Do historic insurance assets cover current liabilities, and if so, to what extent?  This is the root question in any insurance coverage resolution. However, in answering it, a host of new questions arise, such as:

  • Which policies are on the risk for which liabilities?
  • Can different claims be covered by the same policy?
  • How does local/state law affect potential coverage?
  • How do we allocate “long-tail” claims spread over numerous years as well as one-time events?
  • What are the options for resolution: claim submission, coverage-in-place agreements, policy commutation or other?

Insurance Allocation is the fulcrum around which answers to these questions are made clearer. LLM uses sophisticated tools to model the allocation of liability claims against the existing insurance coverage block.  Because of the nature and number of variables involved, the number of alternative assumptions and potential allocation scenarios can multiply very quickly. Therefore, LLM works closely with our clients and counsel to define appropriate scenarios and then uses our tools to allocate claims to insurance coverage applying these alternate assumptions, including:

  • Allocation/Exhaustion Methodology: All Sums/Pro-rata, By Layer/Level, Owens-Illinois, Wellington, “Hopscotch”Definition of “Occurrence”
  • Trigger Theory: Exposure, Manifestation, Injury-in fact, Continuous
  • Self insured Retentions (SIRs), Deductibles and “Stacking”
  • Exclusions: Pollution, Asbestos, Owned Property, etc.
  • Product and Aggregate Limits
  • Uninsured Periods: Prior Exhaustion, Coverage Gaps, Insolvencies/Run-off

Once these allocations are generated, we work with clients to mold the numerous results into a finite set of “weighted outcomes”. This reduces the often overwhelming amount of data inherent in this process to a codified set of results that our clients can understand, digest, and utilize to make solid, informed decisions for their business goals. LLM works hard to provide independent, objective analyses for our clients regardless of their situation, and we are not married to any particular outcomes.