If a company did not have insurance for a period of time, does it matter why? Does it matter whether the company did not have insurance because the company chose not to purchase it or because it was not available in the marketplace? In a recent decision, the Court of Appeals answered this question with a resounding no, at least in the context of applying a pro rata allocation to loss arising out of environmental contamination that occurred continuously over a period of years. Keyspan Gas East Corporation v. Munich Reinsurance America, 31 N.Y.3d 51, 73 N.Y.S.3d 113 (2018). In Keyspan, the Court of Appeals rejected the unavailability of insurance exception and held that the policyholder is responsible for loss allocated to periods in which it was uninsured, regardless of whether insurance for the risk at issue was available during the relevant time period.

Keyspan Case Background