Claims Management

Arrowood Insurance Company: Proof of Claims Explained

Ben Pariser

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The liquidation of Arrowood Indemnity Company represents a critical moment for policyholders, particularly those with environmental and injury-related claims. As a runoff entity responsible for managing long-tail liabilities, Arrowood’s insolvency has left many policyholders facing uncertainty.

This article focuses on the proof of claims process, a crucial step for those seeking to recover losses from policies held by an insurance company in liquidation. We will provide a comprehensive guide on navigating this process, explaining the importance of historical policy identification and the possibilities for success when you correctly handle the proof of claims process.

Arrowood Indemnity and the Liquidation Process

Arrowood Indemnity Company was initially established to manage the runoff liabilities of Royal Sun Alliance’s U.S. insurance operations and has played a significant role in handling complex long-tail liabilities, including environmental and injury-related claims. However, in November 2023, Arrowood was declared insolvent, leading to its liquidation by order of the Delaware Court of Chancery. This insolvency was primarily driven by the accumulation of significant legacy claims and the emergence of new liabilities, which overwhelmed the company’s financial resources.

For business owners with policies through Arrowood, this liquidation has significant implications. To recover any potential compensation, policyholders must file a proof of claim. The deadline to submit these claims is May 15, 2025. Missing this deadline could mean losing the chance to recover losses, making it essential to understand and act on the proof of claims process. Navigating this process correctly is critical for you and other creditors to protect your business’s financial interests before Arrowood’s liquidation.

What is a Proof of Claim?

A proof of claim is a formal process that policyholders must go through when an insurance company goes out of business and enters liquidation. When an insurer becomes insolvent, it first goes into a phase known as receivership. During this time, the insurance company informs policyholders that they have a limited window to file claims to recover any owed compensation. If a claim is not submitted before the specified deadline—known as the bar date—policyholders lose their chance to receive any reimbursement for their losses.

In the case of Arrowood Indemnity’s liquidation, filing a proof of claim is essential for any policyholder who wishes to secure compensation for a wide range of losses. These claims could cover various scenarios, including but not limited to:

  • Environmental Damage: Claims related to contamination, pollution, and other environmental liabilities that may have caused harm to property or required cleanup efforts.
  • Injury-Related Losses: Claims arising from personal injury, including long-term health effects due to exposure to hazardous materials or accidents covered under the insurance policy.
  • Property Damage: Claims for damages to buildings, infrastructure, or other physical assets insured by Arrowood.
  • Business Interruption: Losses incurred due to the inability to operate a business following a covered event, such as a natural disaster or other disruptive incidents.
  • Product Liability: Claims related to injuries or damages caused by defective products insured under an Arrowood policy.
  • Asbestos-Related Claims: Given Arrowood’s history with long-tail liabilities, claims related to asbestos exposure are particularly relevant.
  • Professional Liability: Claims involving errors, omissions, or other liabilities from professional services covered under Arrowood’s policies.

How to Navigate the Proof of Claims Process Step-By-Step

Navigating the proof of claims process during an insurance company’s liquidation can be complex. To ensure your claim is processed and accepted, it’s crucial to follow a structured approach. Below is a step-by-step guide to help you through this process.

1. Identify the Relevant Policy

Start by locating the insurance policies issued by Arrowood relevant to your claim. These policies outline the scope of coverage and specify what types of claims can be filed. Given the age of some policies, this step might involve searching through old records or working with experts to help locate these documents.

2. Compile Supporting Evidence

Once you’ve identified the appropriate policy, gather all necessary documentation to support your claim. The required evidence will depend on the nature of the claim but generally includes:

  • Policy Documentation: Ensure you have copies of the relevant insurance policies to demonstrate coverage.
  • Proof of Loss: Collect evidence such as repair estimates, medical reports, environmental assessments, or expert testimonies that substantiate your claim.
  • Historical Evidence: For long-tail liabilities like environmental damage or asbestos exposure, historical records and documentation that trace the origin of the liability are essential.
  • Legal Documentation: Include any legal filings, court orders, or judgments related to the claim.
  • Witness Statements: Obtain statements from individuals who can attest to the claim’s validity, whether it involves property damage, personal injury, or other covered losses.

3. Submit the Proof of Claim Form

After compiling your documentation, complete the proof of claim form provided by the court-appointed liquidator. This form requires detailed information about your claim and must include all supporting evidence. It’s critical to ensure that this form is filled out accurately and submitted before the January 15, 2025, deadline to avoid losing the opportunity to recover any compensation.

4. Follow Up

Once you’ve submitted your proof of claim, you must follow up on the process. Keep track of any additional documentation or information that might be required. Stay informed about the liquidation proceedings and communicate with the liquidator to ensure your claim is processed efficiently and without unnecessary delays.

The Importance of Historical Policy Identification for Environmental Claims

One of the most significant challenges in filing a proof of claim is locating the relevant insurance policies. These policies, often issued decades ago, can be challenging to find due to various factors like changes in ownership, loss of records, or the length of time that has passed since they were initially issued. Policyholders may need to sift through old files, contact previous insurers, or even engage specialists to track these essential documents.

Despite these challenges, older environmental liability insurance policies, such as those issued by Arrowood, can be precious. These policies often offer broader coverage terms than what is available in newer policies, making them critical for addressing modern claims related to environmental liabilities.

If needed, Restorical Research can assist you in uncovering historical insurance policies. With extensive experience tracking old insurance records, even in the most challenging circumstances, we help identify the right policies so that you can file comprehensive proof of claims and maximize potential recovery.

Case Study: Securing Compensation for a Major Parking Lot Operator

Our client, a prominent commercial parking facility management company, owned many parking lots across various locations. Arrowood Indemnity had insured these facilities for many years, covering a range of potential liabilities, including environmental issues. When Arrowood went into liquidation, it became essential for the client to assess which properties might be eligible for claims under the existing insurance policies.

The primary challenge was not the presence of environmental issues but the need to thoroughly analyze all the facilities to identify any that had been polluted. This task required a detailed review of each property’s environmental history, combined with an understanding of how these conditions could trigger coverage under the policies issued by Arrowood. With Arrowood in liquidation, it was crucial to quickly and accurately determine which properties could be included in a proof of claim before the filing deadline.

Restorical Research comprehensively analyzed the client’s entire portfolio of parking facilities. We identified locations with documented environmental issues, such as soil or groundwater contamination, that could qualify for claims under the Arrowood policies. Once these sites were identified, we prepared and filed the proof of claims on behalf of the client. Our efforts ensured the client could seek substantial compensation for the polluted properties, maximizing their potential recovery before Arrowood’s liquidation.

Why Choose Restorical Research for Arrowood Proof of Claims

Restorical Research has a proven track record of handling complex environmental claims, especially in the context of insurance liquidations like Arrowood’s. Our deep expertise in environmental liability and insurance law enables us to navigate the intricate details required for filing comprehensive proof of claims. We offer a full range of services, from identifying historical insurance policies to analyzing property portfolios for potential claims, ensuring that every avenue for recovery is explored. Our approach is tailored to each client’s unique situation, whether you’re managing a large portfolio or a single complex site, ensuring that every claim is accurately and efficiently filed to maximize recovery.

Receive The Compensation You Deserve Before It’s Too Late

The liquidation of Arrowood Indemnity presents a critical opportunity for policyholders to recover potential losses, but this opportunity is time-sensitive and requires meticulous attention to detail. Filing a proof of claim is an essential step that must be completed by the May 15, 2025 claim deadline. Policyholders must act quickly to ensure their claims are recognized when dealing with environmental damages, injury-related losses, or other liabilities.

If you are a policyholder affected by Arrowood or the liquidation of any other insurance company, now is the time to take action. Restorical Research is here to assist you with every step of the proof of claims process, from identifying potential claims to filing the necessary documentation. Contact us today to ensure that your rights to compensation are fully preserved and that your claims are submitted before the deadline.

We are not attorneys, this is not legal advice. 
Author

Ben Pariser

One of Ben’s favorite parts of insurance archeology is knowing Restorical is making a difference, helping to clean up the environment one polluted property at a time while also changing people’s lives.

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