Pillsbury Winthrop Shaw Pittman

An American policyholder in London: English choice-of-law clauses in US insurance policies

By Raymond L Sweigart and Jeffrey A Kiburtz

While certainly not the norm, it is not uncommon for insurance policies issued to companies based in the US, particularly large commercial and excess policies brokered on the London market, to contain choice-of-law and forum clauses specifying that the law of England and Wales governs and that any legal proceedings shall be brought in the English courts.

As one might expect from the birthplace of insurance and home to the best-known insurance market in the world, England does not have a reputation for law that is overtly favourable to policyholders and other insureds. Compounding the trepidation felt by some commercial insureds in these situations, many policies with English choice-of-law clauses also require that disputes be resolved via panels of typically English insurance experts in confidential arbitration proceedings in London.

On the other side, of course, there are many proponents of having complex insurance disputes resolved in London under English law, citing the certainty provided by even-handed rules of interpretation being applied by insurance experts in a confidential setting and the accordant ability of insurers to price risk more accurately…

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