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(Article from Insurance Law Alert, January 2016)

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The Eighth Circuit ruled that anti-stacking provisions in two insurance policies were unambiguous and should be enforced as written.  Gohagan v. Cincinnati Ins. Co., 2016 WL 66944 (8th Cir. Jan. 6, 2016). 

Cincinnati Insurance issued a general liability policy and a business owners policy to Thomas Campbell.  Each policy had a $1,000,000 per-occurrence limit.  Both policies contained anti-stacking clauses that provided that “the aggregate maximum limit of insurance” under all policies “shall not exceed the highest available limit of insurance” under any one policy.  Campbell sought coverage under both polices after settling an underlying personal injury dispute.  Cincinnati contributed $1,000,000 under the general liability policy, but argued that the business owners policy did not cover the underlying claims, and that in any event, under both policies’ anti-stacking provisions, coverage was limited to a single $1,000,000 per-occurrence limit.  A Missouri federal district court agreed and ruled in favor of Cincinnati.  The Eighth Circuit affirmed.

The Eighth Circuit concluded that this language unambiguously limited coverage for the underlying settlement to a single policy-limit.  The court rejected the argument that the provisions were ambiguous because they did not define the phrase “aggregate maximum limit.”  Similarly, the court rejected the argument that the policies “other insurance” clauses created ambiguity as to the stacking issue, explaining that other insurance provisions apply only where coverage is provided by policies issued by more than one insurer, which was not the case here.