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Complete Exhaustion of Primary Coverage

By William .P Shelley and Jeannie Park Lee
January 30, 2014

In December 2012, we wrote an article in which we noted a trend in courts requiring an insured to demonstrate that its primary policy has been exhausted solely by payment of the primary insurer. (See http://bit.ly/1hrbGTK.) This was in order to access excess layers of coverage based upon exhaustion language in the excess policies.

The cases decided since the last article continue to demonstrate the importance of including clear exhaustion language in excess policies, and the impact that settlements with primary insurers could potentially have when seeking to recover from higher-level policies.

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