Bermuda Form

Category: Liability insurance · Reviewed by the Apex broking team · Last reviewed 2026-08-22 · ~5 min read

Origin

The form dates from the liability insurance crisis in the United States in the mid-1980s, when capacity for high-level general liability cover largely disappeared in the face of mass tort litigation. Large policyholders, working with brokers, capitalised new Bermuda-domiciled insurers to write the cover the traditional market would no longer provide: ACE, established in 1985 to write very high excess layers, and XL, established in 1986 to write the layer beneath. The wording those companies used, and its successive revisions, became known collectively as the Bermuda Form.

Its origin explains its shape. It was drafted for catastrophic, long-tail, US-centred liability exposures, by and for sophisticated parties, with deliberate design choices intended to keep coverage disputes out of the US courts.

The occurrence-reported trigger

The Bermuda Form is neither a conventional occurrence policy nor a conventional claims-made one. Cover attaches where an occurrence is reported to the insurer during the policy period, with the occurrence itself having to have taken place after a specified retroactive point. That hybrid is why practitioners describe the trigger as “occurrence reported”.

Layered onto it is the integrated occurrence, sometimes called the batch feature. Where a series of related injuries or damage arises from a common cause — the classic example being a mass tort involving a single product — the policyholder may elect to treat them as one occurrence notified in a single policy year. That has two effects: it gives the policyholder a coherent way to notify a rolling exposure, and it prevents limits being stacked across multiple years for what is in substance one event.

The policy is also structured as a continuous contract with successive annual periods rather than as a fresh contract each year, which affects how notice, retroactive dates and limits interact across renewals.

Governing law and the modifications

The choice-of-law clause applies the internal laws of the State of New York, but not unmodified. The standard form excludes the application of New York law to the extent it would prohibit payment in respect of punitive damages, and to the extent it constitutes regulation under the New York Insurance Law. It also directs that the policy be construed in an even-handed fashion, without regard to authorship and without the application of contra proferentem.

Those modifications are substantive, not cosmetic. Much of the policyholder-favourable US coverage jurisprudence rests on doctrines of construction against the drafter and on state regulatory rules; the Bermuda Form deliberately disapplies them. An English-qualified reader should therefore not assume that familiar English canons of construction apply either — the applicable law is New York law as modified, applied by an English-seated tribunal.

London arbitration

Disputes are referred to arbitration in London. The procedure is ad hoc rather than institutional, conducted under the framework of the English Arbitration Act 1996, with a tribunal typically comprising party-appointed arbitrators and a chair. Proceedings are private, and awards are generally not published, which is why there is comparatively little public authority on Bermuda Form wordings despite the sums involved.

The combination is unusual and intentional: New York substantive law, English procedural law, a London seat, and confidentiality. It was designed to give insurers the predictability of a developed body of liability law without exposing them to US juries, and to give both sides a neutral forum.

Where it fits in a programme

A Bermuda Form policy sits high in an excess liability tower, above substantial underlying general liability and often above other excess layers. Attachment points are measured in tens or hundreds of millions. The buyers are large multinationals with US products, pharmaceutical, chemical, energy or industrial exposures — not the mid-market UK commercial buyer.

For a UK business, the relevance is usually indirect: as part of a global programme placed alongside local admitted policies; as the layer sitting above a captive retention; or as the wording encountered when a group acquires a US-exposed business. The important practical point is that a Bermuda Form layer will not read like the English-law liability wordings beneath it, and the differences in trigger, notice and law are exactly the ones that decide claims.

Why it matters

The Bermuda Form matters because it is the wording that governs some of the largest liability recoveries in the world, and because almost every assumption a UK broker or risk manager carries over from an English-law liability policy is wrong on it. Notice obligations are trigger conditions rather than administrative steps. Aggregation is elective and structural. The governing law is foreign and modified. And the dispute forum is arbitral and private, so there is no accumulated public case law to reason from. Any business that has a Bermuda Form layer in its tower should have specialist advice on it before a notification is made, not after.

Frequently asked questions

Is the Bermuda Form claims-made or occurrence-based?

Neither in the conventional sense. It is an occurrence-reported form: the occurrence must take place after a retroactive point and be reported to the insurer during the policy period, and the policy operates as a continuous contract across annual periods.

What is an integrated occurrence?

It is the mechanism allowing a series of related injuries or damage with a common cause to be treated as a single occurrence notified in one policy year. It gives a coherent way to notify mass claims and prevents limits being stacked across several years for one underlying event.

Which law governs a Bermuda Form policy?

The internal laws of New York, modified so as to exclude rules prohibiting payment for punitive damages and rules constituting regulation under the New York Insurance Law, and to require even-handed construction without regard to authorship and without contra proferentem.

Why are Bermuda Form disputes arbitrated in London?

The form contains an arbitration clause providing for ad hoc arbitration seated in London under the English Arbitration Act 1996. The combination of New York substantive law and an English seat was chosen to give a neutral, private forum outside the US court system.

Related entries

• Bermuda insurance market
• Bermuda reinsurance market
• Public liability insurance
• Lloyd’s of London
• Fronting insurer

This entry is part of the Apex Insurance Wiki. This entry states the position as at August 2026. It is insurance information, not legal advice. Last reviewed 2026-08-22. Next review: 2027-02-22.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.