Massachusetts High Court Denies Rehearing in Case Involving Damages in Long-Tail Claims

Partners from White and Williams’ Philadelphia and Boston Offices Represent Insurance Company

Boston - The Massachusetts Supreme Judicial Court denied the petition for rehearing in a case that was closely followed by insurance practitioners across the country. Boston Gas Company v. Century Indemnity Company presented the Massachusetts high court with the opportunity to address the issue of whether damages in the long-tail context (i.e., for damage that takes place over a long period of time) should be allocated pro rata or jointly and severally.

In its decision originally announced on July 24, 2009, the Court adopted the position of White and Williams LLP's client, Century Indemnity Company, that damages should be allocated evenly across all years in which property damage occurred, in the absence of evidence showing the actual amount of damage occurring during the policy period. The policyholder, Boston Gas Company, then petitioned for rehearing, arguing that Century's other insurance clause contemplated that the policy would cover losses continuing after the policy period.

In its September 21, 2009 order denying the petition, the Court clarified its decision by expressly noting that the Century policies do not express an intention to cover property damage occurring after its policy periods. The decision, which can be found at Boston Gas Company v. Century Indemnity Company, 457 Mass. 337 (2009), is now final.

White and Williams LLP partners Guy Cellucci and Shane Heskin of the Philadelphia office and David Chaffin of the Boston office represented Century Indemnity in this case.