The trigger for liability coverage - actual liability or reasonable settlement?

On 28 February 2013 judgment was delivered in the case of AstraZeneca Insurance Company Limited v XL Insurance (Bermuda) Limited and ACE Bermuda Insurance Limited [2013] EWHC 349.

In this case the Commercial Court considered the construction of insuring clauses in a Bermuda Form liability policy under English law, for the first time.

The case is of key importance to the basic trigger for coverage under liability insurance and confirms that an insured must demonstrate that it is under an actual legal liability to a third party claimant, as opposed to an alleged or arguable liability, to establish an entitlement to indemnity.

For further analysis and commentary please click here to read the RPC case bulletin.

Alternatively, for the full text of the judgment click here.