Opinion ID: 198249
Heading Depth: 2
Heading Rank: 1

Heading: Coregis' Self-Insurance Policy

Text: 11 Employers argues that Stratford's $75,000 self-insurance retention, for which Coregis assumed no liability, was nevertheless a species of other insurance. Stratford makes the rejoinder that its retention of responsibility to pay for claims against it below the limit of $75,000 was no insurance at all. It seems obvious that Stratford wins this argument. 12 New Hampshire law governs this diversity action. The New Hampshire courts have not addressed whether retained self-insurance under a deductible, or in some analogous situation, constitutes insurance for the purposes of a separate policy's other insurance clause. We must predict, therefore, how the Supreme Court of New Hampshire would resolve this issue, relying on guidance from analogous decisions in other states and other legal authorities. See Moores v. Greenberg, 834 F.2d 1105, 1107 (1st Cir.1987). 13 Black's Law Dictionary 802 (6th ed.1990) defines insurance as 14 [a] contract whereby, for a stipulated consideration, one party undertakes to compensate the other for loss on a specified subject by specified perils. The party agreeing to make the compensation is usually called the insurer or underwriter; the other, the insured or assured; the agreed consideration, the premium; the written contract, a policy; the events insured against, risks or perils; and the subject, right, or interest to be protected, the insurable interest. 15 In contrast, Black's Law Dictionary defines self insurance as a [p]lan in which the insured (e.g., business) places aside in a fund sufficient sums to cover liability losses that may be sustained. Commonly, under such plan the business will self-insure itself up to a certain amount and then carry regular liability insurance to cover any excesses. Id. at 806. 16 The difference between these two concepts--insurance and self-insurance--is self-evident. [T]he plain and ordinary meaning of the term 'insurance' contemplates a written contract--an insurance policy--issued by one individual or entity to compensate another for loss in exchange for a premium.... [U]nder a self-insurance scheme, no written insurance policy is issued by another individual or entity nor is a premium paid because obviously a business which is self-insured does not need to pay itself to protect against its own risk of loss. Wake County Hosp. System, Inc. v. National Casualty Co., 804 F.Supp. 768, 775 (E.D.N.C.1992), aff'd, 996 F.2d 1213 (4th Cir.1993). This view has been adopted by a clear majority of courts confronted with the question. See id. at 774 (collecting cases from New York, Texas, Missouri, Indiana, California, Iowa, Arizona, Florida, Pennsylvania, Alaska, and Ohio). The distinction applies equally within one insuring agreement, the terms of which provide insurance coverage only above a stated amount, therefore requiring the insurer to self-insure, or look to other sources, for the lesser sum. 1 Here, to be sure, Stratford did not literally pay from its own pocket, being covered in large measure by the Insurance Trust under its Endorsement, see infra, but its insurer, Coregis, lacked any responsibility within the $75,000 limits, and, as discussed below, the Insurance Trust's contribution appears not to have been insurance either. 17 We hold that Stratford's $75,000 so-called self-insured retention under its agreement with Coregis was not other insurance within the context of its policy with Employers.