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32 Tort & Ins. L.J. 653 (1996-1997)
Excess Liability Insurance: Law and Litigation

handle is hein.journals/ttip32 and id is 693 raw text is: EXCESS LIABILITY INSURANCE: LAW AND LITIGATION
Scott M. Seaman and Cbarlene Kittredge
Excess insurance contracts often are called catastrophe coverage because insureds
purchase excess insurance to protect themselves against the rare catastrophic event.
Traditionally, premiums for excess insurance were very low as excess insurers
anticipated not having any involvement in defending the insured, minimal claims
handling, and rarely, if ever, being called upon to indemnify the insured for a
settlement or judgment. Seldom did an excess insurer provide any loss control
services to insureds. Measured against the universe as it existed before the late
1970s, excess insurers took considerable comfort in high attachment points
within their insureds' coverage programs.
Since the mid-1980s, however, the importance of excess insurance and the
role of excess insurers as active participants in coverage litigation have grown
exponentially, owing to a myriad of factors. The first set of factors relate to
the nature of the insurance market. More excess insurance contracts have been
issued as commercial and professional insureds purchase excess coverage as part
of comprehensive risk management programs. Additionally, some excess insurers
have become more involved in the day-to-day handling of claims due to a variety
of factors, including the increased use of self-insured retentions employed by
insureds to control the defense of claims and to reduce costs associated with
primary insurance.
The second set of factors concerns the increased exposures of the insureds.
Substantive law changes produced additional bases for liability in various areas of
the law, including product, professional, and environmental liability. Further, civil
litigation has become characterized by high jury verdicts, a deep pocket mentality,
Scott M. Seaman is a partner and Cbarlene Kittredge an associate witb tbe firm of Bates Meckler
Bulger & Tilson in Chicago, Illinois. The authors thank John ]. Duffyfor his assistance in preparing
this artick. The views expressed in this artick are the opinions of the authors and not necessarily
those of the firm or its clients.

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