A Primary Policy By Any Other Name Is Still a Primary Policy

CGL – COINSURANCE – PRIORITY OF COVERAGE
233rd St. Partnership, L.P. v. Twin City Fire Ins. Co.
(1st Dept., decided 6/10/2008)

State National Insurance Company provided primary CGL coverage to the plaintiff with respect to an underlying personal injury action. Twin City contended that its coverage was excess. New York Supreme agreed with Twin City and declared that it was not obligated to reimburse plaintiffs for their defense expenses in the underlying action.

The First Department REVERSED, holding:

The court erred in basing its determination that defendant's policy was excess solely on the wording of that policy. We find that since, among other things, there is no primary insurance underlying defendant's policy, and its coverage is subject only to the payment of a deductible, the policy is not a true excess policy, but rather is a primary policy that, under certain circumstances, purports to shift losses to other available insurance (see Bovis Lend Lease LMB, Inc. v. Great Am. Ins. Co., __ AD3d __, 2008 NY Slip Op 3150, *9-10 [1st Dept 2008]; Cheektowaga Cent. School Dist. v. Burlington Ins. Co., 32 AD3d 1265 [2006]). Since we find that both State National's and defendant's policies are primary, their other insurance clauses cancel each other out, and both insurers are rendered co-primary (citations omitted).