New York has adopted a pro-rata allocation methodology for continuous and progressive losses where coverage for all triggered policies is determined on a time-on-the-risk basis. Recently, the New York Court of Appeals in Keyspan Gas East Corp. v. Munich Reinsurance America, Inc., 143 A.D.3d 86 (Appellate Division, September 1, 2016), found that insurance companies were not required to indemnify the insured for those periods in the allocative schedule where liability insurance was unavailable in the marketplace. The question before the court was the following: When the reason for the period of no insurance is that the insured could not have obtained insurance even if it had wanted to, is the risk attendant to the unavailability of insurance in the marketplace allocable to the existing, triggered insurance policies or to the insured?” The court found that because the insurance policies did not provide coverage for injury or damage during periods of no insurance, the court would have to rewrite the insurance policies to require insurers to assume the risk for uninsured periods simply because the insured was not to blame for the lack of insurance. The court chose not to rewrite the terms of the policy for equitable reasons. Therefore, allocation of uninsured periods was assessed to the insured in continuous and progressive loss cases.
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