Opinion ID: 1058051
Heading Depth: 2
Heading Rank: 3

Heading: Farmers' Duty to Reimburse Enterprise

Text: Having determined that Baasanjav is obligated to indemnify Enterprise for damages it paid to a third party for Baasanjav's negligence, our final inquiry is whether Farmers has a duty to reimburse Enterprise pursuant to the terms of the Farmers policy. Farmers argues that the circuit court erred in ruling that self-insurance was not collectible insurance under the Other Insurance clause in the Farmers policy. Farmers contends that self-insurance qualifies as collectible insurance. Continuing this argument, Farmers asserts that it should not be held liable to either Baasanjav or Enterprise because its obligation is limited to excess coverage pursuant to the Other Insurance clause. We disagree. Under the plain language of the Other Insurance provision, if there is other collectible insurance available to Baasanjav, the coverage provided by Farmers is limited to excess coverage. To resolve this issue, we must determine whether self-insurance constitutes collectible insurance. As explained earlier, self-insurance is not the equivalent of insurance under Virginia law. Accordingly, we hold that Enterprise's self-insurance does not constitute collectible insurance within the meaning of the Other Insurance provision. This position is shared by a number of jurisdictions that have held that self-insurance is not insurance as that term is used in other insurance clauses. See, e.g., St. John's Reg'l Health Ctr. v. American Cas. Co., 980 F.2d 1222, 1224-25 (8th Cir.1992); Wake County Hosp. Sys., Inc. v. National Cas. Co., 804 F.Supp. 768, 776 (E.D.N.C. 1992); Universal Underwriters Ins. Co. v. Marriott Homes, Inc., 286 Ala. 231, 238 So.2d 730, 732 (1970); State v. Continental Cas. Co., 126 Idaho 178, 879 P.2d 1111, 1116 (1994); State Farm Mut. Auto. Ins. Co. v. Universal Atlas Cement Co., 406 So.2d 1184, 1186-87 (Fla.Dist.Ct.App.1981). Therefore, because self-insurance is not insurance for purposes of invoking the excess coverage restriction in the Farmers policy, the circuit court did not err in ruling that Farmers is required to reimburse Enterprise for the damages caused by Baasanjav's negligence.