Policy Language Can Curtail Long-Tail Insurance Claims

By Paul Ferland (May 21, 2018, 2:39 PM EDT) -- "Long-tail" insurance claims have proved particularly vexing to insurers and insureds alike, specifically with regard to allocation of liability. The New York Court of Appeals recently clarified the law concerning such allocation of liability in Keyspan Gas East Corp. v. Munich Reinsurance America, Inc. The outcome in Keyspan, in favor of the insurer, rested largely on the language of the insurance policy in question. Further, the Court of Appeals rejected the insured's public policy argument, thereby giving weight to the policy language and setting New York apart from states that have required insurers to bear the risk of loss during periods where coverage was unavailable in the marketplace. Accordingly, Keyspan is a reminder of the importance of the language used in drafting insurance policies, and provides clarity on the legal analysis of "long-tail" claims under New York law....

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