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Insurer May Never Subrogate Against its own Insured\\n\\nZurich American Insurance et al sued their coinsurers - Appellant \\nCertain Underwriters at Lloyd\'s, London Subscribing to Policy Number \\nB12630308616 (Lloyd\'s) and Defendant Arch Insurance Company (Arch) - \\nseeking a declaratory judgment that Lloyd\'s is barred under New York law\\n from bringing a common law indemnification or contribution claim \\nagainst a party insured by Zurich, Arch, and Lloyd\'s.\\n\\nThe district court granted Zurich\'s motion for summary judgment, holding\\n that New York\'s anti-subrogation rule precludes Lloyd\'s from bringing \\nthat claim.\\n\\nIn Zurich American Insurance Company, American Zurich Insurance Company \\nv. Certain Underwriters at Lloyd\'s of London Subscribing to Policy \\nNumber B12630308616, Arch Insurance Company, No. 22-2697, United States \\nCourt of Appeals, Second Circuit (December 12, 2023) the Second Circuit \\nresolved the dispute.\\n\\nMany Layers of Insurance\\n\\nThis dispute arose from a large construction project at LaGuardia \\nAirport. Pursuant to the contract, Skanska and LGA obtained a \\nContractors Controlled Insurance Program for the project, which included\\n a "tower" of general liability insurance with $300 million of coverage \\nin three layers. Zurich underwrote the base layer of coverage, Arch \\nprovided a first layer of excess coverage, and then Lloyd\'s provided a \\nsecond excess policy, i.e. a third layer of coverage on top of Arch\'s.\\nZurich arranged for counsel to represent Port Authority and LGA \\nbeginning in August 2018. Roughly three years later, Lloyd\'s contacted \\nthat counsel and requested that LGA and Port Authority commence a \\nthird-party claim for common law indemnification or contribution against\\n Skanska. Counsel analyzed the feasibility of such a claim but concluded\\n that New York\'s anti-subrogation rule would bar it.\\n\\nThe Anti-Subrogation Rule\\n\\nNew York courts have established an anti-subrogation rule that is an \\nexception to an insurer\'s usual right of subrogation against third \\nparties. It provides that an insurer has no right of subrogation against\\n its own insured for a claim arising from the very risk for which the \\ninsured was covered.\\n\\nThe anti-subrogation rule is needed both to prevent the insurer from \\npassing the incidence of loss to its own insured and to guard against \\nthe potential for conflict of interest that may affect the insurer\'s \\nincentive to provide a vigorous defense for its insured.\\n\\n\\nZALMA OPINION\\n\\nSubrogation is an equitable remedy where, when an insurer pays a debt \\nowed by its insured, fairness requires the insured to provide the \\ninsurer with the insured\'s rights against third parties to recoup its \\npayment on behalf of the insured. Regardless, it is unfair for an \\ninsurer to seek damages from its own insured because doing so violates \\nthe public policy of the state of New York and is, on its face, unfair. \\nWhen two people are in a simple auto accident but are insured by the \\nsame insurer, they will both be paid regardless of who is at fault since\\n the insurer can\'t subrogate against its own insured.\\n\\n(c) 2023 Barry Zalma & ClaimSchool, Inc.\\n\\nPlease tell your friends and colleagues about this blog and the videos \\nand let them subscribe to the blog and the videos.\\n\\nSubscribe to my substack at \\nhttps://barryzalma.substack.com/publish/post/107007808\\n\\n\\nGo to Newsbreak.com\\xa0 https://www.newsbreak.com/@c/1653419?s=01\\n\\n\\nFollow me on LinkedIn: \\nwww.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257\\n\\n\\nDaily articles are published at https://zalma.substack.com. Go to the \\npodcast Zalma On Insurance at \\nhttps://podcasters.spotify.com/pod/show/barry-zalma/support; Go to Barry\\n Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to \\nBarry Zalma on YouTube- \\nhttps://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg;\\xa0 Go to the \\nInsurance Claims Library \\u2013 \\nhttp://zalma.com/blog/insurance-claims-library.