A federal appeals court on Thursday reversed a lower court and ruled in a Travelers Cos. Inc. unit’s favor in a dispute with Amerisure Insurance Co. over which insurer must first provide coverage under their umbrella policies, in a case involving a construction worker’s injury.
General contractor Troy, Michigan-based Kirco Manix Construction LLC hired Milford Township, Michigan-based Merlo Construction Co. as a construction project subcontractor, according to the ruling by the 6th U.S. Circuit Court of Appeals in Cincinnati in Travelers Property Casualty Co. of America v. Amerisure Insurance Co.
Kirco obtained general liability and umbrella policies from Travelers, while Merlo obtained these policies from Amerisure.
A Merlo employee was seriously injured during the project, and later sued Kirco for his personal injuries in Michigan state court, according to the ruling.
Travelers and Amerisure initially agreed to jointly pay defense costs, but Travelers later sued Amerisure in U.S. District Court in Flint, Michigan, for declaratory relief, arguing that the Amerisure umbrella policy must be exhausted before the Travelers umbrella policy pays any benefits.
The district court granted Amerisure summary judgment, and was reversed by a three-judge appeals court panel, following its analysis of Amerisure’s umbrella policy language.
A policy endorsement “unambiguously requires Amerisure to offer primary umbrella coverage to Kirco,” the ruling said. “Coverage for the Travelers umbrella policy will begin only after the Amerisure umbrella policy’s limits are exhausted,” the panel said, in reversing the lower court and remanding the case.
Attorneys in the case did not respond to requests for comment.