Some insurance programs are simple: one primary policy, one
excess policy. Easy. Some insurance programs are complex and
contain many layers and coverages. In the case discussed below, the
court had to interpret how an Aggregate Corridor Deductible (ACD)
in one policy worked and how it affected when the second policy
came on risk.
In Lexington insurance Co. v. RLI Insurance
Co., No. 19-1496, 2020 U.S. App. LEXIS 2486 (7th Cir. Jan.
27, 2020), the policyholder, a trucking company, had a series of
large personal injury settlements. The settlements were paid, but a
dispute arose about the amount each of the policyholder’s
insurers had to contribute to the settlement.
The policyholder’s insurance program consisted of a $3
million self-insured retention (SIR), followed by a series of
excess policies. The excess layers were a $2 million first excess,
followed by a $5 million excess, followed by a $25 million umbrella
policy. That’s not the complicated point. The first
