Documentation Requirements: No Right for Excess Carriers to Second-Guess Primary Carriers' Settlement Payments

Since 2001, numerous insurance companies have sought to impose on asbestos liability claims so-called "Documentation Requirements" ("DRs"), seeking to limit coverage provided by its policies to those claims that meet certain criteria. Those insurance companies assert that the DRs are necessary to counter the growing number of unsubstantiated asbestos-related bodily injury claims brought against policyholders. Generally, the DRs require a policyholder to provide medical documentation and data to show each asbestos injury for each claimant, as well as provide product identification and exposure history. <i>See</i> Scott Moser, Mealey's Seminar, 16 <i>Mealey's Litig. Rep.</i> 12 (Dec. 11, 2001) (an attorney for Equitas speaking about the documentation requirements). The policyholders, on the other hand, see the DRs as unreasonable conditions to coverage that are not found anywhere in the policy language. They argue that in many cases it may be reasonable for them or for their primary carriers to settle or to have settled claims for which there is not yet fully developed information, to avoid, <i>inter alia</i>, increased defense costs and the possibility of a much higher judgment if the information developed is unfavorable.

34 minute read September 01, 2005 at 02:34 PM

By

Michael T. Sharkey