Hunton Retail Law Resource

In late May 2017, the American Law Institute met to approve the Proposed Final Draft of the first ever Restatement of the Law, Liability Insurance—the culmination of over seven years of work on this project. Not surprisingly, many of the issues discussed in the Restatement have been hotly contested by insurers. The proposed Restatement is important for retail industry insureds because courts around the country may look to this new Restatement in ruling on common insurance coverage disputes arising out of product liability actions, recalls and environmental contamination. For example, some of the most hotly debated sections of the proposed Restatement include, (1) policy interpretation principles, such as when a term is deemed ambiguous; (2) the standard for determining the insurer’s duty to defend; (3) the insurer’s duty to make reasonable settlement decisions; and (4) the allocation of liability in long-tail environmental claims.