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Am. Employers' Ins. Co. v. Swiss Reinsurance Am. Corp.

United States Court of Appeals for the First Circuit

June 27, 2005, Decided

No. 04-2635

Opinion

 [*130]  BOUDIN, Chief Judge. This case is a companion to our decision today in  Commercial Union Ins. Co. v. Swiss Reinsurance Am. Corp., 413 F.3d 121, 2005 U.S. App. LEXIS 12705, No. 04-1709. Both involve reinsurance and the same reinsurer--Swiss Reinsurance America Corporation ("Swiss Re") and related cedents (the "cedent" being the insurance company that is reinsured). The cedent in No. 04-1709 is Commercial Union; in this case it is American Employers' Insurance Company ("American"),  [*131]  which is now affiliated with Commercial Union. One of the two questions presented [**2]  in this case overlaps with that in Commercial Union; the other differs.

We begin with the facts and litigation history. American provided excess insurance coverage to Pennsalt Chemical Company pursuant to three multiple-year umbrella insurance policies--the "A-15 policies"--together covering the period January 1, 1964, through January 1, 1971. 1 The policies covered liability for bodily injury and property damage that might be incurred by Pennsalt, over and above coverage provided by a primary insurer (who plays no role in the present litigation).

American's own liability to Pennsalt was subject to limits set forth in the American policies: $ 2 million for "each occurrence" under the first two American policies and $ 5 million per occurrence under the third. All three policies stated that the per-occurrence limit "is the total limit of the company's liability under [**3]  this policy for ultimate net loss as a result of any one occurrence." All three policies, with minor variations, defined "occurrence" to mean:

(a) an accident, or (b) an event, or continuous or repeated exposure to conditions, which unexpectedly results in personal injury, property damage, or advertising liability . . . during the policy period. . . . All personal injury and property damage . . . arising out of one event or continuous or repeated exposure to substantially the same general conditions existing at or emanating from one premises location shall be deemed to be one occurrence.

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413 F.3d 129 *; 2005 U.S. App. LEXIS 12708 **

AMERICAN EMPLOYERS' INSURANCE COMPANY, Plaintiff, Appellant, v. SWISS REINSURANCE AMERICA CORPORATION, Defendant, Appellee.

Subsequent History: As Corrected, June 29, 2005. As Corrected, July 18, 2005.

Prior History:  [**1]  APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. [Hon. Joseph L. Tauro, U.S. District Judge].

 Am. Employers' Ins. Co. v. Swiss Reinsurance Am. Corp., 275 F. Supp. 2d 29, 2003 U.S. Dist. LEXIS 13504 (D. Mass., 2003)

CORE TERMS

sites, settlement, reinsurance, annualization, policies, discount, certificates, coverage, cedent's, good faith, limits, occurrence, top, insured, district court, per-occurrence, costs, secondary, remediation, calculate, exposure, follow-the-settlements, conditions, clauses, parties, terms, percent, losses, settle, policy period

Insurance Law, Types of Insurance, Excess Insurance, Following Form Policies, General Overview, Reinsurance, Following the Settlements, Utmost Good Faith, Exclusions, Pollution, Civil Procedure, Appeals, Standards of Review, De Novo Review, Summary Judgment Review, Standards of Review, Liability & Performance Standards, Good Faith & Fair Dealing, Defense Obligations