Excess coverage reached by any claims that exhaust underlying insurance, Fifth Circuit rules

In a significant victory for policyholders, the Fifth Circuit ruled that the retained limits of a company’s underlying umbrella/excess liability insurance policies could be satisfied by payment of claims the umbrella policies themselves did not cover. The policies provided that the insurers were liable for damages in excess of the retained limits, but nothing in the policies specified how the retained limits could be satisfied. Thus when the policyholder faced claims arising from a hurricane, some of the claims were covered by the umbrella policy and some were not.