Pro Rata Apportionment Not Required by “Other Insurance” Clauses

American States Ins. Co. v. Ace American Ins. Co. (5th Cir.; November 19, 2013)

Two insurers that issued auto policies covering an accident involving a vehicle owned by one’s policyholder and driven by the other’s policyholder litigated the issue of priority of coverage between the policies. The Fifth Circuit held that the district court erred in imposing pro rata liability on the insurers. Because the “other insurance” clauses did not limit liability or coverage based on the existence of other available insurance, the policies did not conflict, and, under the terms of the “other insurance” clauses, the vehicle’s insurer was obligated to provide primary coverage to the employer and was liable for the entirety of the employer’s defense.