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The Board of Appeal decides in favor of the Arch unit in rig explosion cases



A federal appeals court has set aside a subordinate court decision in favor of WR Berkley Corp. in its dispute with an entity within Arch Insurance Group Inc. over compensation for a worker's injuries during an explosion of an oil rig. [19659002] The dispute stems from payments made by Arch Insurance Co. has filed for damages against Parkersburg, West Virginia-based HG Energy LLC and Duson, Louisiana-based Stric-Lan Cos. LLC, according to Tuesday's decision by the 4th United States Circuit Court of Appeals in Richmond, Virginia, Arch Insurance Co. and Steadfast Insurance Co. v. Berkley National Insurance Company; Stric-Lan Cos., LLC and HG Energy LLC.

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2, HG Energy, which operates oil and gas wells in West Virginia, and Stric-Lan, a well service provider, entered into service and supply agreements that required Stric-Lan to procure insurance and name HG Energy as additional insured. The agreement covered defense and liability for damages for both companies, according to the decision.

In order to fulfill the main agreement, Stric-Lan received insurance from the Berkley unit Berkley National Insurance Co. and HG Energy received insurance through Arch Insurance, which as well as Zurich Insurance Group unit Steadfast Insurance Co.

Stric-Lan employee Tyler Kunz was seriously injured in an explosion at a HG Energy workplace when he lit a cigarette next to an active natural gas well. He sued HG Energy and Stric-Lan, claiming that HG Energy had failed to provide him with a safe workplace and that Stric-Lan was liable under West Virginia & # 39 ;s intentional intent.

After Stric-Lan and Berkley refused the case, it was decided by Arch and Steadfast, with Arch obliged to pay Mr. Kunz $ 5 million and Steadfast $ 1 million, with both insurers paying defense costs.

Arch and Steadfast sued Berkley and Strict-Lan in the U.S. District Court in Charleston, West Virginia, seeking a decision that Berkley had to contribute to the defense and settlement.

The Court ruled in favor of the main agreement, provided that Stric-Lan was only required to pay compensation for its negligence.

It concluded that the settlement was based on HG Energy's negligence, not Stric-Lan & # 39; s, Arch had no right to damages to either Stric-Lan or Berkley. Steadfast reached an agreement on the matter and is not a party to the current dispute.

The decision was overturned unanimously by a three-judge appeals panel, which said that the lower court "relied on incorrect distributions of misallocation" in its analysis.

If "Kunz's damage was entirely due to Stric-Lan's negligence and HG Energy is left to pay Kunz's damages, Stric-Lan must indemnify HG Energy for its percentage of defects," the panel said in submitting the lower court decision and review for further negotiations.

Lawyers in the case had no comments or did not respond to requests for comment.


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