{"id":888277,"date":"2016-04-20T10:03:18","date_gmt":"2016-04-20T16:03:18","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=888277"},"modified":"2016-04-20T10:03:18","modified_gmt":"2016-04-20T16:03:18","slug":"california-court-rejects-primary-carriers-excess-other-insurance-position","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/california-court-rejects-primary-carriers-excess-other-insurance-position\/","title":{"rendered":"California Court Rejects Primary Carrier\u2019s Excess Other Insurance Position"},"content":{"rendered":"

Insurance Law Blog | April 12, 2016<\/p>\n

In its recent decision in Certain Underwriters at Lloyds, London v. Arch Specialty Ins. Co<\/em>., 2016 Cal. App. LEXIS 275 (Cal. App. Apr. 11, 2016), the Court of Appeal of California for the Third Appellate District had occasion to consider the application of other insurance clauses in the context of successive primary general liability insurance policies<\/a>.<\/p>\n

Arch and Underwriters insured Framecon under successive primary general liability policies<\/a>: Arch for the period October 28, 2002 to October 28, 2003 and Underwriters for the periods October 28, 2000 to 2001 and October 28, 2001 to October 28, 2002.\u00a0 These were Framecon\u2019s only general liability policies for this three year period.<\/p>\n

Framecon was named as a defendant in a constructive defect lawsuit involving its work on a housing development in California.\u00a0 The suit alleged progressive property damage occurring during all three policy periods.\u00a0 While Underwriters agreed to provide Framecon and an additional insured with a defense, Arch took the position that its defense obligations were excess over Underwriters\u2019.\u00a0 Arch\u2019s position was based on language in its policy\u2019s insuring agreement stating that:<\/p>\n

We have the right and duty to defend you, the Named Insured, against any suit seeking tort damages provided that no other insurance affording a defense against such a suit is available to you.<\/p><\/blockquote>\n

The Arch policy also contained an excess other insurance clause stating that:<\/p>\n

1. Excess Insurance<\/p>\n

 <\/p>\n

This insurance is excess over any other insurance, and over deductibles or self-insured amounts applicable to the loss, damage, or injury, whether such other insurance is primary, excess, contingent or contributing and whether an insured is a named insured or additional insured under said policy.<\/p>\n

When this insurance is excess, we will have no duty under Coverage A or B to defend any claim or suit that any other insurer has a duty to defend.<\/p><\/blockquote>\n

Arch did not contest an indemnity obligation under the policy, and in fact paid a proportional share of the underlying settlement, and it funded its allocable share to settle other similar claims. \u00a0It nevertheless maintained that in light of its policy\u2019s provisions, it had no defense obligations since Underwriters were providing a defense.<\/p>\n

Underwriters subsequently brought an equitable contribution claim against Arch.\u00a0 At the trial court level, Arch was granted summary judgment based on the court\u2019s finding that the other insurance clause relieved its of a duty to defend, reasoning that the Arch policy\u2019s other insurance clause was not a prohibited escape clause because it was contained in the policy\u2019s insuring agreement.<\/p>\n

On appeal, however, the court observed that the purpose of \u201cother insurance\u201d clauses is to prevent multiple recovery by insureds in cases of overlapping policies providing coverage for the same loss, but that public policy disfavors \u201cescape clauses<\/a>.\u201d\u00a0 The court further observed that modern trend in California requires equitable contributions on a pro rata basis from all primary insurers, regardless of their respective other insurance clauses.<\/p>\n

Arch argued that this general case law, and that California jurisprudence disfavoring excess only clauses in primary policies, should be disregarded because the language concerning its defense obligations was in its policy\u2019s insuring agreement rather than as a condition.\u00a0 The court was not persuaded<\/a> by this argument, noting that California case law disfavoring escape or excess other insurance clauses is not premised on whether the language is stated as a condition or as a term of coverage, but instead speaks to a more general public policy concern.\u00a0 As the court explained…<\/p>\n

To finish reading this article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Insurance Law Blog | April 12, 2016 In its recent decision in Certain Underwriters at Lloyds, London v. Arch Specialty Ins. Co., 2016 Cal. App. LEXIS 275 (Cal. App. Apr. 11, 2016), the Court of Appeal of California for the Third Appellate District had occasion to consider the application of other insurance clauses in the… Continue reading California Court Rejects Primary Carrier\u2019s Excess Other Insurance Position<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[30,3],"tags":[4739,3],"class_list":["post-888277","post","type-post","status-publish","format-standard","hentry","category-general-liability-policy","category-insurance-claims","tag-commercial-general-liability-policy","tag-insurance-claims","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nCalifornia Court Rejects Primary Carrier\u2019s Excess Other Insurance Position - 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