Mutual Repugnancy Does Not Apply When One Policy Contains "No Liability" Clause And Other "Excess Clause"
09/02/08
Where a ‘no liability’ clause expressly provides that its insurance does not apply to any loss covered by ‘other valid and collectible insurance, whether primary, excess or contingent,’ numerous authorities have held that the insurance company whose policy contains such clause will be absolved from liability in a case where the other policy contains what is designated as an ‘excess’ clause. The rationale for such holding is that the insurer whose policy contains a specific “no liability’ clause anticipated the possibility of the existence of an ‘excess’ clause in [another policy] and expressly contracted against liability in that situation.
Applying this reasoning, the language of the “no liability” clause in the employer’s insurance policy should be given effect over the “excess” clause in the employee’s policy. Accordingly, employee’s policy is not liable for the loss. Because only employer’s policy is liable for the loss, employer and its insurer are not entitled to equitable contribution from employee’s insurance carrier.
Wentzville Park Associates, L.P. vs. American Casualty Insurance Company of Reading, PA., Dockect No. ED90412 (Mo.App.E.D. September 2, 2008).
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