Excess Insurance Policies Re: Same Risk Cancel Out

In determining that two insurance policies insuring the same risk were both excess insurance policies (canceling each other out), the Fourth Department explained the relevant law as follows:

In resolving disputes between insurers, “we first look to the language of the applicable policies” …, and we note that New York law “recognize[s] the right of each insurer to rely upon the terms of its own contract with its insured”…. “[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 [policy] limit,” unless to do so would distort the plain meaning of the policies…. By contrast, “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”….  Utica Mutual Insurance Company…v Erie Insurance Company, 430, 4th Dept, 6-14-13