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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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March 11, 2026
Public Adjusters Attempt to Represent an Insured Subject to APA Clause

Anti-Public Adjuster Clause Is Effective in New York

Post number 5301

Read the full article at https://www.linkedin.com/pulse/public-adjusters-attempt-represent-insured-subject-zalma-esq-cfe-rubfc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.

Insurers May Contractually Prevent an Insured from Hiring a Public Adjuster

In Peter Barbato & North Jersey Public Adjusters Inc. v. Interstate Fire & Casualty Company, et al, No. 25-cv-5312 (JGK), United States District Court, S.D. New York (December 15, 2025) the plaintiffs, Peter Barbato and North Jersey Public Adjusters, Inc. (“NJPA”), filed suit against several insurance companies, including Interstate Fire & Casualty Company, Independent Specialty Insurance Company, and certain Underwriters at Lloyd’s of London.

FACTS

NJPA is a New Jersey-based public adjusting firm licensed in New York. The dispute centers on ...

00:08:05
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March 11, 2026
Public Adjusters Attempt to Represent an Insured Subject to APA Clause

Anti-Public Adjuster Clause Is Effective in New York

Post number 5301

Read the full article at https://www.linkedin.com/pulse/public-adjusters-attempt-represent-insured-subject-zalma-esq-cfe-rubfc, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.

Insurers May Contractually Prevent an Insured from Hiring a Public Adjuster

In Peter Barbato & North Jersey Public Adjusters Inc. v. Interstate Fire & Casualty Company, et al, No. 25-cv-5312 (JGK), United States District Court, S.D. New York (December 15, 2025) the plaintiffs, Peter Barbato and North Jersey Public Adjusters, Inc. (“NJPA”), filed suit against several insurance companies, including Interstate Fire & Casualty Company, Independent Specialty Insurance Company, and certain Underwriters at Lloyd’s of London.

FACTS

NJPA is a New Jersey-based public adjusting firm licensed in New York. The dispute centers on ...

00:08:05
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March 10, 2026
Acting as Your Own Lawyer is Foolish

Proof of Highly Contaminated Water is Required for Extra Payments

Post number 5300

Read the full article at https://www.linkedin.com/pulse/acting-your-own-lawyer-foolish-barry-zalma-esq-cfe-mbg0c, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.

Acting as Your Own Lawyer is Foolish

Evidence of Breach of Contract Survives Dismissal of All Other Charges

In Lee Lifeng Hsu and Jane Yuchen Hsu v. State Farm Fire And Casualty Company, C. A. No. N24C-09-020 CLS, Superior Court of Delaware (February 27, 2026) a claim to State Farm who paid approximately $61,000 after assessments but denied coverage for additional items including ceramic tiles, the kitchen floor ceiling, underlayment plywood, and numerous personal property items resulted in suit by the Hsu’s acting in pro per.
Facts

Lee Lifeng Hsu and Jane Yuchen Hsu (“Plaintiffs”) purchased a homeowners’ insurance policy from State Farm Fire...

00:07:28
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12 hours ago
Portable Storage Containers are not Buildings

Insurance Condition Requires Following the Intent of the Parties

Post number 5307

Principles of Contract Interpretation Compels Reading Contract as Written

Read the full article at https://www.linkedin.com/pulse/portable-storage-containers-buildings-barry-zalma-esq-cfe-fkg1c and at https://zalma.com/blog.

In Eastside Floor Supplies, Ltd. v. SCS Agency, Inc., Hanover Insurance Company, et al., No. 2024-01501, Index No. 609883/19, 2026 NY Slip Op 01488, Supreme Court of New York, Second Department (March 18, 2026)

In May 2019, a fire damaged business personal property belonging to the plaintiffs, which was stored in portable storage containers at their Manhattan premises. At the time of the fire, the plaintiffs were insured under a businessowners insurance policy (BOP) issued by the defendant Hanover Insurance Company which provided general coverage for business personal property, and which included a specific extension for “Business Personal Property Temporarily in Portable Storage Units” (the portable storage ...

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12 hours ago
Failure to Provide Well-Pled Facts Defeats Most of Action

ERISA Saves Fraudulent Claims Suit

Post number 5306

Read the full article at https://www.linkedin.com/pulse/failure-provide-well-pled-facts-defeats-most-action-zalma-esq-cfe-b4zuc and at https://zalma.com/blog plus more than 5300 posts.

Allegations of Fraudulent Insurance Billing Must be Pleaded with Specificity

In Genesis Laboratory Management LLC v. United Healthcare Services, Inc. and Oxford Health Plans, Inc., No. 21cv12057 (EP) (JSA), United States District Court, D. New Jersey (March 13, 2026) Genesis Laboratory Management LLC (“Genesis”), a New Jersey-based molecular diagnostic and anatomic pathology laboratory, provided COVID-19 related testing services and submitted claims for reimbursement as an out-of-network provider to United Healthcare Services, Inc. (“United”) and Oxford Health Insurance, Inc. (“Oxford”). Metropolitan Healthcare Billing, LLC (“Metropolitan”), owned by the same individual as Genesis, handled the billing for Genesis.

FACTUAL BACKGROUND

United and Oxford, who administer both ERISA and ...

post photo preview
March 19, 2026
Failure to Provide Well-Pled Facts Defeats Most of Action

ERISA Saves Fraudulent Claims Suit

Post number 5306

Read the full article at https://www.linkedin.com/pulse/failure-provide-well-pled-facts-defeats-most-action-zalma-esq-cfe-b4zuc and at https://zalma.com/blog plus more than 5300 posts.

Allegations of Fraudulent Insurance Billing Must be Pleaded with Specificity

In Genesis Laboratory Management LLC v. United Healthcare Services, Inc. and Oxford Health Plans, Inc., No. 21cv12057 (EP) (JSA), United States District Court, D. New Jersey (March 13, 2026) Genesis Laboratory Management LLC (“Genesis”), a New Jersey-based molecular diagnostic and anatomic pathology laboratory, provided COVID-19 related testing services and submitted claims for reimbursement as an out-of-network provider to United Healthcare Services, Inc. (“United”) and Oxford Health Insurance, Inc. (“Oxford”). Metropolitan Healthcare Billing, LLC (“Metropolitan”), owned by the same individual as Genesis, handled the billing for Genesis.

FACTUAL BACKGROUND

United and Oxford, who administer both ERISA and ...

post photo preview
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