Insurance Recovery: What Should You Look for?

As insurance lawyers sitting at the heart of the London Insurance Market which itself is at the heart of the global specialist insurance market, life is never dull for the EC3 Legal Coverage team. They get stuck in to really interesting insurance programme review work and (re)insurance claims all over the world. Paul Wordley, Head of the International Insurance and Reinsurance Recoveries Practice says: “Increasingly, clients recognise that their insurance procurement activity has been under lawyered in the past and that they need to invest in a contract legal review before they have a claim.” Below, we speak more with Paul about the insurance world.

What three things must companies consider when looking to seek recovery with insurance?

We would take the approach to ask:

  1. Contract certainty: At placement of insurance and based on an assessment of risk and a client’s risk retention appetite, does the insurance contract, in theory, successfully transfer risk to insurers in a clear and unambiguous way?
  2. Claim certainty: Based on lessons learned from previous claims experience and a stress test of the insurance contract against likely claims scenarios, does the insurance contract actually provide the coverage that the client considers has been procured?
  3. When there is a claim, does the analysis and presentation of the claim reflect how the policy works and reflect the way in which the insurance market will assess and adjust the claim, as this will speed up claim payment?


What are common insurance issues you find companies deal with, and how do you go about tackling such issues?

The most common problems are based on the issues referred to above which is why the team recommend a proactive approach to the procurement of insurance based on a full understanding of what is sought to be achieved and by obtaining legal comfort that the insurance contract works before there is a loss.

Legacy wordings inevitably will have built-in problems that have often been considered too difficult or political to deal with, for example, after a series of mergers. There are still too many cut-and-paste wordings in circulation where the policy is a patchwork of clauses and conditions that don’t always sit together well. Exclusions that are meant to be confined to a particular issue, but with resultant cover for other impacted areas, can often be written in a way to make them absolute exclusions.


How do you tackle litigation when claims are brought to you? What are your initial steps?

This can happen when the insured has decided that a specialist legal team is required or where insurers have already commenced proceedings. In all cases we always review what has been done before our involvement and inevitably, the parties will already be polarised on various material issues for there to be proceedings. Depolarisation is the objective, not litigation, unless there is no alternative. We will check that what is being claimed and litigated over, is actually recoverable under the policy. Whilst we will of course deal with the proceedings, we also look to identify the issues and values involved that have led to this situation and seek commercially to depolarise where at all possible.

Paul Wordley
+44 (0) 203 553 4886

Paul Wordley is Head of the International Insurance and Reinsurance Recoveries Practice at EC3 Legal based in London but with clients all over the world. His particular areas of expertise are in the oil, gas, mining, marine, construction and TMT sectors. Paul has been involved in a number of high-profile international insurance and reinsurance claims in recent years and has also advised on a number of recent major oil, gas and mining claims. He also has significant mediation experience, having represented clients in several successful multi-million-dollar mediations.

EC3 Legal’s insurance and reinsurance recoveries team proudly and resolutely represents clients from all market sectors, including policyholders, brokers, captives, insurers and reinsurers, based nationally and internationally. Its lawyers leverage their hands-on experience of many years in the London Market and knowledge of in-house and global firm culture and imperatives, in seeking cost-effective solutions for clients, whether by negotiation, mediation or arbitration/litigation. Assignments include a broad spectrum of property, liability, specialty, cyber and emerging risks.


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