In Dexter v. Cosan Chemical Corp., the Federal District Court for the District of New Jersey recently confirmed that, in the absence of fraud, an insured need only prove the existence and terms of its insurance policy by a preponderance of the evidence. As frequently occurs in environmental insurance coverage actions, neither the insured nor the carrier were able to locate a copy of the insurance policy, which had been issued decades earlier. In a situation where the policy is lost or missing, the insured seeking coverage has the burden of proving the terms and conditions of the policy. An insured may utilize secondary evidence of coverage, for example a policy number, certificates of insurance or policy endorsements to prove the existence and terms of the policy, even though it does not have a copy of the actual policy. While some courts have required the insured to prove a policy's existence and terms by clear and convincing evidence, the District Court confirmed that in New Jersey, a policy need only be established by a preponderance of the evidence. Additionally, the court noted that while each piece of secondary evidence standing alone may be insufficient to prove the terms and existence of a policy, whether a policyholder has met its burden of proof should be based upon the totality of secondary evidence produced. Dexter v. Cosan Chemical Corp., Civ. Action No. 91-5436(DRD) (August 26, 1999).
