defense.

D & 0 insurance - Settlement of claim - Allocation - Claim by United States investors against British Columbia corporation and its directors and officers - Corporation uninsured - Directors and officers liability insurance purchased by corporation - Settlement of claim agreed to by insurer - Whether insurer was entitled to allocation of settlement amount between directors and officers and corporation - Whether allocation should be only to extent that liability that might have been established against corporation would not have been entirely concurrent with any liability that might have been established against directors and officers.

Insurance broker - Duty of care - Whether owed to insurer.

Marine insurance - Cargo - “Insured” - Open policy issued to carrier - Carrier in liquidation - Direct action by cargo-owners against carriers London insurers - “Insured” including carrier and associated companies for whom it received instructions to insure - No express instructions to insure by cargo-owners - Alleged custom of trade.

Professional indemnity - Insurance broker - New York - Exclusion - Commingling of monies or accounts - Summary judgment against broker on clients claims for unremitted premiums and recoverables - Brokers claim for indemnity under professional indemnity policy denied - Whether brokers claim excluded under policy - Whether state court based its decision on brokers failure to forward premiums and remit reinsurance recoverables or brokers inability to locate and produce its financial records - Whether exclusion ambiguous.

Accident insurance - Definition - Medical condition - Post traumatic stress disorder (PTSD) suffered by pursuer fireman as result of attending distressing incidents - “If bodily injury results in permanent disability “ - Nature of medical condition from which pursuer suffered - “ Bodily injury shall mean accidental bodily injury “ - Whether “bodily injury” included PTSD - Whether fireman suffered “accidental” injury because he voluntarily and knowingly attended at incidents.

Business insurance - Fraud - Claim - Forfeit of benefits - Genuine fire claim followed by fraudulent fire claim - Whether genuine claim forfeited - Claims condition: “all benefit under this policy shall be forfeited” - Common law -Contra proferentem.