Home > News > Court Affirms No Excess Duty Until Primary Coverage Is Exhausted
COURT AFFIRMS NO EXCESS DUTY UNTIL PRIMARY COVERAGE IS EXHAUSTED
The court in JPI Westcoast Construction v. RJS Associates, 156 CA4th 1448 (2007), reaffirmed the ruling in Reliance v. General Star, (1999) 72 CA4th 1063, that an excess insurer does not owe a duty to contribute to a settlement or judgment involving an additional insured until the additional insured's primary coverage is exhausted.
In JPI Westcoast Construction, a sub-contractor was required to and did have the general contractor added as an additional insured on the sub-contractor's excess insurance policy. The issue brought before the Court was whether the sub-contractor's insurer had a duty to participate in the general contractor's indemnity based on the indemnity provision of the sub-contract or based on the provisions of the excess policy.
After argument, the court held that the indemnity provisions of the sub-contract could not contravene the provisions of the excess policy which stated that coverage was not triggered until the underlying primary insurance for the general contractor was exhausted.
In making its ruling, the Court held that the case of Rossmor v. Pylon, (1975) 13 C3d 622, did not apply because that case was based on a dispute between two primary carriers whose contribution duties were governed by the contractual indemnity provision between the insureds. In JPI Westcoast the two carriers were not both primary insurers, but instead a primary and an excess insurer.
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Related Practice Area(s):
Bad Faith and Coverage
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LOS ANGELES ORANGE COUNTY VENTURA/OXNARD CENTRAL COAST
BAY AREA SACRAMENTO LAS VEGAS RENO PHOENIX
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