Search
 

Excess Insurer Subrogates Because of Primary's Bad-Faith Refusal to Settle

An insurer gets more than it bargained for when a Missouri court allows equitable subrogation because of the primary insurers bad-faith refusal to settle an auto claim.

By Barry Zalma | Updated on October 22, 2013

On October 1, 2013, the Missouri Court of Appeals, Western District, handed down its decision in Scottsdale Insurance Company v. Addison Insurance Company (WD 75963). This represents the first time a Missouri court has been called upon to resolve a dispute between an excess insurer seeking to recover from a primary insurer the amount contributed from an excess policy in order to resolve a claim where the primary insurer failed to settle the claim within its policy limits.

Earlier in the case, the trial court had entered summary judgment in favor of the primary insurer, Addison Insurance Company and United Fire & Casualty Company—collectively “United Fire”—on all counts pled by Scottsdale and the insured, Wells Trucking Inc. Each of seven alternatively pled causes of action sought to recover the amount Scottsdale had contributed toward settling a lawsuit filed against Wells Trucking. The Western District reversed the trial court’s decision and held that an excess insurer can recover the amount it contributed toward settlement from the primary insurer on a theory of equitable subrogation when the primary insurer has committed bad faith in failing to settle a claim within the primary insurer’s policy limits.

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.

INCLUDED IN A DIGITAL MEMBERSHIP:

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

Recommended Stories

PropertyCasualty360

Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join PropertyCasualty360.com now!

  • Unlimited access to PropertyCasualty360.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including BenefitsPRO.com, ThinkAdvisor.com and Law.com
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2024 ALM Global, LLC. All Rights Reserved.