Mutually Repugnant Other Insurance Clauses
Post 4956
Frequently, an incident occurs which may be covered by policies issued by separate insurance companies. In such a situation, each company, through its policy, may attempt to make the other company primarily responsible for insuring the incident with its own coverage being secondarily responsible, i.e., excess insurance. In this case, the issue involves interpreting the conflicting “other insurance” provisions between Motorists Mutual Insurance Company (“Motorists”) and First Specialty Insurance Corporation (“First Specialty”).
In Motorists Mutual Insurance Company v. First Specialty Insurance Corp., No. 2023-SC-0239-DG, Supreme Court of Kentucky (December 19, 2024) the Supreme Court of Kentucky interpreted the application of two other insurance clauses.
FACTS
Although the “other insurance” provisions differ somewhat, the Supreme Court concluded that they are indistinguishable in meaning and intent. If the clauses being mutually repugnant and therefore of no effect and since these provisions are mutually repugnant excess clauses.
FACTUAL BACKGROUND
The underlying dispute between the parties arose from the tragic death of a five-year-old child after he was struck by an Alltrade employee, Tanzilla, as Tanzilla was driving his vehicle at an apartment complex owned by Whispering Brook Acquisitions LLC.
Alltrade was party to a Service Agreement with Whispering Brook in which Whispering Brook retained Alltrade to perform work around the apartment complex. That Service Agreement called for Whispering Brook to indemnify and hold harmless Alltrade for all liability on account of the management of the property.
Alltrade was insured under a commercial general liability policy with Motorists and Whispering Brook was insured under a commercial general liability policy with First Specialty. Both insurance contracts contained “other insurance” provisions.
Following the accident, the child’s family brought a wrongful death suit against Whispering Brook and Alltrade.
The trial court first determined that Alltrade and its employees were insureds under First Specialty’s policy. The court then held that Motorists’ and First Specialty’s “other insurance” provisions were mutually repugnant excess clauses. The trial court granted summary judgment for Motorists ruling that the companies share primary liability for the loss and were required to contribute equal shares.
Ultimately, the underlying case was settled with the plaintiffs. The Court of Appeals reversed the trial court and held that First Specialty’s “other insurance” provision was a nonstandard escape clause because the language was virtually identical to the nonstandard escape clause identified in Empire Fire &Marine Insurance Co. v. Haddix, 927 S.W.2d 843 (Ky. App. 1996).
ANALYSIS
The dispute between the parties at the trial court involved two primary issues: 1) whether Alltrade and its employees were covered under First Specialty’s policy; and 2) if so, what were the respective liabilities of the insurance companies. First Specialty’s coverage for the Service Agreement and the liability for bodily injury were subject to the same “other insurance” provision at issue in this case.
The Supreme Court concluded that both Motorists’ and First Specialty’s policies provide for excess coverage and are mutually repugnant. The Trial Court rightly determined the First Specialty policy does not include an escape clause. Accordingly, First Specialty shares equal liability to defend and indemnify Alltrade, Tanzilla and Key.
Excess Clauses v. Escape Clauses.
Excess clauses and escape clauses have different purposes. An excess clause limits liability and provides that the insurer will pay for a loss but only after any primary coverage available from another insurer has been exhausted. A standard escape clause denies liability if other valid and collectible insurance is available to the insured. A nonstandard escape clause is different from an escape clause because it denies liability if other insurance is available but also specifies that this other insurance may be either primary or excess.
When both policies have mutually repugnant excess clauses, neither one of them takes effect and the two insurers share the costs to defend and indemnify their insureds.
Motorists’ and First Specialty’s “other insurance” provisions are virtually the same.
Since Motorists’ and First Specialty’s “other insurance” provisions are mutually repugnant excess clauses, the loss between the insurers must be apportioned. Given the identical limits of liability and the co-primary coverage for both parties, the best apportionment method is for Motorists and First Specialty to contribute equal shares to defend and indemnify Alltrade, Tanzilla, and Key.
In conclusion, the Supreme Court reversed the Court of Appeals’ opinion holding that First Specialty’s “other insurance” provision was a nonstandard escape clause and hold First Specialty’s and Motorists’ “other insurance” provisions are mutually repugnant excess clauses. Motorists and First Specialty are to contribute equal shares to defend and indemnify Alltrade, Tanzilla, and Key.
ZALMA OPINION
Another case proving that insurers, as professional litigators, should never litigate with other insurers but should, by negotiation, mediation, or discussion among equals, to avoid litigation, trial, appeal to the Courts of Appeal and the Supreme Court. Instead of all the time, labor, expense and argument to three different courts, it would have been less expensive and in the best interest of the insureds, to agree to defending those insured and resolve the plaintiff’s suit for wrongful death. Only the lawyers for the insurers profited from this litigation.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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No Right to Subrogation Against Tenant
Post 5231
Not Fair to Require Tenant to Pay for Damage Insured by LandlordSee the video at https://lnkd.in/gFkrp_6M and at https://lnkd.in/gQdFQBWj and at https://zalma.com/blog plus more than 5200 posts.
See the video at and at
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Post 5230
Read the full article at https://lnkd.in/gpF3y7Vd, see the video at https://lnkd.in/gR5cVcbY and at https://lnkd.in/gch6Q4_V, and at https://zalma.com/blog plus more than 5200 posts.
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In re Matthew Jene Tubbs (Bankr. N.D. Tex., Fort Worth Div., No. 22-42728-MXM-7; Adv. No. 23-04019-mxm), October 15, 2025 .
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In the Fall of 2021: Tubbs represented to Mr. Robles that he personally built a newer house and large barn on his parents’ property “with his own hands” (except foundation/insulation). That he had 10 years’ experience overseeing window/door installations at a major home-improvement chain, was a licensed contractor (false) and carried general contractor liability insurance.
Relying on ...
See full video at https://lnkd.in/gtnsH3SW and at https://lnkd.in/geJ4FseF, and at https://zalma.com/ and at https://lnkd.in/gC2wmzqZ.
ZIFL-Volume 29 Number 22
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post 5228
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
Read the full 20 page issue of ZIFL at http://zalma.com/blog/wp-content/uploads/2025/11/ZIFL-11-15-2025-1.pdf
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The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
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Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
