WR Berkley Insurance (Europe) Ltd & Ors [2017] EWCA Civ 25 (25 January 2017)

WR Berkley Insurance (Europe) Ltd & Ors [2017] EWCA Civ 25 (25 January 2017)

Payment into escrow under the Payment Deed did not constitute an ascertained loss or trigger the insurers' obligation to indemnify; only actual payments out of escrow to the third party, in accordance with the settlement terms, constitute a loss for insurance purposes.

Citation
[2017] EWCA Civ 25
Parties
Appellant/defendant: WR Berkley Insurance (Europe) Limited; Appellant/defendant: Aspen Insurance UK Limited; Respondent/claimant: Teal Assurance Company Limited
Jurisdiction
England and Wales
Judgment Date
25 January 2017
Procedural Posture
Appeal / Court of Appeal Judgment on Preliminary Issue
Outcome
Appeal dismissed
Legal Topics
Professional Indemnity Insurance, Reinsurance, Construction of Insurance Contracts, Escrow Arrangements, Trigger of Indemnity Liability
Insurance Law Commercial Law Professional Indemnity Insurance Reinsurance Construction of Insurance Contracts Escrow Arrangements Trigger of Indemnity Liability

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Parties

WR Berkley Insurance (Europe) Limited

Appellant/defendant

Aspen Insurance UK Limited

Appellant/defendant

Teal Assurance Company Limited

Respondent/claimant

Procedural Posture

Appeal / Court of Appeal Judgment on Preliminary Issue

Legal Issues

  1. 1 Whether payment into escrow under a settlement agreement constitutes an ascertained loss triggering indemnity under a professional indemnity insurance policy
  2. 2 Whether the insured's liability was established and quantified by the Payment Deed and Escrow Agreement or only upon drawdown by the third party

Ratio Decidendi

Payment into escrow under the Payment Deed did not constitute an ascertained loss or trigger the insurers' obligation to indemnify; only actual payments out of escrow to the third party, in accordance with the settlement terms, constitute a loss for insurance purposes.

Court Disposition

Appeal dismissed

Orders

  • The appeal by the reinsurers is dismissed.