Media Coverage
Media Coverage
Press Contacts: Erik Cummins, Matt Hyams, Olivia Thomas
09.09.16
Ruling on an issue of first impression for the Empire State's appellate courts, a panel of the New York Appellate Division's First Department held on Sept. 1 that Ace unit Century Indemnity Co. doesn't have to indemnify National Grid subsidiary KeySpan Gas East Corp. for environmental cleanup costs attributable to time periods when pollution liability coverage was unavailable in the marketplace.
The decision may be ripe for review by New York's highest court, Insurance Recovery & Advisory partner David Klein said, citing what he described as an inconsistency in the law.
While the appellate panel said that the "during the policy period" language in Century's policies precludes coverage of losses for periods in which a policyholder didn't buy coverage, the New York Court of Appeals determined in its seminal Viking Pump decision in May that the presence of a noncumulation clause — which provides that only a single policy limit is available for a loss covered under multiple policy periods — can override that language.
"On the one hand, the [KeySpan] court says the language ‘happening during the policy period’ prevents coverage of losses during periods in which the policyholder didn’t purchase coverage. On the other hand, it acknowledges, with Viking Pump, that this ‘literal-language’ impediment to coverage is removed when the policy has a noncumulation clause — even though the literal language is still present," Klein said.