In a recent decision by the Pennsylvania Federal Court involving a coverage dispute between two insurance carriers over underlying asbestos suits, U.S. District Judge Berle M. Schiller ordered that internal documents must be turned over despite arguments that they are covered by a protective order and involve proprietary information. Judge Schiller reasoned that a protective order would prevent any propriety information from being publicly disseminated.

The ruling stems from a case involving the Walter E. Campbell Co. (“WECCO”), whose primary and excess insurance policies were issued by St. Paul Fire & Marine Insurance Co. (“St. Paul”). After being continuously sued in asbestos-related lawsuits, WECCO sought coverage from its several insurers. Many of St. Paul’s policies with WECCO were reinsured by R&Q Reinsurance Co. (“R&Q”), and in 2013 St. Paul requested approximately $4.5 million to cover the WECCO underlying asbestos claims through the reinsurance policies. However, R&Q denied coverage because of St. Paul’s untimely notification of the claims’ accrual. R&Q deemed the untimely notification a violation of its contract requiring prompt notification of occurrences that may trigger coverage. R&Q argued that the claims were made roughly 10 years after St. Paul began paying out on WECCO claims. R&Q awaits information and documents from St. Paul that will help identify exactly when St. Paul began making payments related to the asbestos claims and when they notified their other reinsurers of these claims. Judge Schiller held that the “proprietary” documents are relevant as to R&Q’s allegations that they were untimely notified of the loss, and that St. Paul should be required to produce this information. For more information about the decision, please see R&Q Reinsurance Co. v. St. Paul Fire and Marine Insurance Co., case number 2:16-cv-01473, in the U.S. District Court for the Eastern District of Pennsylvania.

CMBG3 Law’s attorneys have worked with national and international insurance companies and insureds on a wide variety of coverage issues in state and federal courts over the years. If you have any questions or would like more information, please contact Seta Eskanian (email her or 617-936-4353, ext. 209).