Analysis Where Two or More Insurance Companies Insure the Same Risk and Insured

The Second Department explained the legal analysis when two or more insurance companies cover the same risk for the same insured:

“In insurance contracts the term other insurance’ describes a situation where two or more insurance policies cover the same risk in the name of, or for the benefit of, the same person”… .. “[W]here there are multiple policies covering the same risk, and each generally purports to be excess to the other, the excess coverage clauses are held to cancel out each other and each insurer contributes in proportion to its limit amount of insurance”… . This rule is inapplicable where it “clearly distort[s] the plain meaning of the terms of the policies of insurance”…. “In contrast, however, if one party’s policy is primary with respect to the other policy, then the party issuing the primary policy must pay up to the limits of its policy before the excess coverage becomes effective” … .  Murname Bldg Contrs Inc v Zurich Am Ins Co, 2013 NY Slip Op 03874, 2nd Dept, 6-5-13