UK Court Considers Whether Later Conduct Stemming From A Loss Event Should Be Considered A Loss Under An Excess Of Loss Reinsurance Policy

This case considers an appeal against an arbitration award concerning whether health claims from persons involved in cleaning up the 9/11 World Trade Center site should be considered to be multiple claims or should be aggregated as losses or liabilities arising from the terrorist event. The underlying health claims were submitted by workers who became ill after they were not provided respirators or "properly trained" in the conduct of cleanup of debris from the World Trade Center site. The court described the claims as "a single event disassociated from the negligence which gave rise to the underlying liability claims." The appeal described the issue on appeal as being: "Where the insured's liability arises as a result of a continuing state of affairs (the failure to provide a safe system of work and equipment to multiple workers, working in disparate places over an extended period) is this to be treated as "a single event" of negligence or does the relevant event only arise when the harm giving rise to the insured's liability occurs?"

The arbitrators concluded that the health claims could be aggregated under the applicable reinsurance contract and that the reinsurers would bound to indemnify with respect to paid health claims. The...