Conflicting "Other Insurance" Provisions Found Irreconcilable
The Eleventh Circuit affirmed the district court's determination that the two insurers' "other insurance" provisions were irreconcilable and instructed the insurers to provide coverage on a pro rata basis. Nat'l Cas. Co. v. Gerogia School Board Associaiotn – Risk Managment Fund, 2023 U.S. App. LEXIS 24426 (11th Cir. Sept. 14, 2023).
Two insurers provided coverage to the Professional Associatio nof Georgia Educators, National Casualty and the Georgia School Board Association – Risk Management Fund (Fund). Several Georgia educators, who were insured by both insurers, were sued. National Casualty and the Fund disagreed about who bore the primary duty to defend and indemnify them. The dispute arose from dueling "other insurance" clauses in the insurers' policies.
National Casualty's clause stated, in part, This policy is specifcally excess if the insured has other insurance of any kind whatsoever, whether primary or excess, or if the insured is entitled to defense or indemnification from any other source whatsoever . . ." The Fund's clause provided, "If valid and collectible insurance is available to the Member for a loss covered by [the Fund] under any coverage parts within this Coverage Document, the obligations of [the Fund] are excess over the available and collectible insurance."
Nationial Casualty sued for a declaratory judgment that the Fund had the primary duty to defend and indemnify the educators. The Fund counterclaimed. The parties filed cross-motions for summary judgment. The district court ruled that the two clauses could not be reconciled. Applying a Georgia rule, the court found that when two policies covering the same risk are irreconcilalbe, the insurers must share defense and indemnity costs on a pro-rata basis.
National Casualty appealed. It stressed that the Fund's "other insurance" clause stated that "[i]f valid and collectible insurance is available . . . , the obligations of [the Fund] are excess over the available and collectible insurance." National Casualty argued that the Fund's "other insurance" clause was therefore not triggered because National Casualty's polices were neither available nor collectible. The court determined that National Casualty's policy was "collectible" and "available" because it paid if liability exceeded what other insurance covered. Because National Casualty's policy was "available" and "collectible," the Fund's "other insurrance" clause kicked in to provide excess coverage. Georgia law did not allow National Casualty's clause to supersede the Fund's clause. Instead, liability was to be divided on a pro rata basis.
National Casualty also argued its more specific "other insurance" clause was "super excess" because it expressly provided that its coverage was excess to any other coverage – even if that other coverage was itself excess. This was contrary to Georgia law, however. The district court correctly rejected it.
