In a decision that benefits policyholders, the Oregon Court of Appeals said yesterday that Lamb-Weston allocation principles are merely used to decide responsibilities between insurers, and do not limit an insurer’s responsibility to its insured up to the full policy limits. The case is Cascade Corporation v. Employers Reinsurance Corp. Read the decision here.
In cases in Oregon and elsewhere in which damages span multiple policy periods and involved multiple insurers, some insurers have taken the position that Lamb-Weston gives them the right to limit both their indemnity and defense obligations to a pro rata share of the total available limits. This decision repudiates that thinking.
Hat tip to my BPM colleague and fellow coverage litigator Brian Talcott for calling my attention to the case.