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Insurance Claims professional presents articles and videos on insurance, insurance Claims and insurance law for insurance Claims adjusters, insurance professionals and insurance lawyers who wish to improve their skills and knowledge. Presented by an internationally recognized expert and author.
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May 14, 2024
Insureds Must Negotiate Terms of Coverage Before Inception

Litigation is an Improper Method to Negotiate Insurance Coverage

Read the full article at https://lnkd.in/dztfuAhr, #see the full video at https://lnkd.in/dgGX_AST and at https://lnkd.in/d3hTb6ZK and at https://zalma.com/blog plus more than 4800 posts.

Post 4800

Plaintiffs’ attempted to secure insurance coverage for an action currently pending in federal court (the “Underlying Litigation”). Plaintiffs looked to two towers of D&O insurance to provide that coverage, naming a dozen individual insurers in the process. The problems faced by the insurers were:

1 A provision in the earlier tower of insurance, dubbed the “No Action” clause, commands that no actions may be filed against the insurer until the insured’s payment obligations are finally determined.
2 Plaintiffs attempted to convince the Court that the need to enable swift litigation against insurers outweighed the need to enforce contracts as written.
3 The prior acts exclusions found in the latter tower’s policies.
4 The Underlying Litigation centers on alleged wrongs that occurred too early to be eligible for coverage under the latter tower.

In Origis USA LLC and Guy Vanderhaegen v. Great American Insurance Company, et al, C. A. No. N23C-07-102 SKR CCLD, Superior Court of Delaware (May 9, 2024) explained the way Delaware interprets insurance contracts.

FACTUAL BACKGROUND

The insurers are two towers of multiple insurers who are named as defendants.
The Underlying Litigation

The Underlying Litigation are only tangentially relevant to this coverage dispute. It was brought by Pentacon BV and Baltisse NV (together, the “Investors”) to recover sums that Plaintiffs and Plaintiffs’ affiliates-who are not insured under the two towers at issue here-allegedly stole through fraud. The heart of the allegations are that Plaintiffs and their affiliates undersold the Investors on the value of the Investors’ shares in Origis and Origis’s parent company, Origis Energy NV.

Plaintiffs and their affiliates bought out the Investors’ interest in Origis and Origis Energy for $105 million. Just a few months later, Plaintiffs sold Origis to a third party for $1.4 billion. The investors complain that they did not get their fair share of that payday.

The 2021-22 Tower

As relevant here, Great American’s policy, which was followed by the other 2021-22 Insurers’ policies, states: “With respect to any Liability Coverage Part, no action shall be taken against the Insurer unless, as a condition precedent thereto, there has been full compliance with all the terms of this Policy, and until the Insured’s obligation to pay has been finally determined by an adjudication against the Insured or by written agreement of the Insured, claimant and the Insurer.”

The 2023-24 Tower

The second relevant tower of D&O insurance (the “2023-24 Tower”) had a policy period of February 4, 2023 to February 4, 2024. In this timeframe, Bridgeway issued the primary policy, and several other insurers (together, the “2023-24 Excess Insurers” and, together with Bridgeway, the “2023-24 Insurers”) each issued excess policies in that ascending order. After the applicable retention, each of the 2023-24 Insurers had a $2.5 million limit.

Each of the 2023-24 Tower’s policies had a provision excluding coverage for claims arising out of wrongful acts that first occurred before November 18, 2021. RSUI’s first-layer excess policy reflects a fairly representative example, stating: “The Insurer shall not be liable to make any payment for Loss in connection with any Claim made against any Insured that alleges, arises out of, is based upon or attributable to, directly or indirectly, in whole or in part, any actual or alleged Wrongful Acts which first occurred prior to November 18, 2021.”

DISCUSSION

Delaware courts review insurance contracts to assess the parties’ intent “as expressed through their contractual language.” Like any contract, when an insurance contract’s terms are reasonably susceptible of but one meaning, and are thus unambiguous, Delaware courts will apply that meaning.
The No Action Clause Precludes This Litigation Against the 2021-22 Tower and Plaintiffs Cannot use this Litigation to Reopen Negotiations.

Great American, joined by Markel, argued that the plain language of the No Action clause blocks Plaintiffs’ ability to bring this coverage dispute before the Underlying Litigation concludes.

Delaware courts are exceptionally inclined to hold sophisticated parties to their bargains. For that reason, the Court refused to disregard the No Action clause.

The Court was fully confident that the representatives of this billion dollar company were well-equipped to understand the policy language and negotiate necessary changes.

The Court enforced the No Action clause as it is written. That prohibition will be lifted when Plaintiffs satisfy the two conditions contained in the No Action clause. Until then, the 2021-2022 Insurers’ motions to dismiss must be granted.

The Prior Acts Exclusion Precludes Coverage under the 2023-24 Tower.

The analysis is even clearer with respect to the unavailability of coverage for the Underlying Litigation under the 2023-24 Tower. Even if the Court were to accept that Plaintiffs met their burden to establish coverage, the 2023-24 Insurers successfully refute that coverage with the prior acts exclusion.

The 2023-24 Insurers’ motions to dismiss must be granted.

CONCLUSION

Plaintiffs’ policies do not support Plaintiffs’ current suit. In one set of policies, Plaintiffs agreed not to sue their insurers until the occurrence of a particular event that is yet to occur. In the other set of policies, Plaintiffs waived coverage for pre-existing wrongs such as the Underlying Litigation. Accordingly, the motions to dismiss must be GRANTED.

ZALMA OPINION

Insurance contracts with multiple towers of insurance coverage with multiple insurers taking on the risk of loss in excess of the underlying insurance coverages where, in this case the layers contained multiple insurance policies waiting for each lawyer to pay out its limit before the next in the tower has to pay. Here, the contract language limited the coverages in ways that upset the insureds who tried to rewrite the policies to provide coverage they did not buy. The court refused to change the conditions of the policy.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

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00:11:05
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October 31, 2025
The Zalma Philosophy of Claims Handling – Part 8

The Professional Claims Handler

Post 5218

Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-8-barry-zalma-esq-cfe-zdwsc, see the full video at https://rumble.com/v70zl4s-the-zalma-philosophy-of-claims-handling-part-8.html and at https://youtu.be/MIYcF71ffRQ, and at https://zalma.com/blog plus more than 5200 posts.

Claims Commandment X – Thou Shall Not Pretend to be a Lawyer

Some experienced and professional claims people know the law in their area of expertise better than most lawyers.

Adjusters should be adjusters and leave lawyering to lawyers. Similarly, lawyers should be lawyers and never try to be adjusters.

Claims Commandment XI – Thou Shall Empathize With the Claimant

Everyone presenting a claim is unhappy, disturbed, shocked, injured and needs help.

Empathy is identification with and understanding of another’s situation, feelings, and motives. It is the ability to understand another person’s circumstances, point of view, thoughts, and feelings....

00:11:08
October 28, 2025
The Zalma Philosophy of Claims Handling – Part 6

HOW TO CREATE AN EXCELLENCE IN CLAIMS HANDLING PROGRAM

See the full video at https://rumble.com/v70wb2i-the-zalma-philosophy-of-claims-handling-part-6.html and at https://youtu.be/tL5nDKPEs40 and at https://zalma.com/blog plus more than 5200 posts.

Post 5217

This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.

An Excellence in Claims Handling program begins with a statement in the insurer’s claims manual or statement of professionalism that it is dedicated to providing excellence in claims handling to every insured who presents a claim.

The excellence in claims handling program should include, at a minimum:

A series of lectures supported by text materials explaining:
A definition of insurance.
How to read and understand an insurance policy.
How to interview an insured, witness, or claimant.
How to assist an insured in the insured’s obligation to ...

00:08:40
October 27, 2025
The Zalma Philosophy of Claims Handling – Part 5

The Professional Claims Handler

Post 5216

Read the full article at https://www.linkedin.com/pulse/zalma-philosophy-claims-handling-part-5-barry-zalma-esq-cfe-jde8c, see the full video at https://rumble.com/v70q4x8-the-zalma-philosophy-of-claims-handling-part-5.html and at https://youtu.be/6b9tZQsEkB4, and at https://zalma.com/blog plus more than 5200 posts.

This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry.
Standards to be a Professional Claims Adjuster

The Insurance claims professional should be a person who:

1. Can read and understand the insurance policies issued by the insurer.
2. Understands the promises made by the policy.
3. Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
4. Are competent investigators.
5. Have empathy and recognize the difference between empathy and sympathy.
6. ...

00:08:18
October 31, 2025
The Zalma Philosophy of Claims Handling – Part 9

The Professional Claims Handler
Post 5219

Posted on October 31, 2025 by Barry Zalma

An Insurance claims professionals should be a person who:

Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.

How to Create Claims Professionals

To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...

post photo preview
October 20, 2025
The Zalma Philosophy of Claims Handling – Part I

The History Behind the Creation of a Claims Handling Expert

The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210

This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster

When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.

I was initially sat at a desk reading a text-book on insurance ...

post photo preview
October 20, 2025
The Zalma Philosophy of Claims Handling – Part I

The History Behind the Creation of a Claims Handling Expert

The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail

Post 5210

This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.

My Training to be an Insurance Claims Adjuster

When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.

I was initially sat at a desk reading a text-book on insurance ...

post photo preview
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