Friday, December 14, 2012

"Long Standing Insurer" Ordered By First Department to Provide Primary Defense to Bodily Injury Claims

In Travelers Cas. & Sur. Co. v. Alfa Laval Inc., underlying asbestos bodily injury claims were made against the insured defendant.  The insured moved for summary judgment and a declaration that Travelers, as well as another of its insurers, OneBeacon American Insurance Company, were obligated to defend the insured against these bodily injury claims. The trial court granted the motion, declaring that each insurer owed a complete defense obligation. On appeal, the First Department modified as to OneBeacon, finding that it was "premature" to order OneBeacon to share in the defense at this time.  The Court, however, expressly left open the possibility that "OneBeacon may eventually be required to contribute to both defense costs and indemnification on a pro rata basis."  In so holding, the Court observed that Travelers and OneBeacon could not, together, provide a viable defense for the insured.  As such, the Court declared that Travelers, as the "long standing insurer" owed the primary defense obligation but that it may later obtain contribution from other, applicable insurers.  

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