ACE is listed on the New York Stock Exchange and has numerous American stockholders. However, many of ACE Limited's officers and directors, who are not US residents, might be immune from civil liability under US Securities laws designed to ensure corporate accountability. This is a significant benefit of the ACE board's decision to reincorporate in Switzerland during 2008.
Auto Dealer Lawsuit Claims ACE Changed Terms of Policy
A Texas auto dealer claims an erroneous change to a renewed liability policy from ACE American Insurance Co. left it open to a half million dollar judgment in a separate auto collision lawsuit.
Between 2004 and 2007, Group 1 Automotive Inc. bought ACE-issued insurance for garage operations at the 100-plus auto dealerships that it operates. The coverage was brokered by Arthur J. Gallagher Risk Management Services Inc. A section of the policy said that a customer of a dealership would be considered insured by the ACE policy only if he had no other insurance, and that it would be provided only to the minimum mandated by state law, which in Mississippi is $25,000.
On October 30th, 2005, Group 1 and Gallagher agreed that the broker would provide it with professional insurance services for a two-year period. In that respect, in 2006 Gallagher negotiated with ACE to renew Group 1’s garage liability policy. Group 1 said it did not authorize Gallagher to make any changes to the policy. According to the complaint, however, a definition of “who is an insured” was changed from that stated on two previous policies from ACE.
This change was noted only after May 21st, 2007, when Nathaniel Fortson went to Pat Peck Nissan, a Group 1 dealership located in Gulfport, Mississippi, and reportedly bought a 2007 Nissan Altima. Fortson had the Altima added to his mother’s auto insurance policy.
Within two hours of leaving the dealership, Fortson rear-ended a vehicle driven by Donna Ray. Paperwork relating to the sale could never be found and in 2013, after Ray sued Fortson for damages, a Mississippi state court judge determined that title to the car never passed from Pat Peck to Fortson. Ray was awarded $557,291 in damages, with Group 1 being held liable due to the slight language change in the terms of the policy.
Group 1 has now sued Gallagher and ACE, charging them with “negligent drafting” of the 2006 policy renewal. They allegedly breached their professional duties of care and competence by failing to properly identify Group 1 as an auto dealership in the policy’s declarations pages.
Group 1 said it is entitled to reform the ACE policy to have it comply with previous policies, which would thus extend the insurer’s coverage to the Ray award.
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