We review an order granting summary judgment de novo. General Casualty Insurance Co., 199 Ill. 2d at 284; Travelers Indemnity Co. v. American Casualty Co. of Reading, 337 Ill. App. 3d 435, 439 (2003). The question squarely presented to this court is whether the selective tender rule supercedes well-settled principles of Illinois law regarding horizontal exhaustion.
"[P]remiums for umbrella policies tend to be comparatively small for the type of risk involved. . . . The umbrella policy issued by [insurer] should be required to contribute only after the limits of the [primary] policy have been reached." Travelers Indem. Co. v. Am. Cas. Co., 337 Ill.App.3d 435, 272 Ill.Dec. 43, 786 N.E.2d 582, 587 (2003). See also Zurich Ins. Co. v. Heil Co., 815 F.2d 1122, 1126 (7th Cir. 1987) ("[the excess insurer] did not contract to bear the risk of the primary carrier's insolvency, nor do its premiums reflect the cost that the assumption of this risk would entail").
" Fashion House, 892 F.2d at 1085. Plaintiffs rely on Travelers Indem. Co. v. Am. Cas. Co. of Reading, 786 N.E.2d 582 (Ill.App.Ct. 2003). In Travelers, the "excess policy" (which was specifically so titled) provided coverage in excess of a $500,000 SIR. The court held that "the Travelers excess policy meets all the criteria for an umbrella excess policy . . . [It is] not intended to pay the first dollar of loss. Rather, the policy is triggered after the self-insured retention limit . . . is reached."Id. at 587.
Under a true excess policy, coverage "is triggered [only] after the limits of the primary policy have been exhausted." Travelers Indem. Co. v. Amer. Cas. of Reading, 337 Ill. App. 3d 435, 439, 786 N.E.2d 582, 586 (1st Dist. 2003). Based on these authorities, Cincinnati argues that its duty to defend was never triggered because the Harleysville policies were not exhausted.
Similarly, in Rosalind Franklin University of Medicine & Science v. Lexington Insurance Co. , 2014 IL App (1st) 113755, ¶ 20, 380 Ill.Dec. 89, 8 N.E.3d 20, the court noted, "[t]he primary policy issued by Lexington is a ‘Healthcare Professional Services Liability Policy’ (hereinafter, the Lexington Primary Policy), which contains a limit of $1 million per ‘medical incident,’ subject to a $100,000 self-insured retention." In Travelers Indemnity Co. v. American Casualty Co. , 337 Ill. App. 3d 435, 439, 272 Ill.Dec. 43, 786 N.E.2d 582 (2003), the court said that a "primary policy typically covers claims starting at the first dollar of loss or the first dollar in excess of a deductible or self-retention." ¶ 28 Thus, the reference to a SIR does not, in itself, resolve the question of whether the policy counts as an excess policy or a primary policy.
(Internal quotation marks omitted.) Travelers Indemnity Co. v. American Casualty Co. of Reading, PA, 337 Ill. App. 3d 435, 439 (2003). "The primary policy typically covers claims starting at the first dollar of loss or the first dollar in excess of a deductible or self-retention," whereas "[c]overage under an excess policy is triggered after the limits of the primary policy have been exhausted."
es "cancel one another out" and insurers are required to contribute to loss on prorated basis); Twin City Fire Ins. Co. v. Fireman's Fund Ins. Co., 386 F.Supp.2d 1272, 1279 (S.D.Fla. 2005) (holding incompatible excess clauses cancel each other out and loss is pro rated between policies); Ruan Transp. Corp. v. Truck Rentals, Inc., 278 F.Supp. 692, 695 (D.Colo. 1968) (holding that where policies both contained excess clauses providing coverage "would come into play only after any other primary insurance" was exhausted, loss would be prorated); Citizens Mutual Auto. Ins. Co. v. Fireman's Fund Ins. Co., 234 F.Supp. 931, 936 (W.D.Mich. 1964) (holding liability would be pro rated between insurers because competing excess clauses were of "no effect" and therefore each policy provided valid insurance); State Farm Mut. Auto. Ins. Co. v. Gen. Mut. Ins. Co., 282 Ala. 212, 210 So.2d 688, 694 (1968) (holding excess clauses were "mutually repugnant" and loss should be apportioned between insurers); Travelers Indent. Co. v. Am. Cas. Co. of Reading, Pa., 337 Ill.App.3d 435, 272 Ill.Dec. 43, 786 N.E.2d 582, 586, app. denied, 205 Ill.2d 649, 281 Ill.Dec. 98, 803 N.E.2d 502 (2003) (holding that if two insurance policies have "mutually repugnant" clauses providing that each will be excess insurance of other applicable insurance, each insurance company is liable for pro rata share of judgment or settlement). The Safeco policy covered the Mazda that was involved in the accident, and the policy provides that Safeco "will pay damages for bodily injury or property damage for which any insured becomes legally responsible because of an auto accident.
735 ILCS 5/2-1005(c) (West 2004); General Casualty Insurance Co. v. Lacey, 199 Ill. 2d 281, 284 (2002). We review an order granting summary judgment de novo. General Casualty Insurance Co., 199 Ill. 2d at 284; Travelers Indemnity Co. v. American Casualty Co. of Reading, 337 Ill. App. 3d 435, 439 (2003). II. VERTICAL EXHAUSTION AND THE SELECTIVE TENDER RULE