Cap Applies to Reinsurer’s Liability for Defense and Expenses, N.Y. Federal Judge Reiterates

ALBANY, N.Y. — A New York federal judge has denied Utica Insurance Co.’s motion to reconsider his ruling that the “limits of liability clause” contained in two facultative reinsurance certificates expressly limit Clearwater Insurance Co.’s liability to $5 million and $2.5 million, respectively, for an underlying asbestos settlement.

On July 23, Judge Gary L. Sharpe of the U.S. District Court for the Northern District of New York reiterated that the language of the clause clearly establishes absolute limits on the reinsurer’s liability and caps its overall liability for both defense and expenses.

Between 1978 and 1982, Utica issued four consecutive …