Contribution to be Split Pro-Rata Based on Policy Limits
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Contribution to be Split Pro-Rata Based on Policy Limits

Insurers issued pollution liability policies to different entities that performed services for the insured at different times. Each listed the Milwaukee Metropolitan Sewerage District (MMSD) as an additional insured. MMSD sought coverage for a claim under the policies and both insurers agreed it qualified as an additional insured under their respective policies. However, one insurer took the position its coverage was excess over the coverage afforded under the other policy, minimally for defense purposes; consequently, it had no defense obligation. On appeal to the Supreme Court of Wisconsin, the court held insurers can rely on other insurance clauses only in the situation of concurrent policies and these policies were not concurrent, but successive, since they insured different insureds for different periods of time. Accordingly, both insurers had a primary defense obligation to the additional insured MMSD. The Court then ruled as a matter of first impression the contribution for defense costs should be pro-rated based on policy limits.

Steadfast Insurance Company v Greenwich Insurance Company