Double or Quits: recent Caselaw on Double Insurance

First published in The Review August 10

Double insurance arises when the same party is insured with two (or more) insurers in respect of the same interest on the same subject-matter against the same risks. The general rule is that (subject to the terms of each policy), the insured can recover in full from either insurer and the paying insurer is then entitled to a contribution from the other insurer.

Insurers commonly try to limit, or even exclude, the right of contribution by including a contractual term in their policy. The most commonly used terms are designed to have the following effects if there is other insurance:

1. transmute the policy into an excess layer policy (an "excess clause"); or