ALI's 2018 Restatement on Liability Insurance: What Insurance Industry Professionals Need to Know

Description

The significance of the new Restatement on the insurance industry is in dispute. Historically, Restatements published by the ALI have had an enormous influence on binding legal decisions. The U.S. Supreme Court cited ALI publications 71 times during the 2013 to 2015 terms of Court, and state and federal courts have cited ALI publications over 200,000 times. Several courts cited the Restatement of the Law of Liability Insurance even before the ALI formally voted to adopt it. Since adoption, the number of citations to, and courts' reliance on, the Restatement has accelerated. However, some state legislatures are pushing back.

And while the scope of the Restatement is broad, our panel will focus on those areas of concern to insurance coverage professionals, including the plain-meaning rule to policy interpretation, the duty to defend, claim settlement, bad faith, and allocation in "long-tail" or continuous injury claims.

The Restatement's position on extrinsic evidence in insurance contract interpretation may lead to more significant uncertainty and result in higher costs to resolve insurance coverage disputes if courts rely on external evidence rather than the plain language of the agreements to interpret agreements.

Similarly, the problems of how to determine which policy or policies to trigger for long-tail claims--such as environmental losses or asbestos claims where the damages progress over time or do not manifest for a lengthy period--and how to allocate costs among multiple triggered policies continue to vex courts.

Listen as our panel of distinguished insurance practitioners outlines the Restatement's most important takeaways, discusses how it may influence courts addressing coverage claims, and provides insight into the potential uses of the Restatement by counsel to support their clients' interests.