The American Law Institute (ALI) gained membership approval at its 2016 annual meeting for Tentative Draft No. 1 of the Liability Insurance Restatement project. Chapters 1 through 3 are included in the recent approval process.

liability insuranceThe Restatement covers contract law in regard to liability insurance, coverage issues, and the management of insured liabilities.

The Liability Insurance Restatement, which started in 2010, was known as “Principles of the Law of Liability Insurance” prior to October 2014.

Chapter 1. Basic Liability Insurance Contract Rules.

Insurance policy interpretation, waiver, estoppel, and misrepresentation are addressed in the 11 sections contained within Chapter 1.

Chapter 2. Management of Potentially Insured Liability Claims.

This chapter includes sections 12 to 34 relating to the right to defend, the duty to defend, confidentiality, conduct, reimbursement for the costs of defense, and related provisions.

Chapter 3. General Principles Regarding the Risks Insured.

Chapter 3 addresses topics relating to three primary areas: coverage provisions; conditions; and the application of limits, deductibles and retentions.

Chapter 4. Enforceability, Remedies (including for bad faith), and, tentatively, Broker Liability.

Chapter 4, the final chapter in the Restatement, remains in the process of review.

Background on the American Law Institute

The American Law Institute is the leading independent organization in the United States producing scholarly work to clarify, modernize, and otherwise improve the law.

ALI serves as a leader and coordinating research organization for a number of projects and publications, including Restatements of the Law, Principles of the Law, the Model Penal Code, and the Uniform Commercial Code (with the Uniform Law Commission).

A Restatement project, according to ALI, is intended to clarify uncertainty in the law in a way that guides judges and lawyers in their application of the law.

Other Restatements include but are not limited to Children and the Law, Consumer Contracts, Copyright, Property, Torts and Trusts.

About Insurance Expert Bill Hager

Bill Hager is a former Commissioner of Insurance (Iowa), First Deputy Commissioner of Insurance and Assistant Attorney General (assigned on a full time basis to the Department of Insurance). He is a past member of the executive committee of the National Association of Insurance Commissioners (“NAIC”).

Mr. Hager has extensive and substantive experience in interpreting insurance policy language and determining the insurer’s obligations under such policies.

Click on the link to read more about Bill Hager’s insurance expertise.


Material for this article was taken from a collection of industry sources relating to the subject.

In all of the general statements here, see the state law of the controlling jurisdiction. Every case is different and circumstances vary widely depending on the governing state law, policy provisions, and related considerations.

This blog is provided for educational purposes only. It is not intended to provide legal advice or an opinion in regard to any topic discussed. The blog should not be used as a substitute for legal advice from a licensed attorney in your state.