Exhaustion requirements and duty to defend; Umbrella policy
Diane Polscer discusses a recent Oregon case on exhaustion requirements on the duty to defend in umbrella policies. The court concluded the insurer’s duty to defend under an umbrella policy was triggered even where all other underlying coverage for all possible periods had not been exhausted.
Generally, umbrella policies are only required to kick in once the primary policy (or policies) have been used up. Here, the court held that only primary policies covering the same year as the umbrella policy needed to be exhausted before the umbrella policy was on the hook.
