Opinion ID: 2120473
Heading Depth: 2
Heading Rank: 1

Heading: The majority decision is contrary to longstanding principles of insurance law

Text: ¶ 90 True excess coverage exists as a part of layered coverage created by specific design and is intended to come into play only when the limits of underlying primary coverage are exhausted. 14 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 200:39 (3d ed. 2007). As a general rule, an excess insurer is not required to defend until the primary insurer's policy limits are exhausted, even when the claim exceeds the primary insurer's policy limits or when the primary insurer refuses to defend. Id., §§ 200:41-43. While insurers and insureds are free to contract around these general rules, here, the parties did not do so. ¶ 91 The majority weaves together separate and distinct policies from different insurers to reach a particular outcome. In the same breath, the majority also concludes that the London Market policy's language is ambiguous. Essentially, the majority concludes that the policy is ambiguous because it does not specifically pen every conceivable limitation or exclusion. In so doing, the majority effectively imposes a requirement that insurance policies list all possible limitations and exclusions regardless of relevance to avoid ambiguity. The majority for the first time concludes that silence on an issue creates ambiguity and, thus, a duty. ¶ 92 The duty to defend is separate from the duty to indemnify. Neither common law nor statute mandates that an insurer always defend its insured. Novak v. Am. Family Mut. Ins. Co., 183 Wis.2d 133, 137, 515 N.W.2d 504 (Ct.App.1994); 14 Russ & Segalla, supra, § 200:5 (An insurer does not have a duty to defend if there is no contractual obligation to defend.). The majority decision upsets these longstanding principles and creates new contractual obligations that have never before been required or recognized.