Registration and Continental Breakfast
Allocating among multiple policies is a jurisdictionally sensitive issue.
With different states having different laws, it is important to keep abreast
of what various states are contemplating and what approaches they are
taking when dealing with the issues of allocation. This session will provide
you with a comprehensive review of the year’s most important rulings.
Follow along as counsel well versed in the new caselaw developments
over the past year engage you in an indepth examination of the recent
decisions impacting allocation. Participants will learn what these cases
reveal about trends in insurance allocation as well as recommendations
for how practitioners can update their strategies in response to recent
developments going forward.
the Status of the Insured (“Named Insured”/“Additional Named Insured”/“Additional Insured”)
Figuring Out What Method to Employ and How to Go About Allocation
- Pro rata vs all sums: What is it based on
- “All sums” allocation; Pro rata; Time-on-the-risk times limits
- “All sums”: When operating under “all sums” theory
- ‘Equal shares’ method for allocating defense costs vs. ‘pro-rata’ method
- What level of transparency is required by policy holders and how much do they need to disclose as to their dealings with other insurers?
- Triple trigger vs. All sums
- Re-allocation among insurers after an all-sums allocation
- Developments in “Trigger” of Coverage and developments in the law in different jurisdictions on how they apply continuous trigger
- Use of statistical evidence to show dates of injury or damage and how this affects trigger
- How do policies get triggered?
- When coverage is first triggered
- Who has the burden of proof as to when coverage begins for indemnity (as opposed to duty to defend) and what level of proof of exposure is necessary to trigger an indemnity obligation?
- Delaying trigger dates and how it’s fought off
- Number of occurrences and contractual definitions of occurrence
- What constitutes an occurrence for purposes of any self-insured
retention or policy limits
Number of Occurrences, Contractual Definitions of Occurrence and More
Viking Pump/Warren dispute, Non-Cumulation and “Other Insurance”, Application of Anti-Stacking Provisions/Clauses
- The Viking Pump/Warren dispute: assessing the latest on whether allocation is impacted by non-cumulation/prior insurance clauses in policies. What’s the impact in New York and elsewhere?
- Addressing the latest on cases such as Viking Pump in which policyholder advocates are trying to unwind pro rata allocation rules by contending that they cannot apply if insurance contracts contain anti-stacking provisions
- Pro rata: Viking Pump and non-cumulation clause: NJ’s “hybrid” approach and other recent decisions
- The interplay between allocation and non-cumulation and/or
- “Other insurance” clauses vs. public policy: basics of the operation
of Other Insurance clauses, and the resolution of conflicts between competing clauses
“Stacking”: What Can Be “Stacked?”; Differences Among Jurisdictions on the Issue of “Stacking”; Multiple Years of Coverage and Multi-Year Policy Issues
- Stacking” of insurance coverage — what kinds of losses implicate
- What kinds of policies may be potentially “stacked”?
- SIR stacking: In what states and in what circumstances is it appropriate to “stack” self-insured retentions
- In what states can multiple years of coverage be “stacked”?
- Annualization of Limits on Multi-Year Policies
- Differences among the jurisdictions concerning whether “stacking”
of Policy Limits is always permitted, never permitted, or permitted only sometimes
Primary Coverage Exhaustion, Exhaustion of Policy Limits, Horizontal Exhaustion
- What Are the Rights and Obligations Between Primary and Excess
- Difficulties and methods for demonstrating primary exhaustion so that a policyholder can access its excess coverage
- Exhaustion of underlying coverage and attachment of excess: is exhaustion by payment required, or can underlying layers be exhausted by settlement?
- Exhaustion by layers or at least all primary before excess
- Exhaustion of Policy Limits: How Does Primary Coverage Have to
Exhaust in Order to Bring Excess Coverage onto the Risk?; Proving exhaustion of policy limits?
- Is there horizontal exhaustion in a strict sense or are rights controlled by other insurance causes?
- Can indemnity agreements or statutes alter or affect exhaustion
- Can excess layer be reached if a policy holder settled with primary
insurer for less than the limit amount?
- To what extent does a policy holder need to satisfy any gaps before the first layer of excess can be reached?
Excess Insurance Issues Relating to the Duty to Defend and the Zieg/Qualcomm Dispute
- Does a settlement for less than full limits prevent the policyholder
from ever exhausting so it can never collect from the excess policies in that year?
- The Zieg/Qualcomm dispute: Does a policyholder have to collect 100% of underlying coverage before being able to access excess coverage? Or are excess insurance companies relieved of their obligations if an underlying insurance company pays less than 100% of its limits?
- Does a primary carrier’s settlement for less than its full limits trigger the excess policy status?
- Settlement considerations when in a Qualcomm Jurisdiction
- How to allocate a settlement after an insurer or insurers refuse to defend
- Where do key jurisdictions stand with respect to these issues?
- Case law regarding duty to defend by excess carriers
- Case law regarding possible drop down by excess carriers SIRs/Deductibles: How Are They Different, How Are They Satisfied, Exhausted and Allocated
- How SIR’s, deductibles and retro agreements are dealt with by courts in allocating coverage
- Application of SIRs/deductibles/fronting policies in the allocation
- SIR exhaustion
- Differences between retentions and deductibles
- Satisfying retentions/deductibles
- Exhaustion of retentions/deductibles
- Allocation and retentions/deductibles?
Networking Luncheon for Attendees & Speakers
Vice President & Assistant Counsel, Claims
- Latest on allocations where an insured is involved in ongoing litigation in multiple states such as toxic long tail torts
- Analyzing asbestos claims and allocating them to insurance policies
on behalf of policyholders, insurers, bankruptcy trusts, future claims
representatives and financial institutions
- In the context of asbestos, is each separate personal injury claim an
occurrence or are all claims against the company an occurrence or
all claims at one particular site the occurrence?; Products v. Premises
- Allocating among triggered policies and among parties or claims
- Forecasting future asbestos related liability; asbestos bankruptcies
involving an injunction protecting settling parties
- Availability of insurance for environmental or asbestos claims after the mid-1980s: does unavailability collapses the allocation period, and if so, how to establish that insurance was or was not available
- Whether an insured’s decision to continue producing a product for which it cannot obtain insurance should defeat the unavailability argument
- Excess exposure in coverage actions brought in connection with
- Jurisdictions that are dealing with workers compensation exclusivity
issue for former employees who may now be able to sue in court and
the insurance coverage issues that arise when the courts open up that
issue for new claimants
Associate General Counsel
Legion Insurance Company (in liquidation)
- Owens-Illinois/Carter-Wallace and insolvent insurers — how expansive is the ruling being applied?
- Insolvency of Policy Holders vs. Gaps in Coverage Which Includes
- When and to what degree does the state guaranty fund participate:
Responsibility of State Guaranty Associations in allocation schemes;
responsibility of state guaranty funds in paying the insolvent share
- The Farmers Mutual decision in NJ opened up a lot of questions that the court did not address. How to adapt in response? What’s the impact of the Ward Sand holding that the statutory changes that were the basis for the Farmer Mutual decision only apply to post December 2004 insolvencies?
- Drop down for insolvencies where you sit above an insolvent or drop over and pay your percentage first where you are participating in a layer with insolvencies: how one allocates where there are solvent policies either above or below an insolvent
- Treatment of periods insured by insolvent carriers in long-tail allocations
When and to What Degree Does the State Guaranty Fund Participate
Senior Claim Counsel, NAC Claims Legal Group
Zurich North America
- Jurisdictional differences in the Relationship Between Allocation
and Rights of Contribution
- Obstacles to the assertion of contribution claims, either by “spiked”
insurers in joint & several jurisdictions, or by non-settling insurers in
- In “all sums”, contribution claims between insurers and set offs between insurers
- Can other insurers bring contribution claims against those insurers that settled with the policy holder?
- Impact of settlements on claims against non-settled carriers, e.g. settlement credits, contribution rights, etc.
Miles R. Afsharnik
Senior Vice President & National Claims Director Professional Risk Practice
Wells Fargo Insurance
- Allocation of defense costs between covered and non-covered claims
- Allocation of defense costs among covered and non-covered parties
under liability policies, and allocation of defense costs incurred by an
individual sued in covered and non-covered capacities
- Impact, if any, when policy is a duty to defend vs. duty to pay defense costs
- Allocation issues where policies cover only directors and officers and
not the entity
- How to address uninsured periods/extent of uncovered coverage terms/conditions breaches in the allocation
- Allocation of exclusions: Drafting as well as legal issues
- Allocation when policy contains an allocation provision
- How are defense costs and indemnity allocated, if at all?
- Possible allocation disputes amongst insureds
Conference Adjourns to Day Two