Under Alaska law it is established that primary policy limits include, among other things, facial limits and attorney's fees taxed under Rule 82, to the extent of coverage. State Farm Mut. Schultz v. Travelers Indem. Since these sums were within the Safety policy limits, Pacific has no liability to reimburse Safety for them. We conclude that the insured would not have reasonably expected Pacific to provide coverage already provided in the Safety policy.
Excess insurers provide coverage for claims that exceed the primary insurance coverage.
Because of the relatively smaller risk of such a catastrophic loss, excess insurance carries proportionately lower premiums that reflect the lesser probability that such insurance will ever be called upon. See Alaska Rural Elec. Safety was not required to provide unlimited coverage. The new regulations also allow insurers to limit their exposure to Rule 82 fees, but the notice requirement and minimum standards now depend on the terms of the policy. Had Safety limited its liability for Rule 82 fees, Spalding probably would have wanted to procure additional coverage for court-taxed costs beyond the Safety policy limits.