In Ward Sand and Materials Co. v. The Transamerica Ins. Co., A-1479-13T1 (App. Div. 2016), the New Jersey Supreme Court ruled in favor of the insurance industry on the long-contested issue of how to allocate responsibility for losses in claims involving multiple insurance companies, some of which are insolvent.
Beginning in 1970, the plaintiff (Ward) accepted municipal waste from Pennsauken at its sand-mining property. Ward ended up liable to the New Jersey Department of Environmental Protection for the subsequent cleanup. Ward had purchased comprehensive general liability and excess policies for each year from 1970 to 1986 for a coverage total of about $100 million. Ward’s liability at the landfill was $5.5 million. However, Ward only received $1,938,200 from its insurance companies. How could a policyholder that purchased primary and excess insurance in every year receive less than 40 percent from its insurance companies?
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