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Dividing Up the Coverages |
When a patient died, a lawsuit was filed against an Oklahoma nurse for wrongful death. The nurse had her own professional liability policy for $1 million, but she worked at a hospital which had a professional liability policy with a different insurer for $10 million. The two insurance companies could not agree on which would be the primary policy and which would be excess or who owed what.
Citing Oklahoma's doctrine of equitable contribution, the Tenth Circuit federal court determined that because there was a total of $11 million in coverage, the nurse's policy would owe 1/11th of the claim, and the hospital's policy would owe 10/11th of it.
Understanding how insurance coverages work when more than one policy applies to a claim is not always easy. For some coverages, especially those in the property and marine insurance area, general rules for overlapping insurance may offer guidance as to which coverage is primary and which will have to prorate with the other. Complications arise, however, when two or more liability policies may apply to the same claim, when the insureds' interests are not necessarily the same, or when there is a dispute about the level of "primary" coverage that must be exhausted before an excess or umbrella policy will apply. For example, courts have struggled with issues such as whether a "self-insured retention" (SIR) is a "primary" layer of insurance or simply a high deductible under a first-dollar policy. This is one reason why use of the term SIR should be avoided and replaced with wording that is less confusing.
In one Washington state case, two liability insurers, both with policies containing $100,000 so-called SIRs, disputed how much the insured owed on a major loss after the insured had spent $105,000 in its own defense. Washington's Insurance Code does not recognize "self-insurance." The appellate court eventually came to the opinion that one insurer owed 60% and the other 40%, based on their time on the risk during which the claim occurred, with the insured owing both policy deductibles, but receiving credit for the defense costs.
Knowing how deductibles or retentions apply and how to resolve such coverage disputes is part of what is taught in Crawford & Company Educational Services courses. For complete course listing, visit our website.
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This course combines online pre-study and an one (1) week classroom, instructor led, skill application lab. Upon completion of training, the entry level casualty adjuster will have been exposed to the knowledge and technical skills necessary to enable them to handle casualty claims while under supervision.
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Basic Property
August 3-7
This course combines
online pre-study and a one (1) week classroom, instructor led, skill application lab. Upon completion of training, the entry level property or catastrophe adjuster will have been exposed to the knowledge and technical skills necessary to enable them to evaluate, estimate and handle homeowners' property claims while under supervision.
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At Crawford Educational Services, you'll get hands-on training from our expert instructors. We offer classes in property, casualty, and workers' compensation in our classroom facility in Atlanta, as well as customized programs at your location. | |
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Take Note! is a marketing tool of Crawford Educational Services, the training division of Crawford & Company. The contents and any referenced external materials are not intended to and should not be construed as legal or other professional advice, nor is such information intended to be nor should it be used as a substitute for legal or professional counsel. These materials merely convey general information about claims and claims related situations often encountered by claims professionals. While an effort is made to be accurate, Crawford & Company does not represent, warrant, promise, or imply that this information is current, accurate, thorough, or adequate.
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