Previous Alerts have discussed decisions regarding a policyholder’s ability to access excess coverage following settlement with underlying insurers. In a recent ruling, an Ohio court dismissed a policyholder’s claims against several excess insurers on justiciability grounds. MW Custom Papers LLC v. Allstate Ins. Co., No. 2012 CV 03228 (Ohio Ct. Com. Pl., Montgomery Cnty. Sept. 21, 2012).
The policyholder, faced with asbestos liability claims, had entered into cost sharing agreements with its underlying carriers. The court held that by electing to allocate its claims “horizontally” in the cost sharing agreements, the policyholder did not have viable claims against its excess carriers at this time. The court cited to GenCorp., Inc. v. AIU Ins. Co., 138 Fed. Appx. 732 (6th Cir. 2005), in which the Sixth Circuit rejected a policyholder’s attempt to access excess coverage after settling with its primary carriers for less than full policy limits. The GenCorp. court reasoned that because the policyholder “had made the choice to allocate its liability as broadly as possible, … it had to demonstrate that its liabilities would exceed the cumulative limits of all the primary and umbrella policies before it could trigger the excess policies.”
In addition, the court noted that the policyholder here had not presented its asbestos claims to the excess carriers—a prerequisite to a justiciable insurance coverage controversy under Ohio law. See Kincaid v. Erie Ins. Co., 941 N.E.2d 805 (Ohio 2011) (a matter is not justiciable “[u]nless and until the insured has presented a claim to his or her insurer and (where appropriate) proof of how much is owed, and the insurer has either (1) denied the claim or (2) failed to respond to the claim”).