Current through Register Vol. 46, No. 43, October 23, 2024
Section 71.4 - Separate defense limit(a) A liability insurance policy that provides for payment of legal defense costs under a separate defense limit, as specified in subdivision (b) of this section, may be issued or renewed in this State.(b) The policy shall provide coverage for pollution liability or environmental impairment and shall be issued or renewed to an owner or operator of underground storage tanks in order to satisfy the financial responsibility requirements promulgated by the Federal Environmental Protection Agency.(c) The policy shall provide that: (1) There shall be a per claim liability limit, and there may be an annual aggregate limit, subject to the following minimum limits: Type of insured | Monthly facility throughput (gallons) | No. of tanks | Minimum limits |
Per claim | Annual aggregate |
Petroleum Nonmarketer | 10,000 or less | 100 or less | $ 500,000 | $1,000,000 |
10,000 or less | 101 or more | $ 500,000 | $2,000,000 |
10,001 or more | 100 or less | $1,000,000 | $1,000,000 |
10,001 or more | 101 or more | $1,000,000 | $2,000,000 |
Petroleum Marketer | N/A | 100 or less | $1,000,000 | $1,000,000 |
N/A | 101 or more | $1,000,000 | $2,000,000 |
(2) The per claim liability limit and any annual aggregate limit shall not be reduced by the payment of legal defense costs.(3) The separate defense limit shall: (i) apply to each claim in an amount at least 50 percent of the per claim liability limit applicable to such claim;(ii) for policies without an annual aggregate limit, apply to all claims in an amount no less than the per claim liability limit; or(iii) for policies with an annual aggregate limit, if the insurer simultaneously offers the insured the option of purchasing a separate defense limit in an amount at least 50 percent of the annual aggregate limit, apply to all claims in an amount equal to the greater of 25 percent of the annual aggregate limit or $500,000.(4) If the per claim liability limit or any annual aggregate limit becomes exhausted, the insurer shall pay no further defense costs even if the separate defense limit has not been exhausted.(d) If legal services insurance is a part of the policy, then the separate defense limit may not be reduced by greater than 25 percent.N.Y. Comp. Codes R. & Regs. Tit. 11 § 71.4