Insurance
Home›Insurance›Industry & Deals›Delaware court rejects ArcLight unit coverage bid
Delaware court rejects ArcLight unit coverage bid
The court said a Jan. 11, 2022 letter did not amount to a tender by Limetree Bay Holdings, LLC, and found the timing left LBH not sued when the insurer received notice.
A Delaware Superior Court declined to reopen a coverage dispute tied to an insurance policy involving one company in the ArcLight group. Insurance Business reports the court denied a motion for reconsideration filed by the ArcLight Entities on August 13, 2026, upholding the earlier ruling that Limetree Bay Holdings, LLC (LBH) never requested defense coverage and therefore could not recover covered costs under the policy.
The central issue was whether LBH ever formally tendered its claim to Lexington Insurance Co. The ArcLight Entities pointed to a January 11, 2022 letter they said showed LBH was a named insured, but the court found the letter did not request coverage for LBH. The judge noted the letter referred to other specific companies as the ones seeking coverage and that LBH was not included in that group.
Timing also weakened the ArcLight Entities' argument, the court said. The letter went out about 13 months before LBH was sued in the underlying matters, and the court observed that sophisticated counsel would have tendered for companies not yet sued if that was the intent; the court also noted the sending firm did not represent LBH.
The court did not decide every potential notice argument, however. It said its earlier opinion only covered the period up to January 25, 2024, when ArcLight Plaintiffs requested a defense, and because the current suit was filed on November 22, 2024, the ArcLight Entities could still argue the complaint itself gave Lexington notice, though the court left that question open.