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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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September 05, 2025
Interpleader Helps Everyone Potential Claimant to Insurance Proceeds

Interpleader Protects All Claimants Against Life Policy and the Insurer

Who’s on First to Get Life Insurance Proceeds

Post 5184

See the full video at https://lnkd.in/gyxQfnUz and at https://lnkd.in/gAd3wqWP, and at https://zalma.com/blog plus more than 5150 posts.

Go to X @bzalma; Go to Barry Zalma videos at Rumble.com at https://lnkd.in/gRthzSnT; Go to Barry Zalma on YouTube- https://lnkd.in/g2hGv88; Go to the Insurance Claims Library – https://lnkd.in/gwEYk.
Interpleader Protects All Claimants Against Life Policy and the Insurer

In Metropolitan Life Insurance Company v. Selena Sanchez, et al, No. 2:24-cv-03278-TLN-CSK, United States District Court, E.D. California (September 3, 2025) the USDC applied interpleader law.
Case Overview

This case involves an interpleader action brought by the Metropolitan Life Insurance Company (Plaintiff-in-Interpleader) against Selena Sanchez and other defendants (Defendants-in-Interpleader).

Key Points

Plaintiff-in-Interpleader’s Application:

The Plaintiff-in-Interpleader...

00:06:34
September 05, 2025
Demands for Reasons for Termination not a “Claim”

A Claim by Any Other Name is not a Claim
Post 5182

It is Imperative that Insured Report Potential Claim to Insurers

Read the full article at https://lnkd.in/gfbwAsxw, See the full video at https://lnkd.in/gea_hgB3 and at https://lnkd.in/ghZ7gjxy, and at https://zalma.com/blog plus more than 5150 posts.

In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.

Case Background:

This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...

00:08:22
September 04, 2025
Demands for Reasons for Termination not a “Claim”

A Claim by Any Other Name is not a Claim
Post 5182

It is Imperative that Insured Report Potential Claim to Insurers

Read the full article at https://lnkd.in/gfbwAsxw, See the full video at https://lnkd.in/gea_hgB3 and at https://lnkd.in/ghZ7gjxy, and at https://zalma.com/blog plus more than 5150 posts.

In Jeffrey B. Scott v. Certain Underwriters At Lloyd’s, London, Subscribing To Policy No. B0901li1837279, RLI Insurance Company, Certain Underwriters At Lloyds, London And The Insurance Company, Subscribing To Policy No. B0180fn2102430, No. 24-12441, United States Court of Appeals, Eleventh Circuit (August 25, 2025) the court explained the need for a claim to obtain coverage.

Case Background:

This appeal arises from a coverage dispute under a Directors & Officers (D&O) insurance policy. Jeffrey B. Scott, the plaintiff-appellant, was terminated from his role as CEO, President, and Secretary of Gemini Financial Holdings, LLC in October 2019. Following his termination, Scott threatened legal action against Gemini, and ...

00:08:22
September 03, 2025

Barry Zalma: Insurance Claims Expert Witness
Posted on September 3, 2025 by Barry Zalma
The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit

© 2025 Barry Zalma, Esq., CFE

When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.

On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...

post photo preview
September 03, 2025
Barry Zalma, Esq., CFE Insurance Claims Expert Witness

The Need for a Claims Handling Expert to Defend or Prove a Tort of Bad Faith Suit
© 2025 Barry Zalma, Esq., CFE

When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.

On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive and became a consultant and expert witness for lawyers representing insurers and lawyers ...

post photo preview
September 03, 2025
Evidence Required to Prove Breach of Contract

APPRAISAL AWARD SETS AMOUNT OF DAMAGES RECOVERED FROM INSURER

Post 5180

See the full video at https://rumble.com/v6yd2z0-evidence-required-to-prove-breach-of-contract.html and at https://youtu.be/2ywEjs3hZsw, and at https://zalma.com/blog plus more than 5150 posts.

It’s a Waste of Time to Sue Your Insurer if You Don’t Have Evidence

Evidence Required to Prove Breach of Contract

Read the full article at https://www.linkedin.com/pulse/evidence-required-prove-breach-contract-barry-zalma-esq-cfe-rfelc, see the full video at https://rumble.com/v6yd2z0-evidence-required-to-prove-breach-of-contract.html and at https://youtu.be/2ywEjs3hZsw, and at https://zalma.com/blog plus more than 5150 posts.

It’s a Waste of Time to Sue Your Insurer if You Don’t Have Evidence

In Debbie Beaty and Jonathan Hayes v. Homeowners Of America Insurance Company, No. 01-23-00844-CV, Court of Appeals of Texas, First District (August 26, 2025) Debbie Beaty and Jonathan Hayes filed a claim under their homeowner’s insurance policy with Homeowners of ...

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