Overview

Insurance programmes consisting of more than one layer of cover can readily give rise to tensions between the insurers participating on the different layers. Whilst good market practice on a daily basis avoids such tensions materialising, the judgment of the UK Commercial Court last Friday in Teal Assurance v WR Berkley and Aspen shows the extent of dispute that can arise in challenging cases.

In the Teal case, the particular question for the Court was whether the top excess layer policy was triggered by incurred losses at a time when the underlying insurers had reserved in full in respect of other potential future losses but were far from paying out their full limits.

Barlow Lyde Gilbert discusses the issues and implications of the case.

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