California Court of Appeal Strikes Another Blow Against “Other Insurance” Clauses

A California Court of Appeal has confirmed that primary insurers may not hide behind “other insurance” clauses to refuse to provide coverage. Certain Underwriters at Lloyds, London v. Arch Specialty Ins. Co., Cal. Ct. App., April 11, 2016, Case No. C072500.

Certain Underwriters holds that all primary insurers whose duty to defend is triggered must contribute to a policyholder’s defense, regardless of the type of “other insurance” clause in their policies. Id. at 10. A defending carrier may also insist that other primary insurers share the defense costs on a pro rata basis, notwithstanding what their “other insurance” clauses may say. Id.

This decision follows another recent appellate decision that also refused to enforce an insurer’s “other insurance” clause, Underwriters of Interest Subscribing to Policy Number A15274001 v. ProBuilders Specialty Insurance Co., 241 Cal. App. 4th 721 (2015) review denied (Feb. 3, 2016). Both of these opinions should help policyholders secure defense funding from primary insurers.