Great Am. Ins. Co. v. Phila. Indem. Ins. Co., No. C-200353 (Ohio Ct. App. Apr. 6, 2022)

Residential tenants filed three lawsuits against an insured affordable housing association and others, alleging bodily injury and civil-rights violations arising from defects they said rendered the defendants’ premises unfit for human occupancy. 

The insured tendered the suits to its commercial general liability (“CGL”) insurer for indemnity and defense. In line with its duty to defend policy, the CGL insurer accepted the matter and retained defense counsel on behalf of its insured. The insured subsequently notified its employment practices liability (“EPL”) insurer of the lawsuits, which agreed to participate in the defense to the extent it was required to do so under the terms of its policy. That policy was written on a non-duty to defend basis. 

Ultimately, the residential tenants settled, resulting in a payout by the CGL insurer to its insured for defense costs incurred. Shortly thereafter, the CGL insurer filed suit against the EPL insurer, seeking contribution for the defense costs based on its argument that the policies were “co-primary” and provided equal defense coverage. The trial court ruled in favor of the CGL insurer, awarding it nearly half of the costs incurred. 

The EPL insurer appealed the judgement, arguing that in accordance with its policy’s “Other Insurance” clause, its coverage was “secondary” and therefore sat excess of the CGL policy. While the CGL insurer’s policy did not include an “Other Insurance” clause, it argued the EPL insurer’s “Other Insurance” clause did not apply because each policy insured different losses (i.e., the CGL extended to bodily injury allegations, the EPL extended to civil-rights claims).

The appellate court ultimately reversed the trial court’s decision, holding that the lower court erred by allowing the CGL insurer to seek contribution from the EPL insurer because the EPL policy included an “Other Insurance” clause that made it “excess over any other policy under which another insurer has a duty to defend a claim.” Furthermore, the appellate court cited the EPL policy’s definition of “Defense Costs,” which provided that defense costs did not include “any amounts incurred in the defense of any Claim for which any other insurer has a duty to defend.” The court therefore concluded the CGL insurer had a duty to defend the insured against all claims and the EPL policy was excess over the CGL policy.