Multiple losses and multiple policies: who pays?
The question of how to allocate multiple losses has recently come before the Supreme Court in Teal Assurance Co Ltd v WR Berkley Insurance (Europe) Ltd and another  UKSC 57. The decision confirms (absent clear express wording in the contracts) that losses should be allocated in the order that the insured’s liability is established. It also highlights one of the potential problems that policyholders can face when different policies within their programmes of insurance (or re-insurance) contain different wordings.
In the case of reinsurance, it is already well established that losses are to be allocated in accordance with the order that the reinsured’s liability in respect of each relevant loss is established (notwithstanding the principle that reinsurance is [re]insurance of the underlying risk and not a contract to indemnify the reinsured).
Under Black & Veatch Corp’s (B&V’s) professional liability insurance programme for 2007-08, B&V had $5m (£3.2m) of primary layer coverage with Lexington, above a self-insured retention of $10m per occurrence. Above this, B&V had three successive excess layers underwritten by Teal, a captive of B&V (the PI Tower). The top layer was a ‘top and drop’ policy for $10m, also underwritten by Teal…
If you are registered and logged in to the site, click on the link below to read the rest of the Addleshaw Goddard briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Addleshaw Goddard
News from The Lawyer
Briefings from Addleshaw Goddard
FAQs and action points for companies that have issued bearer shares
Data Issues Roundup, 20 April; AT&T's $25m privacy settlement; Facebook case in Austria; Google loses out in Germany; and more
Also, UCAS gives data protection undertaking’.
Analysis from The Lawyer
Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all
Could Slater & Gordon achieve its stated aim of becoming a top consumer brand by acquiring Pannone?