Opinion ID: 3158528
Heading Depth: 3
Heading Rank: 4

Heading: Other Insurance Clause 3

Text: An Other Insurance Clause is a “standard provision intended to limit the excess insurer’s liability in the event that insurance other than the scheduled underlying insurance is available to the insured.” Alaska Rural Elec. Co-op Ass’n, Inc. v. INSCO Ltd., 785 P.2d 1193, 1196 (Alaska 1990). It is not intended to expand an excess or umbrella insurer’s liability. Given this backdrop, the district court correctly held the Other Insurance Clause “does not require Canal to assume the obligations of underlying insurers listed in the Schedule of Underlying Policies simply because those insurers are no longer able to fulfill their obligations.” Canal Ins. Co., 2013 WL 6732658, at . Other courts interpreting nearly identical provisions have reached the same conclusion. See, 3 The policy provides: Other Insurance: The insurance afforded by this policy shall be excess insurance over any other valid and collectible insurance available to the insured, whether or not described in the Schedule of Underlying Insurance Policies, (except insurance purchased to apply in excess of the sum of the underlying limit or retained limit and the limit of liability hereunder) and applicable to any part of ultimate net loss, whether such other insurance is stated to be primary, contributing, excess or contingent . . . I Aplt. App. 40. -10- e.g., Steve D. Thompson Trucking, Inc. v. Twin City Fire Ins. Co., 832 F.2d 309, 311 (5th Cir. 1987); Holland v. Stanley Scrubbing Well Serv., 666 F. Supp. 898, 901 (W.D. La. 1987). It would be inequitable to read an other insurance clause as insuring the solvency of the underlying primary insurer. On appeal, Montello focuses on the phrase “valid and collectible” in the Other Insurance Clause. It argues Home’s insolvency rendered the underlying insurance invalid and uncollectible, requiring Canal to drop down and provide primary insurance. When the term “collectible” appears in an excess insurance clause, some, but not all, courts interpret the provision in the manner Montello suggests. See, e.g., Mission Nat’l Ins. Co., 792 F.2d at 553; Gulezian, 506 N.E.2d at 124–26. But see Ambassador Assocs. v. Corcoran, 589 N.E.2d 1258 (N.Y. 1992). Here, however, the term “collectible” appears only in the Other Insurance Clause. This isolated use of the word is not enough to “transmogrify the policy into one guaranteeing the solvency of whatever primary insurer the insured might choose.” Cont’l Marble & Granite, 785 F.2d at 1259; see also Steve D. Thompson Trucking Inc., 832 F.2d at 311. Alternatively, Montello argues because courts must read contracts as a whole, the term “valid and collectible” found in the Other Insurance Clause should be considered when interpreting the Excess and Umbrella Clauses. This, however, does not allow us to modify the contracts and impose such an obligation throughout the contract given the applicable provisions. -11-