Trenton Cold Storage Ltd. v. St. Paul Fire & Marine Insurance Co.

Although not a marine insurance case this decision relates to an issue that marine underwriters are often called upon to deal with. The case concerned a fire at the assured’s warehouse which resulted in damage to goods belonging to one of its customers. The assured had two liability policies; a warehouseman’s legal liability policy and an umbrella excess policy that also provided comprehensive general liability coverage. The insurer under the warehouseman’s legal liability policy settled the claim with the assured’s customer and sought a 50% contribution from the insurer under the second policy. The court first considered whether the second policy was a true umbrella policy and held that it was not. The court next considered the "Other Insurance" clauses in the two policies. The clauses were virtually identical, each providing that their own insurance was excess. The court held that the two clauses were mutually repugnant and cancelled each other out. In result, both underwriters were required to share equally in the settlement. The insurer under the second policy was not, however, required to contribute to the defence costs as these costs were excluded in its policy.