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Excess Insurers’ Right to Challenge The Primary Insurers’ Claim Adjustment

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, March 1, 2022

Recorded event now available

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This CLE webinar will discuss when prior rulings on coverage do not bind an excess insurer that follows form and when it can challenge the primary carrier's coverage, settlement, and payment decisions, including the theory of "improper erosion."


An excess carrier that follows form usually may not challenge the underlying insurer's payment decisions on claims it is asked to cover. But whether a policy follows form on all the relevant issues is not always clear. The parties must examine the specific policy language at issue, any provisions purporting to give the excess insurer the right to challenge the primary's decisions, and how it is used to determine whether the excess policy differs in some material way from the primary coverage.

If a court has reviewed coverage on the underlying policy, the parties may be bound by "law of the case" or traditional preclusion principles. But excess carriers may still challenge the reasonableness of any settlement decisions and pressure reluctant primary insurers to resolve claims prudently.

Recently some excess insurers have argued the theory of improper erosion, the situation where an insurer is alleged to have wrongly paid and used up (or exhausted) an underlying layer of coverage. The facts can get complicated when the excess policy only covers some but not all claims of the primary.

Listen as this experienced panel discusses when prior rulings on coverage do not bind an excess insurer that follows form and when it can challenge the coverage, settlement, and prior payment decisions.



  1. Following form and its variations
  2. Challenging claims treatment the excess is asked to cover
  3. Challenging claims treatment the excess is not asked to cover
  4. Binding effect of prior judgments
  5. Recent decisions


The panel will review these and other key issues:

  • If a follow-form insurer is denied the opportunity to dispute the validity of a primary insurer's payment, can it challenge a prior payment decision by the primary insurer?
  • Can the excess carrier dispute the validity of claims it is not asked to cover?
  • Can allegations of "improper erosion" be the basis of a bad faith claim by the primary carriers? By the insured?
  • What type of specific language clearly and unambiguously reserves the excess carrier's right to second-guess lower-tier insurers' coverage decisions?
  • When multiple claims are involved, does the order and timing of the submission of claims matter?


Bentz, Thomas
Thomas H. Bentz, Jr.

Holland & Knight

Mr. Bentz Jr. practices insurance law with a focus on D&O, cyber and other management liability insurance...  |  Read More

Taylor, Elizabeth L.
Elizabeth L. (Liz) Taylor

Reed Smith

Ms. Taylor focuses her practice on Insurance Recovery. She has experience representing and advising corporate...  |  Read More

Lee, Nathan
Nathan B. Lee

Gray Duffy

Mr. Lee focuses his practice on civil litigation matters, including personal injury, insurance...  |  Read More

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