Wiggin and Dana Successful in Appeal of Professional Liability Insurance Coverage Issue

June 25, 2013

On behalf of Lexington Insurance Co. (a unit of AIG), Wiggin and Dana successfully argued an appeal before the Connecticut Supreme Court, which accepted the appellate argument that a professional liability policy insuring a nursing home had an aggregate limit of $1 million, and not the $10 million found by the trial court, for coverage of multiple claims asserted against the home in a policy year.

The case involved construing the limits of Lexington's coverage for claims arising from 13 deaths and serious injuries in a major nursing home fire in Hartford in 2003. The trial court had interpreted the policy terms as providing $10 million in coverage limits for all the claims in the aggregate, but the Connecticut Supreme Court reversed. The Court agreed with Lexington that the policy's reference to a $10 million limit was a cap on coverage for all claims arising from seven different nursing home locations listed in the policy, but that a different $1 million aggregate limit in the policy instead applied to professional liability claims asserted by nursing home residents or their estates arising from a single location. At the same time, the Connecticut Supreme Court agreed with the claimants that the policy provided up to $500,000 of coverage for each of their claims (in excess of the nursing home's $250,000 self-insured retention per claim), construing the term "related" in the policy as not permitting treating the 13 claims arising from one fire as a single incident. Nevertheless, the total coverage for the 13 incidents is subject to the $1 million aggregate limit.

The Wiggin and Dana team that successfully represented Lexington Insurance Co. in the appeal was led by Jeffrey R. Babbin and Michael Menapace.

See Lexington Insurance Co. v. Lexington Healthcare Group, Inc., 309 Conn. 1 (June 18, 2013).