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Primary v. Excess Insurance: Vertical and Horizontal Exhaustion of Policy Limits Priority and Allocation of Coverage

Analyzing the Effect of California Supreme Court's Adoption of Vertical Exhaustion in Montrose Chemical

Recording of a 90-minute CLE 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 Wednesday, July 29, 2020

Recorded event now available

or call 1-800-926-7926

This CLE course will explore the nationwide impact of a unanimous decision in favor of corporate policyholders by the California Supreme Court in April 2020. Policyholders can identify which policy years have the best coverage, collect, and let the carriers resolve further allocation. Any business with successive years of multi-layered policies to cover potential "long-tail" liabilities will benefit.


Resolving when and in what order a policyholder may access primary and excess insurance coverage is always challenging. This is particularly true when there are multiple-years of layered primary and excess policies to cover claims made or settled long after the insurance policy expired. Many policies attempt to specify the order of coverage access and often make benefits available only after "other insurance" has been exhausted.

In Montrose Chemical Corp. v. The Superior Ct. of Los Angeles Cty, the court held that “other insurance” clauses do not clearly specify whether a rule of horizontal or vertical exhaustion and that the analysis is governed instead by other policy provisions, such as those addressing the attachment of liability and information contained within the schedules of underlying insurance in the excess policies. Policyholders can identify which policy years have the best coverage, collect, and leave the carriers to resolve further allocation among themselves.

Nonetheless, carriers may still hold a great deal of power by refusing to settle until after concluding allocation matters.

Listen as our authoritative panel discusses this ruling, how policyholders benefit, and why the impact of this decision is not limited to California jurisdictions.



  1. Overview of primary and excess policies
  2. How vertical and horizontal exhaustion of policy limits differ
  3. The role of excess coverage for "long-tail" claims involving continuous or progressive injuries
  4. The impact of the California ruling in Montrose Chemical on future claims


The panel will review these and other contentious issues:

  • The interplay between primary and excess insurance
  • Excess, multi-year coverage in the context of latent or "long-tail" injury
  • How policyholders can use vertical exhaustion to maximize coverage and benefits


Raskin, Jeffrey
Jeffrey S. Raskin

Morgan Lewis & Bockius

Mr. Raskin is head of the firm’s Insurance Recovery Practice in the San Francisco office. He has...  |  Read More

Waters, Celia
Celia B. Waters

Saxe Doernberger & Vita

Exclusively representing policyholders, Ms. Waters focuses her practice on complex insurance litigation matters with a...  |  Read More

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