The Second Circuit on Monday upheld a CNA unit's win, agreeing with a New York federal judge that a shipping company failed to establish the terms of a lost policy that would cover the $4.6 million settlement of claims by 47 seamen who said they suffered asbestos-related injuries.
The three-judge panel said in an unpublished summary order that reproductions of related policy information from years bookending a policy issued by CNA unit Continental Insurance Co. to the United Nations Relief and Rehabilitation Administration, or UNRRA, were not enough to prove coverage for Cosmopolitan Shipping Co.
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Raymond A. Mascia Jr., a shareholder at Anderson Kill PC's insurance recovery group who represents policyholders, told Law360 that the case is "a classic example of the insurance industry taking advantage of the difficulties that policyholders face in missing policy cases."
Mascia said the issues surrounding premiums and reporting deadlines were not relevant since Cosmopolitan established that Continental sold it the policy at issue.
"The insurance company has the burden of proving its policy limits, since that is a limitation on coverage," he said. "So, the insurance company should have construed any inconsistency in the policy limits in favor of coverage."
Mascia also expressed concern that the insurance industry will improperly use the ruling in other cases involving missing policies.
"Because insurance companies are in the business of selling insurance, they should have the burden of maintaining the insurance policies and should not try to impose improper burdens on their policyholders in missing policy cases," he said.
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