Aug. 14, 2013
Decision stings insureds, though impact overstated
It has been widely reported that this June the 2nd Circuit overruled a seminal decision regarding excess insurance. That turns out to be an overstatement, but the news is not good for policyholders. By Kurt W. Melchior
Generations of policyholders' coverage lawyers have feasted on the very brief, 4-paragraph 1928 opinion of Judge Augustus Hand in Zeig v. Massachusetts Bonding & Insurance Co., 23 F. 2d 655, which held that an excess insurer must pay once the underlying limits are "exhausted in the payment of claims to the full amount of the expressed limits." The issue is what it takes to trigger the excess policy: Must underlying ins...
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