For decades, Louisiana law maintained that insurers who had a duty to defend their policyholders must defend the entire lawsuit—including in long-latency cases, Business Report details in a new feature in the current issue.
In other words, your defense attorney was on the case—at the insurance company’s expense—even if some of the alleged actions took place outside the window of the active liability insurance policy.
But this bedrock notion of once-in, all-in has been shattered.
The Louisiana Supreme Court, in a September 2016 ruling in Arceneaux v. Amstar Corp., turned years of well-established state law on its head, holding that “duty to defend” in long-latency disease cases should be prorated based on the number of years the insurance company was providing coverage. The ruling is almost certain to have a significant impact on the cost of doing business in the state.
The decision has created a legal upheaval. “All these insurance companies will be trying to decide how they’re going to pay for their percent and the insured is still in the middle of defending the suit,” says Kean Miller business insurance group attorney Mark Mese. “There are too many cooks in the kitchen. It’s going to get messy.”
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