Legacy Vulcan Corp. v. Superior Court

In this case, we consider the nature of an insurer’s defense obligations under a policy of liability insurance that provides both “excess” and “umbrella” coverage. In addition, we discuss the scope and extent of an insurer’s duty to defend in spite of a “retained limit” on the insurer’s duty to indemnify.

Legacy Vulcan Corp. (Vulcan) petitioned this court for a writ of mandate, challenging a pretrial order that decided three stipulated legal questions concerning the scope of the duty to defend under a liability insurance policy issued by Transport Insurance Company (Transport). The trial court concluded that the policy provided both excess and umbrella coverage, but that, for purposes of the duty to defend, Transport’s obligations were limited to those of an excess insurer. Specifically, the trial court concluded that a duty to defend could arise under the terms of the policy only upon the exhaustion of all underlying insurance. It also held that a duty to defend could arise only upon a showing that the claims were “actually covered” under the policy.

We disagree and conclude that the umbrella coverage was primary coverage and that the existence of a duty to defend with…