Opinion ID: 2634716
Heading Depth: 2
Heading Rank: 1

Heading: Cotter's Other Insurance Argument

Text: Cotter first contends that the disclaimers contained in the excess policies conflict with language in the Great American primary policies. Cotter points to language contained in the primary policies stating that once the policy limits are exhausted, Great American's obligation to provide a defense ceases. [13] Cotter argues that this language conflicts with the clauses in the excess policies that disclaimed any duty to defend, because to read both clauses together would leave Cotter without a defense. Cotter analogizes this situation to that in which an insured owns two insurance policies, each of which contain competing other insurance clauses. An other insurance clause requires that when any other insurance covers the same loss, the other insurance must be exhausted before liability under the policy in question attaches. [14] Empire Cas. Co. v. St. Paul Fire & Marine Ins. Co., 764 P.2d 1191, 1199 (Colo.1988). Thus, when two policies contain other insurance clauses that cover the same loss, by the terms of the agreements, no insurance would be available. See id. Rather than validating one policy at the expense of another, we have held that conflicting other insurance clauses are mutually repugnant. See id.; Guaranty Nat'l Ins. Co. v. Ohio Cas. Ins. Co., 40 Colo.App. 494, 580 P.2d 41 (1978), rev'd on other grounds, 197 Colo. 264, 592 P.2d 397 (1979). We have instead required both insurers to provide coverage on a pro-rata basis. See Empire Cas., 764 P.2d at 1199-1200; Allstate Ins. Co. v. Frank B. Hall & Co., 770 P.2d 1342, 1347 (Colo.App.1989). Cotter argues that its situation is similar, because the clause in the primary policies, read with the disclaimers in the excess policies, would abrogate all coverage. Therefore, Cotter reasons, the excess insurers are liable for pro-rata shares of defense costs. As the court of appeals correctly concluded, Cotter's situation is not analogous to the situation of conflicting other insurance clauses. [15] In the other insurance situation, the insured would have coverage under one policy but for the existence of the other. Here, however, Cotter's primary and excess policies do not cover the same loss. Whereas coverage under the primary policies provides Cotter a defense, the excess policies unconditionally exclude any duty to defend. Therefore, neither the primary nor the excess policies would provide Cotter coverage for defense costs above the limits of the primary policies, independent of one another. As a result, we find Cotter's situation different from that of other insurance clauses. Because Cotter's situation is not analogous to that of other insurance clauses, First State and American Empire are not liable for defense costs under this theory. Therefore, we conclude that the court of appeals correctly rejected this argument.