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25 Mar, 2016

Primary v. Excess Carrier – Duty to Notify

2018-05-24T21:04:14-06:00March 25th, 2016|Claim Notice, Excess and umbrella policies, Midwest Insurance Law Guide|

The question for today, Dear Readers, is whether a primary carrier has a duty to notify an excess carrier of a loss that could potentially be covered by the excess carrier's policy.   Of course you know, from our multiple and engaging discussions before, that the terms of the policy are what control the duties, obligations and  actions of the insurers and the insured.  So we should go straight to the insurance policy to [...]

16 Jul, 2014

BAD FAITH BETWEEN PRIMARY & EXCESS CARRIER:

2018-04-23T20:59:42-06:00July 16th, 2014|Bad faith, Excess and umbrella policies, Midwest Insurance Law Guide|

What is the burden of proof? In most jurisdictions that allow such a claim, the case resounds in tort.  Thus, the standard burden of proof applies:  duty, breach of duty, causation and damages.  Today we will focus on the third element - causation. How is this proven?  Courts differ in specifics, but all agree that an excess carrier must show that the claimed damages are proximately caused by the primary's bad [...]

27 Jun, 2014

HOW CAN A FEW WORDS = $50 MILLION DOLLARS?

2018-04-23T20:59:43-06:00June 27th, 2014|Excess and umbrella policies, Midwest Insurance Law Guide|

What triggers excess insurance coverage?  A recent 5th Circuit case provides a sharp lesson for underwriters.  Even one or two words can provide coverage - when it might not have been intended.  In a Texas case, Indemnity Ins. Co. of North America et al. v. W & T Offshore, Inc., No. 13-20512 5th Circuit (June 23, 2014), the 5th Circuit overturned a summary judgment for the insurers and granted summary judgment for the policyholder.  There, the policyholder, [...]

29 Jan, 2014

WHO HAS A DUTY TO NOTIFY AN EXCESS INSURER? The Policyholder or the Primary Insurer?

2018-04-23T20:59:43-06:00January 29th, 2014|Claim Notice, Excess and umbrella policies, Midwest Insurance Law Guide|

  THE BOTTOM LINE: BOTH! The policyholder has a duty to provide notice under the terms of the contract.  The primary insurer has a duty under guidelines adopted by the industry.  A standard form excess insurance contract contains a clause requiring the policyholder to notify the insurer of a loss. While the policyholder's duty may be excused - a topic for another blog post - courts have generally held that this notice is a condition precedent [...]

30 Dec, 2013

Primary Carrier v. Excess Carrier – What Duty Is Owed In A Loss?

2018-04-23T20:59:43-06:00December 30th, 2013|Bad faith, Excess and umbrella policies, Midwest Insurance Law Guide, Subrogation|

THE BOTTOM LINE:   An excess carrier has five viable claims against the primary carrier.      Both a primary and excess insurer contract with a policyholder for coverage, but they do not contract with each other.  Despite this lack of privity, when a verdict is rendered that exceeds the primary coverage, what claims can an excess insurer make against the primary insurer in order to avoid coverage? 1.  Breach of implied duty of [...]

14 Sep, 2013

3 Facts About Excess Policies – The Duty To Settle

2018-04-23T20:59:44-06:00September 14th, 2013|Excess and umbrella policies, Midwest Insurance Law Guide|

1.  An excess insurer has the same fiduciary responsibility toward the policyholder as does the primary insurer.  Along with this duty comes a responsibility to act in the best interests of the policyholder.  Excess insurers are not usually the defendant in a bad faith claim, as the primary insurer undertakes the general responsibility to investigate the claim and determine initial coverage.  However the excess insurer is not immune to an action [...]

10 Sep, 2013

3 Facts About Excess Policies – Drop Down Clauses

2018-04-23T20:59:44-06:00September 10th, 2013|Excess and umbrella policies, Midwest Insurance Law Guide|

1.  A drop down clause provides coverage that "drops down" and acts as primary coverage in certain situations.  These include when the primary insurer is insolvent or the underlying policy aggregate limits have been exhausted. 2.  A drop down clause covering insolvency will only be effective if the policy says so.  For example, if the excess or umbrella policy does not provide drop down coverage if the primary insurer is insolvent, then the clause is not triggered.   [...]

3 Sep, 2013

3 Facts About Excess Policies – Defense Costs

2018-04-23T20:59:44-06:00September 3rd, 2013|Excess and umbrella policies, Midwest Insurance Law Guide|

1. Excess insurance policies do not cover defense costs.  For this reason, the cost for excess coverage is cheaper than primary coverage.  I should say usually excess policies do not cover defense costs.  Nothing is absolute.  However courts across all jurisdictions have consistently upheld an insurance company's denial of defense costs under the express terms of the policy contract.  See, e.g. Cornhusker Agr. Ass'n, Inc. v. Equitable Gen. Ins. Co., 223 Neb. 618, 627, 392 [...]

26 Aug, 2013

The Evolution of Excess Insurance

2018-04-23T20:59:44-06:00August 26th, 2013|Excess and umbrella policies, Midwest Insurance Law Guide|

Once upon a time.........(now you know this is going to be a legal fairy tale, don't you?)  corporations could purchase an "umbrella" policy that was designed to cover those types of catastrophic, once-in-a-lifetime losses that could exceed even the most generous of primary policy coverage limits.  Such policies were sold by the same carrier that issued the primary policy.  Think earthquakes and electrical fires - those kinds of bad-luck losses that make you [...]

27 Nov, 2012

WAS IT WATER OR WAS IT WIND? INSURANCE BLACK HOLE FOR FLOOD LOSSES

2018-04-23T20:59:46-06:00November 27th, 2012|Excess and umbrella policies, Midwest Insurance Law Guide, Property and casualty|

Insurance policies often carry a small clause that contains big language.  It is called a concurrent clause provision.  The words can bar a policyholder’s claim for flood or wind damage if both of those events together cause a loss.  Or if one of those events is specifically excluded from coverage, the insurance company doesn’t have to pay a cent.  Ouch.   Because this is a source for much insurance litigation [...]