{"id":898885,"date":"2021-06-29T14:54:59","date_gmt":"2021-06-29T20:54:59","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898885"},"modified":"2021-06-29T14:55:02","modified_gmt":"2021-06-29T20:55:02","slug":"insurance-policy-can-cover-same-loss","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/insurance-policy-can-cover-same-loss\/","title":{"rendered":"This, That, and the Other: Different Insurance Policies Can Cover the Same Loss"},"content":{"rendered":"\n

Kenneth Gorenberg | Barnes & Thornburg<\/a><\/p>\n\n\n\n

As policyholder counsel, we\u2019re frequently asked which insurance policy<\/a> may cover a particular claim. Sometimes, the answer is not just one but more than one.<\/p>\n\n\n\n

How a Claim Can Be Covered By More Than One Policy<\/strong><\/p>\n\n\n\n

There are several circumstances in which more than one policy may respond to a given claim.<\/p>\n\n\n\n

For example, in compliance with a contract between Companies A and B, Company A may have made Company B an \u201cadditional insured\u201d on a policy carried by Company A. A claim against Company B may thereby be covered by both B\u2019s own policy and the one purchased by A. The same contract may require A to provide a\u00a0certificate of insurance\u00a0to B, identifying A\u2019s policy. That may allow B to provide notice directly to A\u2019s insurance company as well as B\u2019s. Depending on the requirements of the contract between A and B, as well as the policy language and the law in some jurisdictions, B may even be allowed to target its tender to A\u2019s insurer as the only one to cover the claim, leaving B\u2019s own policy essentially untouched.<\/p>\n\n\n\n

Another possibility is that Company X may have purchased more than one policy for itself that potentially covers the same loss. For example, an architectural or engineering firm typically carries both commercial general liability (CGL) and professional liability (PL) (also known as errors and omissions (E&O)) insurance. Depending on the allegations and any facts that may be proven about something that goes wrong on a job,\u00a0both policies may cover the claim. That\u2019s particularly likely if a lawsuit alleges only general negligence rather than professional negligence, even though much of Company X\u2019s work may be considered professional in nature. Company X should consider notifying both its CGL and PL insurers.<\/p>\n\n\n\n

How Multiple Insurance Policies May Interact In Covering a Claim<\/strong><\/p>\n\n\n\n

When more than one policy can cover a given loss, another issue is how the policies interact to determine which insurance company pays what portion or in what order. Many policies actually anticipate this situation.<\/p>\n\n\n\n

In our earlier example regarding Companies A and B, their contract may require that A\u2019s policy will be \u201cprimary and non-contributory.\u201d A\u2019s policy, if it complies with that requirement, probably will have an endorsement that says, in effect, it will cover B up to the dollar limit of A\u2019s policy, and B\u2019s policy does not have to contribute unless A\u2019s insurer paid its entire limit.<\/p>\n\n\n\n

An insurance policy may also contemplate the existence of another policy by including an \u201cother insurance\u201d provision. This clause comes in one of basically three varieties.<\/p>\n\n\n\n