High Court Reasons that Global Umbrella Policy Does Not Drop Down

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Flexsys America LP v XL Insurance Company Ltd

[2009] EWHC 1115 (Comm) (20 May 2009)

The policyholder maintained that it exhausted its $1M limits under a primary policy issued by XL in Ohio. It then claimed tan XL global policy, with limits of $25M and subject to U.K. law, should apply to cover remaining expenses and claims. The court found that the "drop down" of excess policy was subject to a determination of whether the primary policy would apply to the particular claim. The excess insurer was not precluded from asserting that the claims should not be covered under the primary policy. The court was persuaded that the claims against the policyholder were not covered and therefore determined that the global policy should not drop down.

Download Flexsys America Decision

Posted by Sharon Angelino and Joanna Roberto