4 Insurers, 5 Policies to Pay $73M Sandy Hook Settlement Against Gunmaker Remington

By | February 17, 2022

A federal bankruptcy court in Alabama has approved insurance payments totaling $73 million by four insurers to the families of the victims of the Sandy Hook massacre. The settlement with gunmaker Remington Arms and its companies, which are now in Chapter 11 bankruptcy, was announced yesterday.

At the time of the shooting, four insurers had a total of five policies in effect on Remington Arms and its companies. The four insurers sharing in the settlement payout to the families of the shooting’s victims are Ironshore (a Liberty Mutual subsidiary), James River Insurance Co., ACE (now Chubb), and North American Capacity Insurance Co. (Swiss Re Corporate Solutions America Insurance Corp.).

According to the court, the total stated limits of these five policies is $76 million. However, James River previously paid $2.5 million on a different related claim, reducing the potentially available limits to $73.5 million.

In addition, as part of the order, James River must reserve $500,000 for a separate suit brought by plaintiff Precious Seguin in the event the U.S. Court of Appeals for the Fifth Circuit affirms the judgment in her favor. If Seguin’s judgment is reversed, then James River will pay the $500,000 to the Sandy Hook families.

Remington’s Insurance Policies According to court documents, four insurers issued a total of five liability insurance policies to one or more of the Remington companies covering the period Dec. 1, 2012 to Dec. 1, 2013, which includes the time when the shooting at Sandy Hook Elementary took place:
  • Ironshore issued a first-layer general liability policy providing limits of $1 million per-occurrence / $3 million aggregate, subject to a $1 million per-occurrence self-insured retention (SIR) and an additional $1 million per-occurrence / $1 million aggregate corridor retention.
  • James River issued a second-layer excess policy providing limits of $10 million, per-occurrence and aggregate, subject to a $1 million per-occurrence SIR.
  • Ironshore issued a third-layer excess policy providing limits of $25 million, per-occurrence and aggregate, subject to a $25,000 per-occurrence SIR.
  • ACE P&C issued a fourth-layer excess policy providing limits of $25 million, per-occurrence and aggregate. The ACE P&C policy does not have an SIR.
  • NAC issued a fifth-layer excess policy providing limits of $15 million, per-occurrence and aggregate. The North American policy does not have an SIR.

Twenty students and six adults were killed on Dec. 14, 2012 in Newtown, Connecticut, by shooter Adam Lanza. Lanza used a Remington Bushmaster AR-15 rifle in the shooting. This settlement involves nine families of five adults and four children who were killed.

The settlement marks the first time a gunmaker has been held responsible for a mass shooting in the country. The plaintiffs’ lawyers took the unusual route of focusing not on Remington’s manufacturing of the gun used but on its marketing. While the federal Protection of Lawful Commerce in Arms Act grants firearms makers immunity from product liability, the plaintiffs argued that law did not apply. Instead, they focused on Remington’s “aggressive and violence-glorifying marketing” of its AR-15s as an unfair trade practice and a violation of Connecticut law. The legal strategy sought to uncover how Remington marketed the AR-15 to “young, violence-prone men.”

The families and their lawyers hope the settlement sends a message to insurers and banks as well as to gunmakers and marketers.

“These nine families have shared a single goal from the very beginning: to do whatever they could to help prevent the next Sandy Hook. It is hard to imagine an outcome that better accomplishes that goal,” said Josh Koskoff, lead counsel and partner at the Connecticut law firm Koskoff, Koskoff & Bieder, which represented the Sandy Hook families. “This victory should serve as a wake-up call not only to the gun industry, but also the insurance and banking companies that prop it up.

“For the gun industry, it’s time to stop recklessly marketing all guns to all people for all uses and instead ask how marketing can lower risk rather than court it. For the insurance and banking industries, it’s time to recognize the financial cost of underwriting companies that elevate profit by escalating risk. Our hope is that this victory will be the first boulder in the avalanche that forces that change.”

In addition to full insurance payouts, the plaintiffs insisted on another condition. The gunmaker must make public thousands of pages of internal documents and depositions that the families say will unveil Remington’s wrongdoing. They claim that the company, driven by parent private equity firm Cerberus, put profits over public safety and changed its previous approach to marketing firearms in favor of an “aggressive, multi-media campaign that pushed sales of AR-15s through product placement in first-person shooter video games and by touting the AR-15’s effectiveness as a killing machine.”

According to Koskoff, an earlier $33 million settlement proposal in July by Ironshore and James River was rejected.

Photo: In this Jan. 28, 2013, file photo, firearms training unit Detective Barbara J. Mattson, of the Connecticut State Police, holds up a Bushmaster AR-15 rifle, the same make and model of gun used by Adam Lanza in the Sandy Hook School shooting. (AP Photo/Jessica Hill, File)

Topics Carriers Connecticut Gun Liability

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Latest Comments

  • February 22, 2022 at 10:17 am
    Tango says:
    Good point. The Second amendment enshrines the rightful place of firearms as the last defender of the natural Freedoms our founders identified as coming from GOD. Cars are a... read more
  • February 21, 2022 at 1:43 pm
    Interested Observer says:
    Article reads as though CGL / Excess tower. For a foreigner, the differences in coverage operation are something I'm still trying to work out.... UK XS tower would almost alwa... read more
  • February 21, 2022 at 9:50 am
    Michael says:
    Well since statistics show that 40% of Americans drink alcohol TOO MUCH....i think it's safe to say that Ford, GM, Toyota, Tesla are marketing DIRECTLY to them!

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