Dispute Resolution Under the Bermuda Form

Steptoe has been at the forefront of insurance coverage arbitrations under the Bermuda Form and alternative dispute resolution proceedings involving these mass tort matters.  In the last few years alone, Steptoe has served as lead counsel for insurance companies in multi-party mediations which involved settlement of coverage claims for $1 billion, $600 million, $100 million, and $70 million in losses arising out of four separate blockbuster drugs and/or medical devices.  With sums this large at stake, we are able to mobilize substantial legal manpower and resources to review, synthesize, and employ coverage-related defenses, while drawing on significant international litigation experience to handle arbitrations that often take place in London or Bermuda. 

Our portfolio of matters under the Bermuda Form goes back more than two decades, and includes experience in pharmaceutical litigation and investigation, and in guiding insurance companies based in Bermuda, as well as other global insurance carriers, on a variety of other matters.  We have successfully guided several of the largest insurance companies in the world through insurance coverage disputes and extensive litigation involving the leading drug manufacturers, in matters related to policy wording, and product liability.  As a result, we often reach favorable settlements of claims under English and New York law.

Representative Matters

  • Represented XL Insurance Bermuda (XLIB) in dispute with General Motors’ captive insurer over gas tank explosion product liability.
  • Represented XLIB in rebuffing National Union’s claim for “other” insurance contribution in connection with wildfire liability losses incurred by the common insured, Pacific Gas and Electric Co.
  • Represented underwriter and in-house counsel in negotiation with Merck over manuscript policy wording with respect to multi-line package insurance.
  • Defended XL and other carriers in a Bermuda Form arbitration brought by GSK in relation to coverage for the antidepressant drug Paxil.  The arbitration involved many issues arising out of the policy form, including the “Occurrence” and “Integrated Occurrence” definitions, the “expected or intended” provision and maintenance deductibles, temporal scope of coverage, validity of policy variations, ability of lead insurers to bind following insurers, and the duty of disclosure.
  • Successful settlement in arbitration over insurance coverage for more than 30,000 Vioxx (manufactured by Merck) claims.  Steptoe represented the only major carrier to settle claims, and all remaining carriers lost arbitration and paid full limits.
  • Lead counsel in connection with insurance disputes involving thousands of products liability cases arising out of the use of hormone replacement therapy products.
  • Lead counsel in connection with insurance disputes involving thousands of high-profile products liability suits across the United States arising out of the use of several well-known drugs, including Propulsid and Ortha-Evra (Johnson & Johnson), as well as NuVa Ring contraceptive device (Azko Nobel and Merck).
  • Successful settlement for multiple Steptoe clients in a major dispute involving insurance coverage for thousands of product liability claims arising out of a well-known diabetes drug.  Key coverage issues addressed included the interpretation of unique “Pharmaceuticals Endorsement” in the applicable policies, “expected or intended” application of the “maintenance deductible” under the Bermuda Form, and possible rescission/nondisclosure claims.
  • Lead counsel and lead negotiator in a mediation involving a highly favorable settlement discount, saving insurers hundreds of millions of dollars, related to a major dispute concerning insurance coverage for product liability settlements arising from claims against the use of PoliGrip (GlaxoSmithKline).