Insurance and Reinsurance Alert: The Supreme Judicial Court of Massachusetts Adopts Pro Rata/Time-on-the-Risk Allocation Rejecting Efforts to Apply an "All Sums" Allocation

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In what can only be described as a major victory for insurers, the Massachusetts Supreme Judicial Court (SJC)—Massachusetts?s highest court—responded to certified questions from the United States Court of Appeals for the First Circuit by rejecting a joint and several (also known as “all sums”) approach to liability allocation for progressive injuries, and instead adopting a pro rata method of liability allocation.1 In addition, the SJC adopted the time-on-the-risk method of prorating liability in the “absence of evidence more closely approximating the actual distribution of property damage.”2 Finally, the SJC concluded that an insured must bear a pro rata share of the losses for all time periods where it was self-insured.3

Please see full alert for more information.

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Mintz Levin on:

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