SILENCE ON EXPENSE LIABILITY IN CONTRACT FAVORS REINSURER
In one of the sister cases previously reported on involving Utica Mutual Insurance Company and one of its reinsurers Munich Reinsurance, a federal district court granted Munich’s motion for summary judgment. Utica sought reimbursement under the reinsurance contract for expenses incurred in litigation with an insured. At issue was whether the reinsurance contract subjected those expenses to Munich’s limit of liability or whether Munich was obligated to pay for those expenses in addition to its $5 million limit of liability. Based on Second Circuit and New York Court of Appeals precedent regarding limit-of-liability provisions in reinsurance contracts, the court held that the limit-of-liability provision applicable to Munich was unambiguously cost-inclusive and that Munich was obligated to Utica for no more than the $5 million. Utica Mutual Insurance Co. v. Munich Reinsurance America, Inc., Case No. 6:12-CV-0196 (N.D.N.Y. Sept. 30, 2013).
This post written by Abigail Kortz.
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