The Home Insurance Company v. The Cincinnati Insurance Company

Summary

The Supreme Court of Illinois considered whether an excess insurer could recover settlement payments from a primary insurer through equitable contribution or equitable subrogation. The court held that equitable contribution was unavailable because the policies covered different risks and the excess/primary relationship precluded contribution. It reversed in part, holding that the lower court improperly applied the identity-of-risk requirement for equitable contribution to the equitable subrogation claim.

Holdings

1. An excess insurer cannot recover equitable contribution from a primary insurer because the policies insure different risks; equitable contribution is available only when concurrent policies insure the same entities, interests, and risks.
2. An excess insurer may recover from a primary insurer through equitable subrogation or reimbursement when the primary insurer owed coverage for the same loss and the excess insurer discharged the primary insurer's liability.
3. Home waived the portion of its reimbursement claim exceeding $200,000 because its conduct did not reserve a claim for full reimbursement and it represented that it would share defense and indemnity costs on a 50/50 basis.

Questions Presented

1. Whether an excess insurer may obtain equitable contribution from a primary insurer when the policies contain different additional-insured endorsements.
2. Whether an excess insurer may obtain equitable subrogation or reimbursement from a primary insurer even though the policies insure different risks.
3. Whether Home waived part of its equitable subrogation or reimbursement claim by failing to reserve its rights and by not asserting before settlement that it was entitled to full reimbursement as an excess insurer.

Disposition

reversed