Self-Insured Retentions: Whose Money Really Counts?

Insurers often claim that only the named insured can satisfy the policy’s self-insured retention, or SIR, and that payments by other people don’t count, or that the SIR must be satisfied before an additional insured or judgment creditor can access the policy benefits, but the insurers do not always get their way. Money paid by an additional insured, or even another insurer, may count towards satisfying the SIR, and the insurers owe certain obligations to their insured’s additional insureds and judgment creditors based on the policy language and statutory obligations. The good news is that courts often look for reasons to allow other parties to satisfy the SIR and are reluctant to relieve insurers of their policy obligations due to the named insured’s insolvency or inability to satisfy its SIR.