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LLOYD'S & INST. OF LONDON v. FULTON

Nos. S-8136, S-8185.

2 P.3d 1199 (2000)

LLOYD'S & INSTITUTE OF LONDON UNDERWRITING COMPANIES, including John Crawley, individually and as Representative on Behalf of Certain Underwriters at Lloyds of London Subscribing to Policy No. BH0150TAA, Excess Insurance Company, Ltd.; London & Hull Maritime Insurance Co., Ltd.; Cornhill Insurance PLC `M' A/C; Insurance Company of North America `GA' (UK) The Prudential Group 9; and The Baltica (UK) `J A', Appellants and Cross-Appellees, v. Christopher FULTON, individually and as assignee of Walter E. Clark, Appellee and Cross-Appellant.

Supreme Court of Alaska.

Rehearing Denied June 27, 2000.

Attorney(s) appearing for the Case

Brewster H. Jamieson and Michael B. King, Lane, Powell, Spears, Lubersky, LLP, Anchorage, for Appellants/Cross-Appellees Lloyd's and Institute of London Underwriting Companies.

Randall E. Farleigh, Farleigh & Shamburek, Anchorage, for Appellee/Cross-Appellant.

Before MATTHEWS, Chief Justice, COMPTON, EASTAUGH, and BRYNER, Justices.

OPINION

BRYNER, Justice.

I. INTRODUCTION

An accident aboard a fishing vessel in the Bering Sea provoked a decade-long dispute between the vessel's owner and its insurers. The case raises two significant questions concerning an insurer's duties toward its insured: Upon discovering potential reasons to deny coverage, must an insurer promptly inform its insured of the problems? And does the insurer estop itself from denying

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