Founded in 1923, the American Law Institute (“ALI”) is one of the important institutions in our society that maintains the rule of law and keeps our legal systems fair and balanced. It is a deliberative body with members, procedural and voting rules that have been developed over many years.  The ALI publishes treatises that judges use for reference when analyzing the cases pending before them. The ALI Restatement series are invaluable tools for courts and law schools throughout the United States.

In 2010 the ALI launched a project to summarize the principles of liability insurance.  After a few years of research, deliberation and initial drafting, it was elevated to a Restatement project. The Restatement of the Law of Liability Insurance is intended to provide courts and litigants with guidance on the standards and rules that come into play when a person or business has been sued and is relying on their insurance company to defend and indemnify them – in other words, get them out of a bad situation. Lawsuits are scary and expensive, and policyholders that have paid for liability insurance have the right to rely on their insurers to defend and indemnify them when they’re the target of a liability claim or lawsuit.

UP Executive Director Amy Bach was appointed to serve as one of the Advisers on the project.  The Advisers included sitting and retired judges, insurance industry counsel, lobbyists and trade association representatives as well as policyholder attorneys and in-house policyholder counsel.  UP worked for many years on this project to ensure that policyholders’ perspectives were being heard during the drafting and deliberations, and that the final Restatement would contain strong protections to ensure that reasonable expectations of coverage will be upheld by courts that use the Restatement.

UP and our allies and volunteers worked hard to counter the many attempts by insurance industry representatives to influence the drafters in their favor.  Insurers primary focus was to convince the drafters to tilt the Restatement to make it easier for them to avoid defending and indemnifying their customers in liability scenarios.  Time and time again UP’s representative reminded the drafters of the leverage advantages insurers already enjoy, and the fact that insurers are continually adding exclusions and reducing the circumstances where they will defend their insureds.  UP’s primary goal was to ensure that the final document would restate the important holdings that preserve policyholders’ reasonable expecations of coverage (defense and indemnity).

After much thoughtful deliberation, (tainted somewhat by political maneuvering by insurance industry lobbyists), the Restatement of the Law of Liability Insurance was adopted and published in 2018. For an analysis of the final product one of UP’s volunteers and allies – Tim Law with Reed Smith – click here.

A tremendous amount of work and debate went into the product.  Yet sadly, despite eight years of hard work by the drafters and advisers and consensus-building among industry and policyholder lawyers, industry advocates launched a last ditch effort to prevent its final adoption and succeeded in convincing ALI management to postpone a vote on the final document for a full year.  These same insurance industry advocates have now launched a national lobbying campaign to convince state legislators to officially reject the Restatement treatise.  

We are disheartened and outraged by this development and will continue working to reverse this foul play.  The CEO of the National Conference of Insurance Legislators, American Family Insurance Company and the Idaho Insurance Commissioner pushed to postpone publication of the final product.  Industry representatives boasted about derailing the Project  Yet industry representatives dominated much of the deliberations, were very well represented on the panel of Advisers and succeeded in influencing the final product in their favor on many fronts.


The American Law Institute’s Restatement of the Law, Liability Insurance: Scholarship and Controversy