Jenner & Block

“Below-limits settlements with underlying insurers are sufficient for obtaining excess insurance coverage,” Lexology

Jenner & Block Partners Matthew L. Jacobs and Michael K. Lowman and Associate Adam G. Unikowsky published an article titled, “Below-limits settlements with underlying insurers are sufficient for obtaining excess insurance coverage,” in Lexology on April 30.  The article discusses the decision in Maximus, Inc. v. Twin City Fire Insurance Co., in which the court held that the policyholder’s below-limits settlements with the underlying insurers in its insurance tower were sufficient to exhaust those underlying policies for the purposes of obtaining excess insurance coverage.  The plaintiff had entered into below-limits settlements with its primary insurer and two excess insurers, and sought insurance coverage from its third excess insurer.  According to the article, the court found that the excess policy was ambiguous because it did not define “actual payment” and did not expressly preclude the policyholder from entering into below-limits settlements.  The court then applied the canon that ambiguous insurance policies must be construed in favor of the policyholder. Messrs. Jacobs, Lowman and Unikowsky were members of the Firm team that represented Maximus in the litigation.