Q

The other insurance clause on the CGL form stipulates how the coverage is either primary or excess, if other valid and collectible insurance is available to the insured for a covered loss. Suppose ABC Corporation has a CGL form and adds XYZ Corporation as an additional insured onto the policy; XYZ Corporation also has its own CGL form. A covered loss arises wherein claims are made against both ABC and, as an additional insured, XYZ. Does the CGL form of ABC cover both insureds on a primary basis, and will the coverage forms of both insureds apply, with insurance being split on a pro-rata or equal share basis?

New Jersey Subscriber

A

The wording of the other insurance clause on the CGL form makes the coverage forms of both corporations primary for the claim, calling for the insurance coverage to be shared. If the loss is covered, and if there is other valid and collectible insurance, the CGL form makes itself primary insurance unless the listed criteria are met to make the insurance excess. Your question does not go into detail about the claim, but assuming that it does not match the three criteria listed on the standard CGL form, the coverage offered is primary.

For the most part, additional insured endorsements make the added insured an insured for liability arising out of the operations of or premises owned by the named insured, but such endorsements do not mention primary versus excess insurance. Therefore, the other insurance clause on the CGL form provides guidance, and, as noted, that clause makes both coverage forms primary. As for the method of sharing, that is by equal shares or on a pro-rata basis, depending on what is permitted by the other insurance policy.