“Other Insurance” Analysis Unnecessary If Policies Do Not Insure The Same Risk At The Same Level Of Coverage

This coverage dispute between the plaintiff,  Progressive, and the defendant, St. Paul, concerns their respective rights and obligations to their mutual insured Sonoma Valley Bancorp, in an underlying lawsuit. Progressive covered the cost of the defense and settlement of the underlying lawsuit and now seeks contribution from St. Paul. The court noted that Progressive’s policy was a primary policy, with an “other insurance” provision. On the other hand, St. Paul’s policy was an excess and umbrella policy with an “other insurance” clause obligating St. Paul to provide coverage only if the loss was not paid by any other insurance or source. In its motion for summary judgment, Progressive argued that St. Paul’s policy did not qualify as an excess policy because it did not identify the Progressive policy or establish a predetermined amount of primary coverage before liability will attach.  However, the court determined that to the extent there was any ambiguity, the extrinsic evidence demonstrated that St. Paul and the insured intended that the St. Paul policy be excess to Progressive’s primary policy. The court determined that it need only determine whether “other insurance” clauses conflict and require equitable contribution if the policies at issue insure the same risk at the same level of coverage. The court held that the two policies did not insure the same risk at the same level of coverage, as one policy was a primary policy and the other was an excess and umbrella policy. Therefore, proration and equitable contribution  was not warranted.

Progressive Cas. Ins. Co. v. St. Paul Fire & Marine Ins. Co., 2014 U.S. Dist. LEXIS 73220, 1-2 N.D. Cal. May 28, 2014

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