Gavel-insurance-policy-pen Two recent court cases, a continent apart, may be the beginning of a trend on choice-of-law analysis. (Photo: Shutterstock)

Recently, California and Delaware courts have applied choice-of-law analyses to coverage disputes seemingly to avoid denials of coverage. In Pitzer College v. Indian Harbor Ins. Co., the California Supreme Court held a choice-of-law provision was potentially unenforceable because it violated “fundamental public policy.” In Pfizer Inc. v. Arch Ins. Co. the Delaware Superior Court held Delaware law applied to insurance contracts that did not contain choice-of-law provisions, even though New York law arguably applied.

The outcomes in Pfizer and Pitzer may have been different had the insurers initiated litigation in the forums specified in the contracts. Insurers should be mindful of these decisions and include clear choice-of-law provisions in policies. If a coverage dispute does arise, insurers should be proactive so as to avoid unfavorable forums.

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