So You Think You Know the Law…(Answers to the Winter Edition 2012 of Gray Matters)
January 2012
4. If there is a continuous loss, a general liability insurance carrier can reduce its liability by “stacking” deductibles or self-insured retentions (SIRs) under other policies. (True or False)
False: A general liability insurer cannot reduce its liability by “stacking” deductibles or self-insured retentions (SIRs) under other policies on the risk during the continuous loss period. California Pac. Homes, Inc. v. Scottsdale Ins. Co. (1999) 70 Cal.App.4th 1187, 1193. For example, in California Pacific Homes, the insurers had issued five successive policies, each of which covered losses arising from a single occurrence involving continuous or progressively deteriorating property damage taking place throughout the policy periods, each of which was subject to a self-insured retention of $250,000. The trial court granted a summary judgment for the insured, finding each insurer was obligated to indemnify the plaintiff for that portion of a settlement exceeding a single retained limit of $250,000. On appeal, the court affirmed the judgment, finding that the trial court had correctly rejected the argument because the injury was continuous and progressive for over five years and all five policies provided coverage and thus all five self-insured retention limits must first be satisfied. The appellate court further found that “stacking of retained limits would have the effect of affording an insured far less coverage for occurrence-based claims than the insured has purchased.” California Pac. Homes, Inc. v. Scottsdale Ins. Co. (1999) 70 Cal.App.4th 1187, 1192-1194. .
For any questions you may have regarding civil damages, please contact Wendy Lin Suh in our Encino office.
Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.
