When a court describes the importance of excess vs. primary coverage, it is a beautiful thing to excess carriers and their coverage counsel. In CNA Ins. Co. v. Selective Ins. Co., 354 N.J. Super. 369, 383, 807 A.2d 247, 255 (N.J. Super. Ct. App. Div. 2002), the court stated it this way:
Whether a carrier provides true excess coverage or primary coverage with an excess “other insurance” clause is meaningful. In a true primary-excess relationship between insurance companies, the excess carrier has a reduced risk of exposure and an increased reliance on the primary carrier. [Citation omitted.] The true excess carrier may rely on the primary carrier to act reasonably in (1) discharging its claims-handling obligations; (2) discharging its defense obligations; (3) properly disclosing and apprising the excess carrier of events which are likely to effect that carrier's coverage; and (4) safeguarding the rights and interests of the excess carrier by not placing the primary carrier's own interests above that of the excess insurer.
CNA Insurance v. Selective Insurance, 354 N.J. Super. at 383, 807 A.2d at 255.
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