Excess Insurance Does Not Drop Down When Primary Goes Belly Up

Insolvency of a primary insurer represents a tremendous cause for concern for the next layer of excess and umbrella insurers. The Court of Appeals for the Tenth Circuit issued an important and favorable ruling for excess and umbrella insurers last month in Canal Insurance Company v. Montello, Inc., Civil Action No. 14-5039, 2015 U.S. Lexis 20625 (10th Cir. Nov. 27, 2015). The insured, Montello, Inc., a distributor of oil-drilling products, distributed a “viscofier” – a mud drilling liquid agent –
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Below Limit Settlement Obliterates Excess Coverage

In Martin Resource Management Corporation v. AXIS Insurance Company, an excess insurer was held by the United States Court of Appeals for the Fifth Circuit to have no obligation to indemnify its insured under the terms of its excess insurance policy after the insured settled with its primary insurer for an amount below the primary policy limits. The insured had sought coverage from both its primary and excess policies for the cost of defending underlying litigation in Texas state court.
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Read the Fine Print: Contingent Coverage is Not Excess Coverage

In Bartowiak v. Underwriters at Lloyd’s, London, 2015 IL App (1st) 133549 (August 31, 2015), the Illinois Court of Appeals ruled that the defendant-insurer did not have a duty to defend or indemnify the plaintiff in underlying wrongful death action pursuant to a contingency liability policy. On October 31, 2009, a truck delivering road-resurfacing material struck and killed a road-construction worker. The decedent’s wife sued the truck driver, the trucking company, and the truck broker. The truck driver had a
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Mississippi District Court Finds Other Insurance Provisions Cancel Each Other Out

In EMJ Corp. v. Hudson Specialty Ins. Co., (2015 U.S. Dist. LEXIS 29781, 14-15, N.D. Miss. Mar. 11, 2015) the plaintiffs, EMJ Corporation and Westchester Fire Insurance Company, brought this declaratory judgment action against Defendant Hudson Specialty Insurance Company. They were seeking a declaration that Westchester was entitled to contribution from Hudson Specialty for the amount Westchester paid on behalf of EMJ in a settlement of an underlying personal injury action. In partially granting the defendant’s motion for judgment notwithstanding
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Missouri High Court Allows Excess Insurer To Proceed with Bad Faith Refusal to Settle Claim Against Primary Insurer

In Scottsdale Insurance Co. v. Addison Insurance Co., No. SC93792, 2014 Mo. LEXIS 335 (Mo. Dec. 9, 2014), the Supreme Court of Missouri reversed the trial court’s grant of summary judgment in favor of United Fire & Casualty Company (United Fire) with regard to the bad faith refusal to settle claim asserted by Wells Trucking, Inc. (Wells Trucking) and Scottsdale Insurance Company (Scottsdale). The underlying dispute arose from an automobile collision involving a truck driver employed by Wells Trucking that
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Claim Against Vehicle Owner Key to Umbrella Coverage for Auto Loss Caused by Permissive Driver

In this insurance coverage action, Allstate  appealed from an order granting summary judgment and determining that a permissive user of a motor vehicle was covered under Allstate’s  umbrella policy. In August 2007, Alana Proctor, the permissive driver of a vehicle owned by Neil Seiden, collided with Melanie Manzo-Pianelli. Seiden had an insurance policy with State Farm that provided $100,000 in coverage and an umbrella policy with Allstate that provided $1,000,000 in coverage. State Farm tendered its policy limits to Pianelli,
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New Jersey Federal District Court Sheds Light on “Use of Motor Vehicle” Standard in New Jersey Omnibus Statute

In Carolina Casualty Insurance Co. v. Travelers Property Casualty Co., Civ. No. 09-4871, 2014 U.S. Dist. LEXIS 150002 (Oct. 22, 2014), the United States District Court for the District of New Jersey interpreted the “use of a motor vehicle” standard under New Jersey’s omnibus motor vehicle insurance statute in finding coverage under a commercial auto policy.  The decision represents a liberal and broad interpretation of commercial auto policies triggering coverage – even where none arguably exists – for public policy
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Excess Insurer May Recoup Settlement Payments from the Primary Insurer

In RSUI Indemnity Co. v. American States Insurance Co., No. 14-30033, 2014 U.S. App. LEXIS 18407 (5th Cir. Sept. 25, 2014), the Fifth Circuit Court of Appeals held no adjudicated excess judgment is required for an excess insurer to recoup settlement payments from the primary insurer whose alleged bad faith failure to defend the common insured caused the excess settlement. In the underlying action arising from an automobile collision, counsel retained by the primary carrier, American States Insurance Co. (ASIC),
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Allstate Owes Primary Coverage To AI Due To Silent “Other Insurance” Provision

In this insurance coverage dispute the plaintiff, Valley Forge Insurance Company (VFI,) sought a declaration that the defendant, Allstate, was an insurer for and was obligated to defend and indemnify Granite Construction (Granite), on a primary basis with respect to an underlying construction-related lawsuit. Granite entered into a subcontract agreement with RISA Management (RISA).  Pursuant to the agreement, RISA was required to procure Comprehensive Automobile Liability Insurance, naming Granite as an additional insured. The subcontract also stated that any other
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