Courts Address All Sums Coverage Allocation Debate

In 2016, the New York Court of Appeals delivered a long-awaited victory for policyholders facing asbestos and environmental claims spanning multiple years of liability coverage. In In re Viking Pump, Inc., the Court of Appeals rejected the insurance companies’ argument that “pro rata” allocation applies and instead adopted the “all sums” rule based on policy language. Viking Pump relied on the “non-cumulation” and “non-cumulation and prior insurance” provisions in the policies, finding that “pro rata allocation is inconsistent” with provisions that expressly acknowledge that a loss also could be covered by a policy in a prior year.

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