Comments on: Is Your Insurance Policy even Worth the Paper it’s Printed On? http://pantsinacan.com/2009/02/06/do-insurance-policies-actually-cover-anything/ A Personal Finance Blog with a Silly Name Wed, 23 May 2012 04:33:51 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Banking on Cord Blood? » Pants in a Can http://pantsinacan.com/2009/02/06/do-insurance-policies-actually-cover-anything/#comment-53328 Banking on Cord Blood? » Pants in a Can Tue, 14 Apr 2009 23:44:42 +0000 http://pantsinacan.com/?p=1104#comment-53328 [...] (Or insurance, frankly… The kind that doesn’t actually cover anything.) Leave a Reply [...] [...] (Or insurance, frankly… The kind that doesn’t actually cover anything.) Leave a Reply [...]

]]> By: A Big Sigh of Relief… » Pants in a Can http://pantsinacan.com/2009/02/06/do-insurance-policies-actually-cover-anything/#comment-44965 A Big Sigh of Relief… » Pants in a Can Sun, 15 Feb 2009 23:10:15 +0000 http://pantsinacan.com/?p=1104#comment-44965 [...] least, I think I am… Leave a [...] [...] least, I think I am… Leave a [...]

]]> By: Brad Ford http://pantsinacan.com/2009/02/06/do-insurance-policies-actually-cover-anything/#comment-43345 Brad Ford Sun, 08 Feb 2009 00:55:09 +0000 http://pantsinacan.com/?p=1104#comment-43345 From my reading of the actual court document, it may be the suit is to prevent The Hartford for getting hit on multiple policies. CGL policies are “occurrence” policies which should provide one “limit” for incidents that occur during the policy period. Because of the large number of injuries and deaths, the loss from this incident is likely to exceed to amount of coverage available. When this happens, the plaintiff’s (and the insured) try to increase the amount of coverage by saying there is coverage under policies covering multiple policy periods. I laid out a simple example below: Let’s say an insured has a policy with $1m limits for the 1/1/08 to 1/1/09 policy period. They renew the policy for 1/1/09 to 1/1/10. The policy has an “occurrence” trigger. Let’s say the outbreak hits on February 1, 2009 and causes $40m in damages. Assuming the claim is not otherwise excluded: 1. The carrier will want to say there is $1m of coverage available under the 2009-2010 policy. They will argue the “occurrence” happened when the outbreak hit and only the 2009-2010 policy is implicated. 2. The insured will argue there is $2m of total coverage available under the 08-09 and the 09-10 policy. They will say there were two occurrences as some peanuts were produced and shipped in 2008 and some peanuts were produced and shipped in 2009. Of course, there are probably other coverage questions that will be addressed in the litigation. From my reading of the actual court document, it may be the suit is to prevent The Hartford for getting hit on multiple policies. CGL policies are “occurrence” policies which should provide one “limit” for incidents that occur during the policy period. Because of the large number of injuries and deaths, the loss from this incident is likely to exceed to amount of coverage available. When this happens, the plaintiff’s (and the insured) try to increase the amount of coverage by saying there is coverage under policies covering multiple policy periods.
I laid out a simple example below:
Let’s say an insured has a policy with $1m limits for the 1/1/08 to 1/1/09 policy period. They renew the policy for 1/1/09 to 1/1/10. The policy has an “occurrence” trigger. Let’s say the outbreak hits on February 1, 2009 and causes $40m in damages. Assuming the claim is not otherwise excluded:
1. The carrier will want to say there is $1m of coverage available under the 2009-2010 policy. They will argue the “occurrence” happened when the outbreak hit and only the 2009-2010 policy is implicated.
2. The insured will argue there is $2m of total coverage available under the 08-09 and the 09-10 policy. They will say there were two occurrences as some peanuts were produced and shipped in 2008 and some peanuts were produced and shipped in 2009.

Of course, there are probably other coverage questions that will be addressed in the litigation.

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