September 16, 2013

We would like your opinion as to which carrier would be primary/excess or if they should share. The plaintiff alleges that she slipped and fell on an accumulation of ice and snow while she was walking to the parking lot. All snow removal is done in house, no outside companies. Our policy covers the management company directly; the owner is not an additional insured under our policy. On the other hand, our insured as the property manager is insured under the owner's policy, so he has coverage under both policies.

The insurance carrier for the owner of the property has taken the position that our insured (the property manager) is an insured under its policy, but the carrier points out the policy conditions which it believes clearly states that its policy is excess to ours. We disagree. Based on a review of the two insurance policies, we believe that the owner's coverage should be primary.

The owner has a BOP and it states the following: “if there is other insurance covering the same loss or damage, we will pay only for the amount of covered loss or damage in excess of the amount due from that other insurance, whether you can collect it or not. But we will not pay more than the applicable Limit of Insurance; when this insurance is excess, we will have no duty under Business Liability Coverage to defend any claim or lawsuit that any other insurer has the duty to defend. If no other insurer defends, we will undertake to do so; but we will be entitled to the insured's rights against all those other insurers”.

Our CGL policy states that if other valid and collectible insurance is available to the insured for a loss, the insurance is primary unless: there is any other insurance, whether primary, excess, contingent, or on any other basis; or, there is any other primary insurance available to the named insured covering liability for damages arising out of the premises or operations, or the products and completed operations for which the named insured has been added as an additional insured by attachment of an endorsement. Our policy also states that when the insurance is excess, we will pay only our share of the amount of the loss, if any, that “exceeds the sum of the total that all such other insurance would pay for the loss in the absence of the insurance and the total of all deductible and self-insured amounts under all that other insurance”.

The bottom line is that both carriers believe they are excess to one another. Please review and advise your thoughts on which policy would be excess or if you believe they should be pro-rata.

Connecticut Subscriber

Based on the wording of the two policies, it seems to us that both are in an excess position. The owner's policy states that if there is other insurance covering the same loss, the insurer will pay only for the amount of covered loss in excess of the amount due from that other insurance. The other insurance is from the policy of your insured and that makes the owner's policy excess. Then, your insured's policy states that if other valid and collectible insurance is available to the insured for a loss, the coverage is excess over any other insurance whether primary or excess. Your insured does have other valid and collectible insurance under the owner's policy since he is the property manager and this makes his policy excess.

So both parties are claiming to be excess and that is not going to be allowed by any court. Both insurers are going to have to pay on a pro rata basis since the claimant is entitled to payment if the insured(s) is liable and no court is going to allow no payment just because both insurers are claiming excess status.

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