Back to the whirlpool for the money
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THE MANY Gooda Walker names who spent last night celebrating their estimated pounds 500m victory over their Lloyd's agents may find there is not enough money to pay their compensation.
Many of the victorious names - including Conservative MPs Paul Marland and David Tredinnick, Buster Mottram, the tennis star, and Freddie Laker - will be significantly contributing to their own award.
The award money is supposed to come from errors and omissions underwriters - insurers who agree to cover company directors or professionals against negligence claims. The Lloyd's agents who lost yesterday's High Court action will have bought cover from other insurers on whom the financial burden of the names' losses will now fall.
But most Lloyd's analysts doubt whether there is enough money in the E&O pot to pay damages of pounds 500m, or anything like it. Even worse for names, the policies that will now be called on to pay the losses have nearly all been written, initially at least, by Lloyd's syndicates.
Some of these syndicates will have reinsured their liability outside Lloyd's. But in the crazy whirlpool world of reinsurance, many of these non-Lloyd's insurers will, in turn, have reinsured their liability back inside Lloyd's.
Indeed some of Gooda Walker's own E&O insurance has been written by Gooda Walker syndicates. According to the broker's line slip - which breaks down risk between syndicates - Gooda Walker syndicate 164 has directly taken on liability for up to pounds 10m of any damages awarded to names. Other Gooda Walker syndicates have reinsured eight of the 20 syndicates most exposed to paying damages to Gooda Walker names.
Michael Payton, a solicitor representing Lloyd's E&O underwriters, said: 'We think Gooda Walker names may well be no better off as a result of this judgment than they would have been if they accepted the Lloyd's global settlement offer last February.'
The amount of E&O cover available is a secret closely guarded by the underwriters. Charles Sturge, the Chatset analyst, estimates the total cover available is about pounds 250m - well short of the expected award.
But there is still one group of people from whom names could make good any shortfall in the damages paid by their agents' insurers - the syndicate auditors. And most auditors have E&O cover written outside Lloyd's.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments