News & Insights

More Confusion on "Scope of Coverage"

01 Dec 2001

When seeking coverage for a continuous environmental loss spanning over multiple policy periods, the First District held that the policyholder must exhaust all available primary insurance in the triggered policy periods, including periods when it was uninsured or self-insured, before excess policies can come into play. In Maremont Corp. v. Continental Cas. Co. et al., No. 1-00-3780, 2001 WL 1428349 (Ill. App. 1st Dist., Nov. 14, 2001), the Illinois Appellate Courtâ„¢s "horizontal exhaustion" ruling followed the decision of the Second District in Outboard Marine Corp. v. Liberty Ins. Co., 283 Ill. App. 3d 630 (1996), but arguably contradicts the Illinois Supreme Courtâ„¢s decision in Zurich Ins. Co. v. Raymark Industries, Inc., 18 Ill. 2d 23 (1987), and other Illinois decisions, which reject pro rata allocation and hold each insurer during the triggered policy periods is independently responsible for "all sums" (i.e., the full loss) spanning the multiple policy periods. Can you say "P.L.A."?