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Is an Excess Liability Insurer Required to Provide Coverage When the Primary Insurer is Insolvent?

by | Jan 23, 2016 | Bankruptcy, Duty to Defend, Excess Insurance, Insurance Law

Corporations and property owners faced with toxic tort and environmental claims arising from alleged exposure to toxins spanning many years often need to evaluate insurance coverage available under multiple insurance policies issued by different insurance companies over different years. Issues arise when one or more insurance companies who issued such policies are no longer able to provide the coverage purchased because they are insolvent. Recently, the United States Court of Appeals for the Tenth Circuit ruled that an excess insurer is not obligated to assume the obligations of a primary insurer when the primary insurer is declared insolvent. Canal Ins. Co. v. Montello, Inc., 2015 WL 7597429, 2015 U.S. App. LEXIS 20625 (10th Cir. Nov. 27, 2015). You may read my article about the Montello decision published on the website of the American Bar Association Insurance Coverage Litigation Committee here.

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