Illinois Subscriber

A

In Illinois , an insured can choose which insurer he wants to handle a claim or lawsuit against him. This idea was upheld by the Illinois Supreme Court in John Burns Construction Company v. Indiana Insurance Company, 727 N.E.2d 211 ( Ill. 2000).

In that case, Burns appealed a lower court's decision that held that Indiana Insurance Company had a right to have Burns' insurance company contribute equally to the defense and indemnification. Burns was a subcontractor who was added to the general contractor's CGL form as an additional insured. After a person was injured on the parking lot that Burns helped to construct, a lawsuit was filed and Burns wanted coverage under the contractor's CGL form. Indiana originally declined coverage, but later agreed to defend and pay any indemnification. Indiana then sought to have Burns' insurer, Royal Insurance Company, share the burden, even though Burns chose Indiana as the designated insurer. The supreme court got the case on appeal and decided that “the insured has the right to elect which of its insurers will defend a particular case. Where an insured makes such a choice, the duty to defend falls solely on the selected insurer, and that insurer may not seek equitable contribution from other insurers not designated by the insured.”

As for the other insurance clause, the court said that the purpose of the clause is not to trigger coverage but to provide a method of apportioning coverage that would otherwise be triggered. In other words, if a policy is never triggered, the issue of liability under an other insurance clause does not arise. The Royal insurance was not available to Burns as called for in the other insurance clause on Indiana 's policy because Burns had expressly declined to invoke Royal's coverage; there was no trigger of coverage.

So, in this instance, the additional insured got to choose which carrier would defend and indemnify. The other insurance clause could not alter this decision.

It should be noted that ISO attempted to clarify such a situation with its revision of the other insurance clause on the 1998 CGL form. That clause declared that the insurance was excess over “any other primary insurance available to you covering liability for damages arising out of the premises or operations for which you have been added as an additional insured.” ISO is saying, using the Burns case as an example, that Burns' CGL form provided excess coverage in his situation because Burns had been added as an additional insured on another liability policy. Burns had other primary insurance available to him and so, that other primary insurance had the primary duty to defend and indemnify.

Your insured's policy may not have the same wording as the 1998 CGL form, but the idea is clear enough from the Burns case that, in Illinois, the insured's choice of insurer cannot be overturned or modified by the insurer.