Zenith Insurance Co. v. Employers Insurance of Wausau

DIANE P. WOOD, Circuit Judge.

This case is about information: information that does, or should, flow from a primary insurance company to a reinsurer. Employers Insurance of Wausau (‘Wausau”) issued an “umbrella” Commercial General Liability (“CGL”) insurance policy to one of its clients, and it then reinsured part of its exposure under that policy with Zenith Insurance Company (“Zenith”). When the client enlisted Wausau to defend against a tort action, Wausau handled matters on its own, not notifying Zenith even of the existence of the case until after the jury had returned a whopping verdict…