has practiced law for over 35 years, with special expertise and
extensive experience in insurance coverage advice and litigation and
bad faith litigation. Jeff has represented and advised insurers and
insureds in hundreds of coverage disputes involving many aspects of
insurance, including general liability, umbrella and excess coverage,
personal injury and advertising injury liability, property, errors and
omissions, personal lines, reinsurance, workers' compensation and
employers' liability, surety, and fidelity. During the course of his
practice, Jeff has handled insurance litigation in many states. He has
spoken at and contributed papers to local and national conferences on
insurance matters, and conducted a pod-cast for AM Best Co.
135 Main Street, 20th Floor
San Francisco, California 94105
415.808.0300 Phone
415.808.0333 Fax
jkaufman@bhplaw.com
www.bhplaw.com
insurance coverage written on one of the
Bermuda forms need to understand the
differences in coverage provided from
typical domestic or London excess forms.
The differences are significant and can
create gaps in coverage between lower
level and upper level excess coverage.
This article is a quick overview
of the Bermuda form. Its limitations
should be understood before buying
any Bermuda coverage.
Development of the Bermuda
Excess liability form
insurance market in the 1980s, Bermuda-
based insurers developed policy forms
on which to underwrite insurance for
large multinational companies. What
form" is in substantial part a legacy of
the insurance coverage wars in the late
1970s and early to mid-1980s over the
liability from mass tort litigation. The
court decisions on the trigger and scope
of coverage under Comprehensive Gener-
al Liability (CGL) and excess policies for
asbestos, silica, pollution, DES and other
claims largely went against insurers and
took an expansive view of the coverage
available under the policies. Some of
those wars continue even today. Many
courts found that injury in these tort
claims occurred over time and triggered
multiple policies, from first exposure
(often as early as the 1940s) to as late as
the date of claim or death. Some courts
held each triggered insurance policy cov-
ered "all sums" the insured was liable
to pay up to the policy limits. Excess
policies were held to drop down when-
or the insurer was insolvent. Some courts
held that insureds could satisfy their Self
Insured Retentions (SIRs) in one year
by using coverage from another year.
Defense obligations were also broadly
construed. In general, insureds were
largely protected from paying anything as
long as they had any policies available
to pay.
Understanding the typical Bermuda
policy form provisions is much easier
if one reads them with this history in
mind. While the policies are often touted
as being a balanced approach between
the insurer and insured interests, they
are really an effort to avoid the above
historic expansive liabilities. Set forth
below are some of the principle terms of
the Bermuda form.
The Coverage section is divided into
Coverage A and Coverage B. Coverage A
relates to the policy period, and Coverage
B relates to the discovery period, which is
after the termination of the policy. Cover-
age B is discussed further below.
Occurrence based policies were
typically triggered by bodily injury or
property damage occurring during the
Excess Insurance Policy