Excess Entitled to Recover Defense Costs

Cont’l Cas. Co. v. N. Am. Capacity Ins. Co (5th Cir. (Tx.), May 31, 2012)

Three primary insurers and one excess carrier challenged a decision which held that the primary insurers had to split the costs initially spent by one of the insurers defending the insured, while the excess carrier could not recover any of its defense costs from the primary insurers. The court held that the district court erroneously denied recovery by the excess carrier of its defense costs from the primary insurers. The excess carrier should have been able to recover based on contractual subrogation. The court also held that the district court’s decision to prorate the defense costs equally among the primary insurers was correct because each policy provided complete, primary coverage to the insured.