Below Limit Settlement Obliterates Excess Coverage

In Martin Resource Management Corporation v. AXIS Insurance Company, an excess insurer was held by the United States Court of Appeals for the Fifth Circuit to have no obligation to indemnify its insured under the terms of its excess insurance policy after the insured settled with its primary insurer for an amount below the primary policy limits.

The insured had sought coverage from both its primary and excess policies for the cost of defending underlying litigation in Texas state court. The primary insurer settled …

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