Opinion ID: 903299
Heading Depth: 1
Heading Rank: 3

Heading: sudden and accidental buyback

Text: (A) It is hereby agreed that the above Absolute Exclusion shall not apply provided that the Named Assured establishes that all of the following conditions have been met: ... (4) The occurrence became known to the assured within 72 hours after its commencement. (5) The occurrence was reported in writing to those underwriters within 30 days after having become known to the assured. ... ALL OTHER TERMS AND CONDITIONS REMAINING UNCHANGED. NYMAGIC, Federal, and St. Paul insure the third bumbershoot policy (“Bumbershoot 3”), which provides $40,000,000 over Bumbershoot 2. The second section under the heading “Excess Bumbershoot Liability” in Bumbershoot 3 is titled “Coverage” and reads in pertinent part: The company hereby agrees, subject to the limitations, terms and conditions hereinafter mentioned, to indemnify the Assured in respect of the following: A. All Protection and Indemnity risks of whatsoever nature covered by the underlying Bumbershoot policies. B. . . . Collision Liabilities . . . . C. All other sums which the Assured shall become legally liable to pay . . . in respect of claims made against the Assured for damages of whatsoever nature, on account of: 7 Case: 11-31030 Document: 00512279244 Page: 8 Date Filed: 06/18/2013 No. 11-31030 ... 2) Property Damage . . . . The fourth section under the “Excess Bumbershoot Liability” heading is titled “Conditions” and lists, among other conditions, the following “Notice of Occurrence” condition: Whenever the Assured has information from which the Assured may reasonably conclude that an occurrence covered hereunder involved injuries or damages which, in the event that the Assured should be held liable, is likely to involve this policy, notice shall be sent to the Company as soon as practicable, provided, however, that failure to notify the Company of any occurrence which at the time of its happening did not appear to involve this Policy, but which, at a later date, would appear to give rise to claims hereunder, shall not prejudice such claims. Endorsement #8 attached to Bumbershoot 3 is exactly the same as Endorsement #8 attached to Bumbershoot 2, containing the same “ABSOLUTE POLLUTION EXCLUSION” and “SUDDEN AND ACCIDENTAL BUYBACK” provisions as reproduced in relevant part above. The insurers sought a declaratory judgment that they are not liable for the losses arising out of the allision because Settoon did not meet the requirements in the endorsements, which would have provided the pollution liability excluded by the pollution exclusions. The parties filed cross-motions for partial summary judgment. The district court made three holdings: 1) the umbrella insurers are not liable on the Bumbershoot 2 and Bumbershoot 3 policies because Settoon did not comply with the 72-hour knowledge and 30-day notice provisions in the buybacks; 2) SNIC is liable on the Bumbershoot 1 policy because it delayed delivery of the policy to Settoon; and 3) SNIC is liable for prejudgment interest beginning on the date Settoon made judicial demand. 8 Case: 11-31030 Document: 00512279244 Page: 9 Date Filed: 06/18/2013 No. 11-31030