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The Fourth Circuit Clarifies Who Is A Direct Supplier Under Contingent Business Interruption Coverage

In Millennium Inorganic Chemicals, Ltd. v. National Union Fire Ins. Co. et al., — F.3d. — , 2014 WL 642993 (4th Cir., Feb. 20, 2014), the United States Court of Appeals for the Fourth Circuit recently clarified who constitutes a direct supplier of goods and services under contingent business interruption (CBI) insurance, and it specifically rejected arguments that the undefined term “direct” in the coverage grants of the CBI endorsements at issue was ambiguous in nature. The policyholder, Millennium Inorganic Chemicals, Ltd., processed titanium dioxide at its facility in Western Australia, using natural gas that it received via a pipeline.  It purchased the gas from Alinta Sales Pty Ltd., a retail gas supplier.  Alinta, in turn, purchased the gas it

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Posted in Ambiguity, Business Interuption, Contingent Business Interruption, Explosion
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For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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