Barclay Damon Insurance Company Client Spared Defense Costs in Trial
A national motor carrier leased commercial vehicles from a truck leasing company. The leased vehicles were insured by Old Republic Insurance Company under a program available to the leasing company’s customers. A separate line of the carrier’s business involved delivering small packages in vans that were insured with our insurance company client. The carrier did not tell our client about its lease of vehicles from the leasing company, and the leasing company and Old Republic were not aware of our client’s policy.
When one of the leased trucks was involved in a collision with a passenger vehicle, the injured parties brought an action for damages against the leasing company. As part of its policy with the leasing company, Old Republic began providing defense for Ryder. Old Republic then brought an action against our client, seeking a declaration that the two policies provided co-primary insurance and our client, therefore, should help with the defense.
On January 27, 2014, the District of New Hampshire found that Old Republic provided primary coverage and that our client’s coverage was excess. The court noted, however, a statement from a previous case, Universal Underwriters Insurance Co. v. Allstate Insurance Co,. that “the duty of an insurer to defend is the same whether its potential liability is either as a primary or as an excess carrier” and held that an excess insurer must share equally with a primary insurer in the defense of a tort action against a mutual insured. On appeal, the First Circuit affirmed the district court’s decision dealing with primacy of coverage but certified the issue of an excess insurer’s duty to defend alongside a primary insurer to the state’s supreme court.
In an opinion dated January 26, 2016, the Supreme Court of New Hampshire clarified that New Hampshire follows the majority view that an excess insurer has no obligation to share in defense costs until the limits of the primary policy are exhausted, a victory for our client.
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