The Mississippi Supreme Court recently addressed competing “other insurance” clauses in liability policies. Continental Cas. Co. v. Allstate Prop. & Cas. Ins. Co., 2017 WL 3641284, (Miss. Aug. 24, 2017). An auto policy’s “other insurance” clause stated: “If more than one policy applies on a primary basis to an accident involving your insured auto, we will bear our proportionate share with other collectible liability insurance.” A vessel policy’s “other insurance” clause stated that “[i]f there is any other available insurance that would apply in the absence of this policy, this insurance shall apply as excess over the other insurance....”
The injured party’s claim settled with each insurer contributing equal amounts. The vessel insurer sued the auto insurer seeking a declaratory judgment that its policy is excess to the auto policy and had no obligation until exhaustion of the auto policy and to recover defense costs incurred after tendering the claim to the auto insurer. The auto insurer argued the competing policies should apply pro rata based on limits on which basis it had overpaid. The trial court awarded summary judgment to the auto insurer. The vessel insurer appealed.
The auto insurer argued (1) the terms of the vessel liability insurance policy are ambiguous; (2) the “other insurance” clauses in the competing policies are in conflict and therefore require a pro rata apportionment; and (3) the policies did not insure the same property for the same risk. The Mississippi Supreme Court found the vessel liability policy not ambiguous and that the “other insurance” clauses do not conflict because one is an excess clause and the other is a pro rata clause.