Course / Program Material
2007 TIPS 15th Annual Insurance Coverage Litigation Committee Program - Tucson AZ
Roberta reminds us that insurance coverage law varies greatly from state to state -- and this is the reason why the performance of a thorough and thoughtful choice of law analysis is critical before a declaratory judgment is even contemplated. Her paper opens with several examples of how the determination of which law applies determines the coverage dispute -- for example, coverage disputes that concern "trigger of coverage", interpretation of the absolute pollution exclusion, and the insurability of punitive damages can be outcome determinative depending on the jurisdiction. Roberta next identifies two battlefield/armament limitations found in the so-called "Bermuda-form" policies that seek to drastically curtail policyholder's rights to litigate coverage disputes in court (as compared to arbitration) and to mandate that the policy be interpreted under the laws of New York, even if the policy has no relationship with the State of New York. Some state statutes render arbitration clauses in policies invalid, in spite of the Federal Arbitration Act, and Roberta explains why.
Finally, Roberta identifies key considerations as a policy holder in deciding whether to pursue a declaratory judgment action in state or federal court and the problems with litigating coverage disputes against the Underwriters of Lloyd's in federal courts.