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Vol. 3, Iss. 9
June 4, 2014


ALI Annual Meeting: Update On The “Principles Of The Law Of Liability Insurance”


The American Law Institute held its annual meeting in Washington, D.C. on May 19-21. One of the items on the agenda was a membership vote on approval of certain sections of the ALI’s “Principles of the Law of Liability Insurance.” If you are not familiar with the ALI’s Principles Project, you need to be. It is the most talked-about subject today in liability coverage circles. If you do not believe that the Principles Project has real-world importance, I respectfully disagree. Click here to get some background on the ALI’s Principles Project.

The Reporters on the Project (i.e., quarterbacks) are Professors Tom Baker of the University of Pennsylvania Law School and Kyle Logue of the University of Michigan Law School. I reached out to Professors Baker and Logue to see what took place at the ALI’s meeting concerning the Principles Project and what’s in store for the Project going forward.

They informed me that the ALI membership approved all of the remaining sections of Chapter 2 without amendment (in general, involving various issues concerning the duty to defend and reservations of rights), authorizing them to make a few editorial changes as discussed at the annual meeting.  They will be making those relatively small changes to the draft in the coming weeks, and the resulting revised version of Tentative Draft Number 2 will be publicly released later this summer.  That Revised Tentative Draft No. 2 will remain the operative, approved and citable version of Chapter 2 until it goes through a final round of revisions once the remaining chapters are complete. 

The Reporters anticipate working with their Advisers and the Members Consultative Group on Chapter 3 -- General Principles Regarding the Risks Insured (which includes allocation and contribution; exclusions; conditions; insuring clauses; and application of limits and deductibles) -- for the next year, with the goal of submitting a complete draft of Chapter 3 to the ALI Council for their approval in Fall 2015, and then to the membership in May 2016.  If all goes according to plan, Chapter 4 will be submitted to the Council and the Annual Meeting in 2017.  

I realize that if you are not familiar with the Principles and the process involved then all of this sounds like Swahili (except to those who speak Swahili). But if you are familiar with the Principles Project, or become familiar, which I hope you will, then the scheduled outlined by the Reporters has meaning to you or will.

Sorry for the inside baseball report. But for more information about the ALI’s Principles of the Law of Liability Insurance, click the above link or do an internet search.

 
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