Union Carbide Corp. v. Affiliated FM Ins. Co.
(NY App. December 15, 2009)
A commercial policyholder sought a declaration that the stated aggregate limits of liability for multi-year excess policies apply on an annual basis. Each of the excess policies contained a declaration that specified a dollar amount as the "limit of liability" and states that the limit applies to each occurrence and "in the aggregate." The policyholder contended that, because the excess policies are silent as to whether the limit of liability is annualized, the court must look to the underlying policy due to the "follow form" clause. Rejecting this argument and finding in favor of the insurers, the New York appellate court held that "[a]s the phrase ‘in the aggregate’ is unambiguous, it is of no moment that the excess policies do not contain language elaborating on the phrase that expressly negates in annualization."
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