Contributions from Other Insurers May Satisfy the Insured’s Obligations as to Self-Insured Retention Provisions Where the Policy Does not Provide Otherwise
Cont’l Cas. Co. v. St. Paul Surplus Lines Ins. Co., 2015 U.S. Dist. LEXIS 80070 (E.D. Cal. June 19, 2015)
In Continental, the court held that where a policy is silent as to what payments may satisfy a policy’s Self-Insured Retention (“SIR”), a contribution from another insurer can satisfy the retention.
Continental issued a CGL policy to its named insured (“Tasq”), which also provided coverage to an additional insured (“Crown”). Continental further provided a $25,000,000 umbrella policy to cover liability exceeding the primary policy limits. St. Paul issued a CGL policy to Crown, which included a $250,000 SIR.
In defending and settling an underlying wrongful death suit against Crown and Tasq, Continental exhausted its primary policy and $2,500,000 of the limits of its umbrella policy. St. Paul refused to contribute to either the defense or the settlement based, in part, on the position that the SIR in its policy had not been satisfied. Continental sued St. Paul for contribution, and that suit proceeded to a bench trial and post-trial briefing on the SIR issue. Continental argued that its payment on behalf of its insured satisfied the SIR in St. Paul’s policy, and St. Paul argued that only payments by the insured itself can satisfy that SIR. The court found in favor of Continental, and held that, under the terms of the policy before it, any payment on behalf of Crown could satisfy the SIR.
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