A high-stakes coverage dispute between Hartford Fire Insurance Company and Chubb Custom Insurance Company has clarified how courts may interpret layered insurance policies in complex corporate liability cases. In a decision issued July 2, the US Court of Appeals for the Eighth Circuit reversed a district court’s ruling that required both insurers to split a $2 million wrongful death settlement, finding instead that Hartford must pay before Chubb.
The underlying incident was tragic. Michael Swanson, an employee of Edward Jones Trust Company, fatally struck a motorcyclist while driving his parents’ Toyota Camry. A wrongful death lawsuit followed and was ultimately settled. Swanson’s personal automobile insurance covered the claim up to its limits, but $2 million in damages remained unpaid.
That shortfall raised a familiar issue in commercial insurance: when multiple policies cover the same loss, which insurer pays next?
Swanson was covered under two additional insurance policies through his employer. The first, issued by Hartford, was a commercial auto policy that provided primary coverage for company-owned vehicles and excess coverage for non-owned vehicles. The second, issued by Chubb, was a group excess liability policy that applied to Edward Jones and certain employees.
Both insurers acknowledged that the personal auto policy paid first, but each pointed to the other's policy as next in line. Hartford’s policy included a clause stating it was “excess over any other collectible insurance.” Chubb’s policy stated it would pay “only for covered damages in excess of all underlying insurance,” describing itself as “excess over any other insurance.”
In district court, Hartford argued that the two policies’ excess clauses were mutually repugnant, a legal shorthand for saying that both clauses cancelled each other out, and that under Missouri law, both insurers should share the loss equally. The court agreed and ordered a 50/50 split.
But the Eighth Circuit disagreed. The appellate panel found that the policy language was not irreconcilable and, in fact, revealed a clear order of priority. According to the court, Hartford’s use of the word “collectible” was critical. That clause, the court said, refers to insurance that is actually capable of being collected, like Swanson’s personal auto policy, which had already paid.
Chubb’s clause, on the other hand, was broader. It described coverage that would only kick in after all other insurance had been exhausted, without regard to whether it was collectible or not. Under that structure, Hartford’s policy still counted as “other insurance” that had to be paid before Chubb’s would apply.
By giving effect to both clauses as written, the Eighth Circuit concluded there was no true conflict. It ruled that Hartford’s policy must respond after the personal auto coverage and before Chubb’s, effectively reversing the district court’s order and directing judgment in Chubb’s favor.
For insurance professionals, the case offers a pointed reminder that small differences in policy language, like whether a clause refers to “collectible” insurance, can dramatically shift responsibility in complex claims. It also reinforces the importance of precise drafting in excess and umbrella policies, particularly when multiple insurers are involved in layered coverage structures.
This decision is particularly relevant for commercial insurers, risk managers, and brokers overseeing corporate auto fleets or executive protection plans. As the demand for customized insurance solutions grows, so too does the importance of understanding how one policy may interact with others during a claim.
While the ruling doesn’t reshape the industry’s approach to excess insurance, it does sharpen the lens through which courts may view these disputes. In practice, it gives insurers more reason to review how their policy language might be interpreted in layered claims scenarios and provides valuable guidance on avoiding costly, drawn-out litigation over who pays what and when.
