Self Insured Retention Policy Case Law Examples In California
In General Star Indemnity Co. v. Superior Court (1996), the court merely enforced the self-insured retentions (SIR) in the insured's policy, saying the "policy must be enforced according to its plain terms" (General Star Indemnity Co. v. Superior Court, supra, 47 Cal. App. 4th 1586, 1592, italics omitted), which included an SIR of $ 100,000 and provided the insurer had "the right but not the duty to assume charge of the defense" (id. at p. 1594).
This court accordingly held the insurer was "in the position of an excess carrier having no obligations until the SIR was exhausted" (ibid.), with no obligation to defend.
Likewise, in City of Oxnard v. Twin City Fire Ins. Co. (1995) 37 Cal. App. 4th 1072 44 Cal. Rptr. 2d 177, the court applied express policy provisions in two policies stating the insurers were providing excess coverage which was only available after the insured became legally obligated for an ultimate net loss in excess of its retained limit or SIR ($ 100,000 and $ 200,000, respectively).
Since the insured ultimately paid less than $ 100,000 of a settlement, the court concluded Oxnard was responsible for its own defense costs, since the settlement did not exceed its SIR.
Again, the court said "as a self-insurer, Oxnard was solely liable for defense expenses attributable to the extent of its SIR, just as a primary insurer is responsible for defense expenses attributable to the extent of its coverage." (Id. at pp. 1077-1078.)
It is a great leap from these conclusions--all based on policy provisions--to the proposed principle an SIR is a primary policy and should be treated as primary insurance, and it is a leap we will not take.