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Contracts Keyed to Dawson
Sphere Drake Ins. Ltd. v. All Am. Ins. Co.
Citation:
256 F.3d 587.Facts
All American is an underwriting companies and Sphere Drake is an insurance company. EIU was a broker acting as Sphere Drake’s agent. EIU entered into reinsurance contracts with All American on Sphere Drake’s behalf. Eventually claims were made on seven of these policies and a dispute arose regarding which party should pay the losses. The policies provided for arbitration of any disputes arising between Sphere Drake and All American. However, Sphere Drake claimed that EIU did not have authority to enter into the contracts because it only had authority to bind Sphere Drake up to an annual limit of risks and these policies exceeded such limits.
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Defenses to Formation