BERMUDA Law and Practice Contributed by: Oliver MacKay, Michael Frith, Kyle Masters and Jennifer Haworth, Carey Olsen
ence defence strategy, including decisions on coun- sel, settlement, publicity, privilege, information shar- ing, and consistency across related claims. Insurers may respond through claims-control provisions, panel arrangements, early case assessment, and co-ordina- tion across jurisdictions. 7. Geopolitical Factors 7.1 Geopolitical Drivers of Insurance Disputes The Bermuda market continues to monitor the insur- ance consequences of geopolitical conflict and sanc- tions. The war in Ukraine created issues associated with Russian aircraft registered in Bermuda, while sanctions imposed on Russian and Belarusian enti- ties required attention from Bermuda insurers and other financial institutions. These matters may affect coverage, claims handling, payment and regulatory engagement. Canada–USA trade tensions are likely to affect the nature and complexity of Bermuda insurance disputes more than their immediately measurable volume. Tar- iffs and retaliatory measures may increase repair and replacement costs, disrupt integrated supply chains and increase non-payment or default risk – potentially generating disputes under property, business inter- ruption, trade credit, surety, marine, D&O and rein- surance policies, particularly concerning causation, valuation, aggregation and policy limits. Any increase in volume is likely to be concentrated and delayed, and difficult to quantify because many Bermuda insur- ance and reinsurance disputes are resolved through confidential arbitration. 7.2 Sanctions and Payment Challenges Evolving sanctions and restrictions on cross-border payments may delay claims investigation or set- tlement, prevent payment to particular persons or through particular financial institutions, and generate disputes concerning sanctions exclusions, illegality and licensing. 7.3 War, Political Risk and Exclusions Recent global conflicts may test war, terrorism, cyber- war and political-risk exclusions, particularly where causation, attribution or the geographical scope of
an exclusion is disputed. Relevant issues may include whether losses arise directly or indirectly from hos- tilities, state-backed cyber-activity, confiscation, or governmental action. 7.4 Supply Chain and Systemic Loss Events Geopolitical disruption may produce business inter- ruption, contingent business interruption, and marine, aviation, energy and trade-credit losses, together with questions about causation and aggregation. Supply chain instability and energy price volatility may also expose gaps between physical-damage requirements and broader economic loss. 7.5 Forward Outlook and Market Response It is foreseeable that ongoing geopolitical uncertainty will affect risk selection, pricing, limits, exclusions, and claims scrutiny. Bermuda insurers may contin- ue to review sanctions, war, cyberwar, territorial and aggregation wordings and to seek greater information about supply chains and counterparties. 8. Emerging Risks 8.1 Market Overview of Emerging Risks Potential emerging risks include digital assets, licensed cannabis cultivation, cyberperils, AI technologies, and disputes arising from segregated account structures. The Bermuda reinsurance market is also exposed to natural catastrophes, particularly North American hur- ricanes. These developments may create novel cover- age, regulatory and counterparty issues. 8.2 Impact of ESG on Underwriting and Insurance Litigation Bermuda reinsurers are required to consider ESG risk as part of their overall risk-management framework. Climate change risk has been identified by the BMA as a significant financial risk to insurers and financial stability. Insurers are expected to take a proactive and proportionate approach to managing and, where pos- sible, mitigating climate-related risks in underwriting,
operations and investments. 8.3 Data Protection Laws
Since the Personal Information Protection Act 2016 became fully operative on 1 January 2025, Bermuda
39 I NSURANCE L I T IGATI O N 2026
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