In a case of first impression, the Pennsylvania Superior Court has ruled that, unless explicitly stated otherwise, a reinsurer’s policy limit does not cap defense costs.
In Century Indemnity v. OneBeacon Insurance, a three-judge panel of the court upheld a Philadelphia trial judge’s ruling that OneBeacon Insurance, the reinsurer, was on the hook for defense expenses incurred by its reinsured above and beyond the limit established in the “Reinsurance Accepted” section of its facultative certificates.
