Practice Areas: Product & Consumer Litigation

Insurance Coverage

McGuireWoods has broad experience representing clients on every aspect of insurance coverage, from advice on appropriate coverage and risk management strategies, to assistance with claims processing and negotiation, to arbitration and litigation of coverage matters. For our product manufacturing clients, we have developed particular strength in the areas of “batch,” aggregate stop loss, and other high excess policies that cover a company’s aggregated product liability losses.

Batch coverage provides to industry what British arbitrators sometimes call "catastrophe cover." In the mid-1980s, the insurance markets for high dollar, high risk excess coverage were sparse. Pharmaceutical companies, automakers and other companies subscribed to a new type of insurance underwritten by upstart ACE Insurance Company Ltd., and soon thereafter XL Insurance Ltd. A batch policy, formally called "managed aggregate excess liability" permits insureds to aggregate losses from alleged or actual product injuries and property damage with pattern or similar causation.

Because the first two batch insurers were based in Bermuda, had executives with common corporate origin, and utilized the same essential policy document, batch insurance policies became known as "the Bermuda Form." Batch insurance is often stacked with XL, ACE and other carriers providing cover at different layers.

Obtaining payment of claim for a client under the Bermuda Form requires special skills for a law firm. Batch coverage is written on the Bermuda Form, as mentioned, but it specifies New York substantive law and calls for London arbitration in the (likely) event of disputes. London arbitration proceeds under the English Arbitration Act of 1996. The Bermuda Form is laden with traditional and customary meanings highly familiar to the regular practitioners working around the policy, but not readily apparent to its reader.

In addition to our experience, we know the lawyers and firms that routinely represent the insurers. With our knowledge of the policies, the coverage issues, and the players, we are well-positioned to assist clients. The lawyers in the product and consumer litigation insurance group participate in the firm’s broader insurance coverage practice group.