Insurer Must Pay Full Annual Limit on Cancelled Policy, 1st Circuit Says

BOSTON - An insurer whose liability policy was cancelled prematurely by an insured must still pay the full annual aggregate limit if the policy language says nothing about requiring proration, the 1st U.S. Circuit Court of Appeals has ruled in an insurance dispute concerning underlying asbestos litigation. OneBeacon Insurance Co. v. Georgia-Pacific Corp., No. 06-1993 (1st Cir.).

The appellate court stated in a Jan. 18 opinion that OneBeacon Insurance Co., as successor to Employers Surplus Lines Insurance Co., cannot complain about harm to it 'caused by its own poor draftsmanship' in the policy and cancellation endorsement language.

Employers had issued …