Insurers argued over how to group together losses from cancelled events due to Covid-19. They wanted a mini-trial on a specific part of the insurance contract. The judge said no, because even if they won the mini-trial, the other side might appeal and cause more delays. Therefore, a full trial was scheduled to solve everything at once.
Key Facts
- •Claimant seeks indemnity under two multi-line excess of loss reinsurance treaties.
- •Claim relates to contingency losses from event cancellations due to Covid-19 measures in seven jurisdictions.
- •Defendants made payments exhausting their share of Layer 1 limits.
- •Dispute centers on aggregation of losses: whether the 'contingency event definition' applies to the limits language and whether the Covid-19 measures constitute a single 'event'.
- •Defendants sought a preliminary issue trial on the 'contingency event definition' issue.
- •Claimant opposed, arguing witness evidence was needed.
Legal Principles
Contractual interpretation
Common law of contract interpretation
Outcomes
The application for a preliminary issue trial was refused.
While a preliminary issue trial could save time if the defendants won, the risk of delay from a potential appeal following a loss by the defendants was too great. The court found that the 'contingency event definition' issue was highly arguable and that the necessary evidence was largely documentary, limiting the need for extensive witness testimony. A ten-day trial encompassing all issues was scheduled for January 2026.