How Do You Decide Which Policy is Excess?

An emerging issue in insurance coverage litigation in South Carolina is the role of excess insurance coverage.  In a recent DRI article, Patrick J. Boley noted that excess insurance “is playing an increasingly prominent role in the resolution of liability claims” due to “the continued growth of jury verdicts, the rise of mass torts, the development of . . . corporate liability insurance programs, and the marketing of personal umbrella policies.”  Id. at 22.  In a 2008 case, Horace Mann Ins. Co. v. General Star National Ins. Co, the Fourth Circuit Court of Appeals had an opportunity to explain the role of excess insurance:

[I]t is only after the underlying primary policy has been exhausted does the excess . . . coverage kick in.  Excess insurance is priced on the assumption that primary coverage exists: indeed, an excess policy usually requires by its terms that the insured maintain in force scheduled limits of primary insurance.