BERMUDA Law and Practice Contributed by: Oliver MacKay, Michael Frith, Kyle Masters and Jennifer Haworth, Carey Olsen
Carey Olsen Rosebank Centre 5th Floor 11 Bermudiana Road Pembroke HM8 Bermuda Tel: +1 441 542 4500 Email: bermuda@careyolsen.com Web: www.careyolsen.com
1. Key Drivers and Resolution of Insurance Disputes
also common and the Supreme Court may impose costs consequences where a party unreasonably refuses to engage in ADR. Parties often favour the opportunity for an early commercial settlement rather than formal proceedings, given ADR offers confidenti- ality and often cost benefits, speed, and the preserva- tion of business relationships. 2. Jurisdiction and Choice of Law 2.1 Choice of Law in Insurance Contracts Bermuda’s conflict-of-laws rules for contracts fol- low the traditional English common-law approach. An express choice of governing law will generally be given effect. In the absence of an express choice, the court will seek to identify an implied or inferred choice from the circumstances or – failing that – the system of law with which the contract has its closest con- nection. It is common for parties to Bermuda insurance and reinsurance contracts to select Bermuda law. Sec- tion 11 (2) of the Segregated Accounts Companies Act 2000 further provides that governing instruments relating to segregated accounts are deemed to be governed by Bermuda law. 2.2 Jurisdiction and Forum Selection The Bermuda court will consider whether a defendant can be validly served in Bermuda or has submitted (or agreed to submit) to the jurisdiction of the Bermuda courts, including by contract. Contractual forum- selection clauses are generally approached as part of the parties’ bargain. Where a proposed defendant
1.1 Common Triggers of Insurance Disputes Given that the vast majority of coverage disputes in Bermuda are resolved by confidential arbitration, trends are difficult to identify from reported deci- sions. Noteworthy disputes often arise from Bermu- da-specific insurance structures, including segregat- ed accounts used for rent-a-captive arrangements, insurance-linked securities transactions. and the sep- aration of reserves among business lines. Coverage disputes may also concern contractual interpretation, warranties, exclusions, disclosure and misrepresenta- tion, aggregation, and the attachment of liability. 1.2 Role of Policy Wording and Drafting Insurance and reinsurance contracts are interpreted under the same general principles as other commer- cial contracts. Policy drafting can therefore be central where the parties disagree about the scope of insuring clauses, exclusions, warranties, conditions precedent, aggregation language, or endorsements. Bermuda law also continues to apply the common-law duty of utmost good faith, including duties of disclosure and not to make misrepresentations, subject to any con- tractual modification. 1.3 Dispute Resolution Strategy and Outcomes Arbitration and mediation are the most common forms of ADR in Bermuda. Insurance and reinsurance con- tracts very often incorporate arbitration agreements and confidential arbitration is the prevalent means of resolving substantial insurance disputes. Mediation is
35 I NSURANCE L I T IGATI O N 2026
CHAMBERS.COM
Powered by FlippingBook