Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Excess insurers to pay BASF defense costs

Reprints

CHICAGO--A jury award of more than $159 million in favor of chemical giant BASF A.G. stands after a federal district judge earlier this month rejected appeals by the chemical giant's excess insurers against the June verdict.

The U.S. unit of Ludwigshafen, Germany-based BASF filed suit against Federal Insurance Co., Great American Assurance Co., and International Insurance Co.'s liability successor for not meeting its defense obligations when a company purchased by a BASF subsidiary--Boots Pharmaceuticals Inc.--was sued for allegedly dishonest advertising, according to Alan Martin, a Chicago-based attorney with Mayer, Brown, Rowe & Maw L.L.P., which represented BASF.

Specifically, the drug company was accused of claiming there were no adequate alternatives to Synthroid, a synthetic thyroid hormone, and that studies revealing otherwise were false. Suits, which were later consolidated into a class action, were filed mostly by consumers in 1996 and 1997, according to Mr. Martin. The consumers claimed they had overpaid for their medication and that a generic alternative was available.

BASF in 2000 settled the class action suit for $98 million and subsequently sued its insurers for damages, legal costs and interest, according to legal documents.

On June 1, a federal jury in Chicago ruled that the umbrella and excess insurers must pay BASF more than $159 million. The award follows a similar suit against BASF's primary insurers for more than $50 million.

U.S. District Judge Samuel Der-Yeghiayan denied all motions challenging that verdict on Oct. 3.