Tag Archives: allocation

Viking Pump: New York Court of Appeal Holds That Consolidated Edison Pro Rata Allocation Rule and Horizontal Exhaustion Rule Do Not Apply Under Facts of Case

By Philip R. Matthews

The New York Court of Appeal on Tuesday, May 3, held that the Consolidated Edison pro rata allocation rule does not apply where the policies have prior insurance and non-cumulation clauses. The Court held that the pro rata rule in Consolidated Edison depends on policy language and that the prior insurance and non-cumulation clause is inconsistent with a pro rata approach. However, the Court did say that prior insurance and non-cumulation clauses would be enforced as anti-stacking clauses. Such enforcement could limit the amount of coverage available to a policyholder. The Court of Appeal also held that under the circumstances of the case, horizontal exhaustion would not apply.

To view this decision, please visit the New York Courts website.

New York Court of Appeals Holds That Multiple Incidents of Sexual Abuse Constitute Multiple Occurrences

In Roman Catholic Diocese of Brooklyn v. National Union Fire Insurance Company of Pittsburgh, Pa., 2013 NY Slip Op 03264 (May 7, 2013), the New York Court of Appeals, New York’s highest court, held that a priest’s multiple incidents of sexual abuse against one victim over a span of six years constituted multiple occurrences. The Court of Appeals also held that the underlying settlement amount should be allocated on a pro rata basis over the seven policy periods, requiring satisfaction of the SIR attendant to each implicated policy.

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New Twists In California Contribution Claims Involving SIRs

An intermediate appellate court in California has issued a decision addressing inter-insurer contribution claims for indemnity payments in the context of self-insured retentions (SIRs) that has a couple of new twists worth noting. In Axis Surplus Ins. Co. v. Glencoe Ins. Ltd. (April 11, 2012), the Court of Appeal for the Fourth District affirmed the trial court’s ruling that Axis was entitled to contribution from Glencoe in the amount of 60% of what Axis paid to settle a construction defect claim against their mutual insured, despite the facts that the insured only made its settlement payment that satisfied the Glencoe SIR after Axis made its settlement payment, that Axis did not prove actual covered damages exceeding the total settlement amount, and that both insurers’ policies contained equal-shares allocation “other insurance” wording.

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