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\nUmbrella Policy Always Excess Over Primary Policy\n\nTwo insurance companies argued who must indemnify an insured for a \nsettlement involving their mutual insured. Great American Insurance \nCompany paid subject to a reservation and sued the primary insurer, \nAllied World Assurance Company, alleging that because it was the \numbrella insurer it only owed after Allied World as the primary insurer,\n paid its limits. The district court agreed, granting summary judgment \nin Great American's favor.\n\nIn Great American Insurance Company v. Allied World Assurance Company, \nInc., No. 22-12496, United States Court of Appeals, Eleventh Circuit \n(May 31, 2023) determined who was on first to the obligation to \nindemnify the insured, Tribridge Residential. \n\nThree different insurance companies insured Tribridge. AmTrust \nInternational Underwriters DAC, an insurance company that issued \nTribridge a primary commercial general liability policy, paid out its \npolicy limit toward the settlement. Then, Allied World and Great \nAmerican disagreed about which policy was the priority coverage for the \nrest of the settlement.\n\nALLIED WORLD POLICY\n\nAllied World issued Tribridge a commercial general liability policy. \nAllied World issued a "primary policy," it contains an excess clause \npurporting to render its coverage excess of other insurance when \nliability arises from Tribridge's property management activities.\n\nGREAT AMERICAN POLICY\n\nGreat American issued a "Commercial Umbrella Coverage" policy which \nincludes Tribridge as an additional insured. The policy covers "those \nsums in excess of the 'Retained Limit' that the 'insured' becomes \nlegally obligated to pay imposed by law or . . . because of 'bodily \ninjury.'"\n\nGreat American paid the rest of the settlement against Tribridge and \nsued Allied World, seeking equitable contribution and a declaratory \njudgment that its coverage obligation is not triggered until Allied \nWorld's policy limit is exhausted.\n\nANALYSIS\n\nGeorgia law delineates between a "primary" insurance policy "written to \nprovide primary coverage"- and an "umbrella" policy- operating as true \nexcess over and above any type of primary insurance. All primary \ncoverage must be exhausted before umbrella policy coverage is triggered.\n\nPrimary policies precede umbrella policies even when the primary policy \nincludes an applicable "excess clause." Umbrella policies, almost \nwithout dispute, are regarded as true excess over and above any type of \nprimary coverage, excess provisions arising in regular policies in any \nmanner, or escape clauses. Primary policies take priority to umbrella \npolicies, even when the primary policy includes an applicable excess \nclause.\n\nGreat American's commercial umbrella coverage policy only covers those \nsums in excess of listed underlying insurance. The Allied World policy \nis written to provide primary coverage and the Great American policy is \nthe true excess policy. Accordingly, Allied World's primary policy must \nbe exhausted before the Great American umbrella policy applies.\n\nIn sum, Allied World is first in the pecking order as the "primary \ninsurer."\n\nSummary judgment was affirmed for Great American but the court reversed \nthe award of attorney's fees.\n\nZALMA OPINION\n\nThe great comedians Abbot & Costello created the "Who's on First \nRoutine" that brought laughter to the question of who is in control. In \nthis case a primary insurer, even with an "excess" and/or "escape" \nclause the primary is always on first and the umbrella only owes after \nthe primary - the insurer on first - pays its limit and then the \numbrella, on second base pays whatever is needed after the primary pays \nits limit. Allied World tried to avoid its obligation, failed, and is \nrequired to reimburse Great American.\n\n