Practice Points

Always Carefully Review Policy Language in Long Tail Claims

A recent court decision highlights the importance of carefully analyzing policy language in older policies implicated in long-tail claims and the continued application of contra proferentem

by Seth M. Friedman

A recent court decision highlights the importance of carefully analyzing policy language in older policies implicated in long-tail claims and the continued application of contra proferentem.

In Nat'l Union Fire Ins. Co. v. Scapa Dryer Fabrics, Inc., 819 S.E.2d 920 (Ga. Ct. App. 2018), the Georgia Court of Appeals held policy language was ambiguous, defeating the primary and excess insurers’ bid to limit coverage for long-tail asbestos claims.

At issue were primary policies from 1983-1987. The 1983-1985 primary policies had limits of $1 million. For the 1986 and 1987 renewal policies, the liability limits were amended by two endorsements — one which set the total liability limit for “Ultimate Net Loss” resulting from any one occurrence to $7.2 million, and another which contained a non-cumulation provision.

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