The commercial insurance programs for many multinational and US companies include the "Bermuda Form" policy, a special policy form developed in Bermuda in the mid-1980s, which contains unique provisions and prescribes arbitration, usually in London under the substantive law of New York. These regulations pose challenges to US policyholders and "stack the deck" in favor of insurance companies that are repeat players in "Bermuda Form Arbitration." Policyholders should carefully consider purchasing the Bermuda Form policy and ensuring that they are structured as positively as possible for the policyholder. Presentation of claims according to Bermuda Form policy can present special challenges. If claims arise, policyholders should consult with Bermuda Form policy expertise to ensure that the claim is presented in one eye to the unique definition of "occurrence" and other provisions contained in the Bermuda form policy.
The insurance protection practice group at Hunton & Williams has deep expertise with Bermuda Form policy and Bermuda Form arbitration. We present this series of posts on the unique provisions of these policies and the challenges of Bermuda Form arbitration to provide a policyholder. This series firstly examines the key features of excess liability insurance sold by ACE and XL and now other insurance companies that have addressed key concepts used in the Bermuda form. The series then discusses exercise aspects of arbitration in London according to the English Arbitration Act. Finally, the series discusses the current case law that interprets Bermuda Form policy in both the United States and English courts.
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Bermuda Form History
Insurance Brokers Marsh & McLennan, with a consortium of US policyholders across the Fortune 500, created the first Bermuda Form Insurance Companies, ACE Insurance Company, Ltd. and XL Insurance Company, Ltd. to provide high surplus CGL insurance to companies operating in the US in the mid-1
The unique provisions of the Bermuda form are the subject of later posts in this series. It is useful to consider these regulations and when it happens that you remember this story and the beliefs made by ACE and XL for investors and other potential policyholders made at the time of their formation: that the Bermuda Form insurance companies would break with the unfortunate past , which had led to the introduction of the liability insurance markets in the mid-1980s, when "traditional" liability insurance companies gathered policies carefully to find as many bases as possible to deny coverage as possible. 3 These representations seem increasingly hollow today. Although most of the disputes that arose during the Bermuda form have been settled for many years, today, such disputes are increasingly arbitrary, either because the Bermuda insurers, as insurers, decide to dispute disputes or for the policyholder not to receive compensation ( or even an answer] otherwise.
This is the first post in the blog's Bermuda Form Insurance Arbitration Series.
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A partner in Hunton & Williams LLP's insurance policy practice, Lorelie Masters is a member of the US Bar Association's board and a founder and former president of the US College of Co-operation and Extra Contractual Power, co-author, with English Barrister, Richard Jacobs QC and Paul Stanley QC, of Liability Insurance in International Arbitration: Bermuda form (Hart Publishing, 2d ed. 2011) (" The Bermuda Form "), which won The 2012 Book Insurance Award from the British Insurance Law Association for outstanding contributions to the literature on insurance coverage.
Paul Moura is an associate attorney in Hunton & Williams LLP's insurance protection practice where he represents clients from a variety of industries in the field of insurance recovery and related commercial disputes. Prior to joining Hunton & Williams, Paul was a political scientist at a London-based tank-based college, helping to develop a network of politicians, academics, and lobby groups that collaborated in areas of consumer protection and digital rights. 19659006] 1 The Bermuda form in sections 1.01, 1.16.
2 Id. at § 1.35.
3 Id. in §§ 1.06, 1.12.