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.

Sign in or Register to continue reading this article

Sign in

Register

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

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

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.

Briefings from DLA Piper

View more briefings from DLA Piper

Analysis from The Lawyer

View more analysis from The Lawyer

Overview

3 Noble Street
London
EC2V 7EE
UK
http://www.dlapiper.com

Turnover (£m): 1,566.29
No. of lawyers: 3,961 (UK 200)
Jurisdiction: global
No. of offices: more than 75
No. of qualified lawyers: 625 (International 50)

Jobs