Liability insurance

Coverage for asbestos liabilities

A liability policy may be written on a claims made basis (the policy applying to claims made against the assured during the currency of the policy), an events basis (the policy applying to claims made against the assured for acts of negligence occurring during the currency of the policy) or a losses occurring basis (the policy applying to claims made against the assured for injury suffered during the currency of the policy).The distinction between events policies and losses occurring policies is often blurred, given that the act of negligence gives rise to an immediate loss (even though it may not have been discovered immediately) and both types of liability cover will apply as of the date of the negligent act. The distinction becomes apparent where the negligent act results in loss at some future date: an events policy attaches to the act, whereas a losses occurring policy attaches to the loss. The distinction has become apparent in the decision of HHJ Kershaw QC in Bolton Metropolitan Borough Council v Municipal Mutual Insurance and Commercial Union Assurance , May 2005, forthcoming in [2005] Lloyd’s Rep IR.