In Deepwater Now: Texas Supreme Court Weighs in on Additional Insured Issues

I absolutely love this story on the Fifth Circuit asking the Texas Supreme Court to consider the scope of insurance coverage for claims arising out of the Deepwater Horizon oil spill loss; the case itself is fascinating as well. The reason is that insurance coverage law is an odd little area, in that massive numbers of decisions in that area are issued each year, and yet most do little more than move the chains a little bit in terms of refining or redefining the law in this area. This point is well-illustrated, for those of you who like support for a proposition, by Randy Maniloff’s on-going series of excellent coverage newsletters, aptly titled Coverage Opinions, which details the continuing flow of judicial decisions in this area.

At the same time, though, the history of insurance coverage law is written in big letters, by the big dollar cases that bring out the best lawyers and arguments that the industry and the policyholder bar have to offer; it is these cases that drive the development of the case law in new directions, and often rewrite the framework in which insurance coverage disputes are analyzed and decided for the next few decades. It was the big money exposures of asbestos and Superfund – issues now so old that they could have been referenced in a retro-movie like Argo, in the same way it featured rotary phones to add period authenticity - that gave rise to much of the case law that currently governs most disputes over trigger and allocation. Likewise, the issues at the heart of the Deepwater Horizon coverage dispute are additional insured and coverage for contractual indemnity obligations that have been floating around insurance coverage law for the entire length of my career, with often inconsistent results; a major decision in a high profile case like Deepwater Horizon is almost certain to reframe those discussions for many years going forward.