Jenner & Block

"Insurance Coverage and the Subprime Crisis: A Broad Overview," Coverage, Newsletter of the American Bar Association Committee on Insurance Coverage Litigation, Vol. 18, No. 4

In this article, Partners Matthew L. Jacobs and Lorelie S. Masters and Associate Daniel I. Weiner examine the series of financial disruptions that have come to be known collectively as the “subprime meltdown,” provide an overview for the possible causes of the crisis, and outline some of the specific litigation trends emerging in the wake of the impariment of the subprime real estate market.  In addition, the authors discuss the applicable types of insurance coverage that are likely to protect individuals and entities involved in various mortgage lending and securitization processes as well as review several potential defenses that carriers may raise to limit their coverage obligations. The article concludes with a discussion of insurance issues of importance to covered individuals and entities — duty to defend, severability, and default — that are likely to play significant roles in this context.