Insurance claims often arise long after the expiration of a policy—but that policy may still provide defense and indemnity to the insured. How? If damage first occurred many years after expiration of a policy and the policy is lost or destroyed, the insured can still prove its existence and its contents through “an unsigned copy or by oral evidence.”
This phenomenon has created a unique profession: insurance archaeology, a term that denotes not only recovery efforts for specific lost policies but also broad-based projects to reconstruct and organize historic insurance portfolios. Organizations with significant exposure to long-tail liabilities including asbestos, environmental or product liability claims are likely to need the services of experts in this subfield.
“Occurrence-based” insurance policies live as long as the liabilities that were triggered during the policy period and can provide policyholders with coverage for litigation. In fact, old occurrence policies can be more valuable than current ones because they have fewer exclusions and sometimes contain no aggregate limits.According to most state courts that have ruled on the issue, policyholders liable for environmental damage are entitled to insurance coverage not only under the policy that was in effect at the time when damage was first discovered, but also under every policy in effect during the often decades-long period when damage was silently occurring. If environmental damage occurred over a long period of time, a municipality (or any other party deemed liable for pollution) may be entitled to coverage for both defense and indemnity under multiple, even scores of, insurance policies.
Many organizations have found that managing insurance assets requires constant updating and maintenance. The policyholder that has quick access to its entire insurance portfolio is prepared for the predictably unpredictable challenges of the twenty-first century. Whether the challenge is notifying hundreds of insureds over several decades of toxic tort litigation or environmental actions, dealing with competing claims for the same policy limits from former subsidiaries, or enhancing sale value in a merger or real estate transaction, the return on investment from continually updating a historic insurance audit may prove essential to an entity that has existed for a long time or merged with long-lived businesses. Millions of dollars’ worth of coverage will be preserved and at the ready in the event of a claim or loss.
InsureU iPhone App Helps You Make a Household Inventory
Creating a home inventory is the kind of task we tend to put off. But doing so helps you track exactly what you own and what it is worth, making important insurance decisions easier—not to mention providing priceless information should loss or disaster strike. On its InsureU site, the National Association of Insurance Commissioners (NAIC) offers a free app to make it easy to build a home inventory. The app is geared to both homeowners and renters, and is available for iPhone or Android. To see how it works, click “MyHome Scr.APP.book Mobile App” on the Insure U homepage.
STP publishes the following related guides: