July 08, 2020 Feature

Eroding Limits Policies: One Bad Case Away from Disaster?

By Mitchell A. Orpett and Kevin J. Grigsby
Zuki/GettyImages/DigitalVision Vectors

Zuki/GettyImages/DigitalVision Vectors

Insurers and defense counsel need to be mindful of claims under policies with eroding limits and should communicate early and often with the policyholder to avoid conflicts and bad faith.

For God’s sake, let us sit upon the ground / And tell sad stories of the death of kings; / How some have been deposed; some slain in war, / Some haunted by the ghosts they have deposed; / Some poisoned by their wives, some sleeping killed; / All murdered: for within the Hollow Crown / That rounds the mortal temples of a king / Keeps Death his court . . . and humoured thus / Comes at the last and with a little pin / Bores through his castle wall, and farewell king!

—William Shakespeare, Richard II, Act III, Scene 2

For those of us who believe that all life’s lessons can be learned from a careful reading of Shakespeare, King Richard’s lament offers valuable insights about the fragility of political power. The same might well be said about the power held by parties with certain legal rights—for example, the power given to one under contract or common law.

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