Insurance policies contain “other insurance” clauses to establish the priority of coverage. Generally, these clauses boil down to “you first” where more than one policy provides coverage for the same incident. “Other insurance” clauses have evolved to spell out with exacting specificity that the insurance provided will be excess to all other coverage, including any excess insurance, in an attempt to ensure the policy is last in line of priority – in other words, “me last.” The issue before the Eleventh Circuit in National Casualty v. Georgia School Board Association – Risk Management Fund, No. 22-13779 (Sept. 14, 2023) is whether one of these specific clauses conflicts with a general “other insurance” clause, cancelling each other out and requiring pro rata sharing. On the clauses before the court, the Eleventh Circuit answered yes.
First, the Eleventh Circuit looked to whether the clauses are “functionally” the same, despite differences in the specific language. The court reasoned that if the function of each clause is “absolutely antithetical” to the other, then they must both be disregarded, and pro rata sharing is the only equitable answer. Second, the insurer argued that the more specific clause was a “super excess” clause that, as a matter of construction, should govern over the more general clause. The Eleventh Circuit also rejected this argument as contrary to Georgia law. Particularly with “other insurance” clauses, one clause does not gain primacy simply because an insurer used more words to draft it.
As always, however, disputes in the application of “other insurance” conditions require a close reading of the language at issue and an understanding of the law of the jurisdiction.
