Cedent Wins Breach Of Contract Claim Against R & Q Reinsurance


A Wisconsin federal district court granted summary judgment in favor of plaintiff, Employers Insurance Company of Wausau, and against its reinsurer, R&Q Reinsurance Company, on Employers’ claim that R&Q breached its agreement by failing to pay Employers for those claims paid Employers to its insureds. R&Q unsuccessfully maintained that Employers could not combine its indemnity payments and defense expenses and that it should have calculated the defense expenses using the ratio terms provided on the certificate of insurance. The Court disagreed, finding that the reinsurance agreement did not distinguish between indemnity and defense expenses, which were covered under the agreement, such that Employers was not required to calculate the defense expenses differently from the way it calculated the indemnity payments. The court also rejected R&Q’s argument that Employers had failed to produce sufficient evidence to demonstrate that its payments exceeded the retention amount. The court found that R&Q’s argument was precluded by R&Q’s failure to present contrary evidence on summary judgment where a party must do more than speculate that other evidence supporting its case may exist. The court did, however, find a factual issue existed as to the calculation of prejudgment interest and denied Employer’s motion for summary judgment accordingly. Employers Insurance Company of Wausau v. R&Q Reinsurance Company, Case No. 13-cv-709-bbc (USDC W.D. Wis. July 28, 2014).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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