Clashing Insurance Coverage Doctrines, Part Three

Distinguishing between true excess coverage and excess arising "by coincidence" when examining a loss where multiple primary contracts apply.

By Terrence J. Madden | Updated on March 14, 2012

In the previous installment of this series, we cited the case of Kajima Construction Services, Inc. v. St. Paul fire and Marine insurance Company, 227 Ill.App.3d 102, 879 N.E.2d 305 (2007). You may recall that in resolving the issue, the Illinois Supreme Court concluded that the “horizontal exhaustion” doctrine applied and that the targeted tender doctrine did not apply to excess coverage.

In understanding the Kajima decision, it is imperative to note that in discussing the difference between primary and excess policies, the Supreme Court drew a clear distinction between “true” excess coverage and excess coverage that might arise “by coincidence,” where multiple primary insurance contracts applied the same loss.

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