Liability Insurance in International Arbitration

Sir Richard Jacobs is a judge in the Queen’s Bench Division of the English High Court, where he spends most of his time on commercial cases in the Commercial Court. Lorelie S Masters is a Partner at Hunton & Williams LLP in Washington, DC, USA, where she advises and represents policyholders in insurance coverage and litigation. Paul Stanley KC is a barrister at Essex Court Chambers, UK, specialising in commercial law, including insurance and arbitration law.

1. THE LEGAL AND ECONOMIC ORIGINS OF THE BERMUDA FORM
Policy Forms and Liability Problems
US Legal Decisions on Insurance Coverage Issues
The Creation of ACE and XL
Key Features of the Bermuda Form
2. THE BERMUDA FORM: ITS BASIC STRUCTURE
An Occurrence Reported Form
The Period of Cover: Coverage A and B
Limits
The Excess Point
The Inception and Retroactive Coverage Dates
The Exclusions
The Conditions
Schedules and Endorsements
3. CHOICE OF LAW ISSUES UNDER THE BERMUDA FORM
Identifying the Relevant Governing Law
The Division between Substance and Procedure
4. INTERPRETATION OF THE BERMUDA FORM AND THE MODIFICATION OF NEW YORK LAW
The Structure of the Modification of the New York Law Proviso
Interpretation of Insurance Contracts: The Basic Approach
Interpretation of the Modification of the New York Law Proviso
The ‘Forbidden Grounds’
Fruit of the Poisonous Tree?
5. THE COVERAGE CLAUSE
Insurance against Liability
The Insured
Ultimate Net Loss/All Sums Insurance … For Damages
Judgments
Settlements by the Policyholder
Mitigation of Damages
Allocation of Payments
Personal Injury, Property Damage and Advertising Liability
Personal Injury
Property Damage
Advertising Liability
Other Aspects of the Coverage Clause
6. THE DEFINITION OF ‘OCCURRENCE’
Introduction
‘Occurrence’: The Basic Definition
Aggregation
Expected or Intended Injury 6
7. FORTUITY, EXPECTED OR INTENDED, AND THE ‘MAINTENANCE DEDUCTIBLE’
Introduction
Fortuity and Related Doctrines
Expectation and Intention
The ‘Maintenance Deductible’
8. NOTICE OF OCCURRENCE
Introduction
Method of Giving Notice
Notice as a Condition of Coverage
Notice as a Trigger of Coverage: Legal and Practical Considerations
9. ARTICLE II: THE EXCESS POINT AND LIMITS OF LIABILITY
The Excess Point
The Other Insurance Condition
The Policy Limits
Joint Ventures, Partnerships and Minority Interests
10. THE EXCLUSIONS
Introduction 6
Interpretation of Exclusion Clauses: General Principles and the Effect of the Bermuda Form’s Modification of New York Law
Causation
The Specific Exclusions in the Bermuda Form: Introduction
The ‘Prior to Inception or Retroactive Coverage Date’ and ‘Other Insurance’ Exclusion
The ‘Workers’ Compensation, etc’ Exclusion
The ‘Professional Services’ Exclusion
The ‘Owned Property; Care, Custody or Control, etc’ Exclusion
The ‘Products Liability’ Exclusions (‘Efficacy, Loss of Use, etc’)
The ‘Advertising’ Exclusion
The ‘War’ Exclusion
The ‘Toxic Substances’ Exclusion
The ‘Aircraft’ Exclusion
The ‘Watercraft’ Exclusion
The ‘Pollution’ Exclusion
The ‘Nuclear’ and the ‘Radioactive Contamination (Outside the United States)’ Exclusions
The ‘Erisa’ Exclusion
The ‘Repetitive Stress’ Exclusion
The ‘Securities, Antitrust, etc’ Exclusion
11. THE CONDITIONS
The Premium Condition
The Inspection Condition
The Cross-liability Condition
The Notice of Occurrence Condition
The Assistance and Co-operation Condition
The Appeals Condition
The Loss Payable Condition
The Representation Condition
The Other Insurance Condition
The Subrogation Condition
The Changes Condition
The Assignment Condition
The Cancellation Condition
The Currency Condition
The Arbitration Condition
The Conflicting Statutes Condition
The Law of Construction and Interpretation Condition
The Proration of Losses Condition
The Liability of the Company Condition
The Policy Extension Condition
The Reinstatement Condition
The Discovery Period Condition
The Expiration Date Condition
The Former Subsidiaries, Affiliates and Associated Companies Condition
The Notice Condition
The Headings Condition
12. MISREPRESENTATION AND NON-DISCLOSURE
Introduction
Non-Disclosure under New York Law
Misrepresentation under New York Law
Remedy for Misrepresentation
13. WAIVER AND ESTOPPEL AND RESERVATIONS OF RIGHTS
Introduction
Waiver
Estoppel
The ‘Changes’ Condition in the Bermuda Form
14. COMMENCING A BERMUDA FORM ARBITRATION AND APPOINTING ATTORNEYS AND ARBITRATORS
Introduction
Legal Representation
The Commencement of Arbitration
The Selection of an Arbitrator
Appendix: Notice to Commence Arbitration
15. THE COURSE AND CONDUCT OF A BERMUDA FORM ARBITRATION IN LONDON
Introduction
The Overall Shape of the Arbitration
The ‘Pleadings’ Stage
The First Order for Directions
Confidentiality
Discovery of Documents
Preliminary Issues or ‘Bifurcation’
Witness Statements
Expert Evidence
Preparation for the Substantive Hearing
The Substantive Hearing
The Award and Post-Award Events
Appendix 1: First Order for Directions
Appendix 2: Protective Order
16. DISCOVERY, PRIVILEGE AND WAIVER OF PRIVILEGE
General Principles
Discovery in Arbitration in Practice
Legal Professional Privilege
Waiver of Privilege
Confidential Documents
Other Forms of Discovery
17. INTEREST AND COSTS
Interest
Costs