Second Circuit confirms excess insurance is triggered only upon actual payment of all underlying limits
Federal Insurance Company has achieved an important victory in a long-standing insurance coverage litigation concerning the proper trigger of excess directors and officers insurance. DLA Piper represented Federal, a division of Chubb & Son, in the case.
In a much-anticipated decision on 4 June, the US Court of Appeals for the Second Circuit confirmed the position advanced by Federal, holding that Federal’s excess directors’ and officers’ liability insurance policies issued to the former executives of long-defunct Commodore International Ltd (maker of the classic Commodore 64 personal computer) cannot be triggered absent actual payment of the limits of liability of all underlying insurance.
The Second Circuit opinion, Medhi Ali, et al v Federal Insurance Company, authored by Judge José A Cabranes, affirms a precedent-setting decision by District Court judge Richard J Sullivan, Federal Insurance Company v The Estate of Irving Gould, et al, in the Southern District of New York. The Second Circuit held that Federal and Travelers (another excess insurer on the tower) have no obligation under their excess policies until the amount of the underlying insurance limits is paid, even if unpaid exposure in the underlying case or an unpaid settlement reaches the excess insurance layers…
If you are registered and logged in to the site, click on the link below to read the rest of the DLA Piper briefing. If not, please register or sign in with your details below.
News from DLA Piper
News from The Lawyer
Briefings from DLA Piper
The Financial Report — CSA proposes prospectus amendments; ASIC on use of internet for selling securities; and more
DLA Piper has released the latest version (Volume 3, No.5) of The Financial Report, featuring news and analysis from across the financial sector.
This issue looks at some of the issues that will be prominent in the emerging financial environment and the developing products that are arising in the post recessionary global economy
Analysis from The Lawyer
The fragile refinance market is back in rude health and US-style alternative lenders are stepping up with innovative structures to sustain the recovery
The Lawyer’s latest Top 50 litigation firms list shows that business for dispute specialists is roaring along while new in-depth detail reveals the winning strategies