Over the course of more than half a century, starting in the 1930s, Grumman operated naval aircraft manufacturing and testing facilities on Long Island in Calverton and Bethpage. In the mid-1990s, as demand for military aircraft and related defense industry products decreased, Grumman was purchased by Northrop (now Northrop Grumman) and the facilities on Long Island were closed and redeveloped. The former operations, however, left behind environmental contamination at the Calverton facility, the Bethpage facility and a park site within the Bethpage facility, each of which has been the subject of investigation and remediation operations over the last couple of decades. These cleanup operations have in turn led to insurance disputes between Northrop Grumman and its insurers.
On Nov. 4, 2013, Judge Katherine B. Forrest of the Southern District issued a lengthy Opinion and Order in Travelers Indemnity v. Northrop Grumman which addresses several important issues including the scope of the insurer’s defense obligation where only some claims are potentially covered, reporting of claims in the context of consecutive claims-made policies and late notice of claims and occurrences.1
Allocation of Defense Costs
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