Court Unravels ‘Other Insurance’ Clauses to Find Excess Coverage

By Don R. Sampen, published, Chicago Daily Law Bulletin, April 7, 2026

The 7th U.S. Circuit Court of Appeals, construing Illinois law, recently untangled two insurers’ “other insurance” clauses to find that both insurers provided excess coverage and therefore were obligated to share defense and liability costs.

The case is Great West Casualty Co. v. Nationwide Agribusiness Insurance Co., Nos. 24-1258 and 24-1259, 2026 U.S. App. Lexis 4204 (7th Cir., Feb. 11). Great West was represented by Franco Moroney Buenik LLC in Chicago. Swanson, Martin & Bell LLP in Chicago represented Nationwide.

In 2021, a tractor-trailer driven by Robert Fisher collided with an SUV driven by Patrick Brennan, who died in the collision.

Fisher was an employee of Deerpass Farms Trucking LLC. The tractor he drove was leased from and owned by Deerpass Farms Services LLC. Conserv FS Inc. owned the trailer. Deerpass Trucking had contracted with Conserv to haul cargo and trailers.

Brennan’s estate brought suit against Fisher and all these entities.

Great West issued a policy to Deerpass Trucking that covered the tractor for $1 million and also provided coverage for Fisher and Conserv.

Nationwide issued a policy to Conserv for $2 million covering the trailer; that policy also covered Fisher and Deerpass Trucking. Each policy therefore covered all the defendants in the underlying lawsuit.

In 2023, Great West brought suit against Nationwide and others seeking a determination that, based on the two insurers’ “other insurance” clauses, the Great West coverage was excess to that of Nationwide.

The Nationwide policy contained excess “other insurance” language providing that the Nationwide coverage was excess when the Conserv trailer covered by the policy was connected to a motor vehicle Conserv did not own. Since Conserv did not own the tractor involved in the accident, the parties agreed that Nationwide’s coverage would be regarded as excess.

Thus, the issue in the case turned on whether the Great West policy also provided excess coverage and, if so, whether it had “super excess” status over the Nationwide policy.

The district court held that both policies were equally excess and that the insurers must split defense and liability costs in proportion to their coverage limits. The two insurers each appealed.

Analysis

In an opinion by Judge Doris Pryor, the 7th Circuit affirmed. She began by addressing paragraph 5.b. of Great West’s “other insurance” clause. Its relevant language stated that when the covered tractor was “hired or borrowed” by Deerpass Trucking from another motor carrier, the coverage would be excess if the agreement required the lessor to hold Deerpass Trucking harmless.

Nationwide’s main argument for the inapplicability of this provision was not the hold harmless requirement but rather the “hired or borrowed” language. Nationwide contended that the language was ambiguous because Deerpass Trucking had “leased” the tractor from another entity, rather than “hired or borrowed” the tractor. That argument was quickly dispatched by Pryor, who found that hiring or borrowing included leasing.

Nationwide also pointed to another clause within the Great West “other insurance” provision stating that, regardless of any other language, the policy would apply as “primary for any liability assumed under an ‘insured contract.’” An “insured contract” is one for which the insured assumes the tort liability of someone else. Nationwide here claimed the indemnity provision in Deerpass Trucking’s agreement with Conserv constituted an “insured contract.”

Pryor observed that, although Deerpass Trucking had an obligation to indemnify Conserv, the agreement provided an exception from indemnification for losses “caused by the negligent acts or omissions of Conserv.” In light of that exception, Pryor found that the agreement with Conserv did not constitute an “insured contract,” and the Great West policy therefore qualified as excess.

The only remaining issue was whether the Great West coverage should be regarded as “super excess” over Nationwide’s excess coverage. On this point Pryor agreed with Nationwide.

Great West’s main argument was based on relevant language in its “other insurance” clause stating that its policy was “excess over any other collectible insurance.” The relevant Nationwide provision, on the other hand, stated only that Nationwide was “excess” and did not include “over any other collectible insurance.”

In ruling, Pryor acknowledged the general rule of contract construction against interpretations that render any language superfluous. She wrote, however, that the rule is not absolute and that superfluous terms sometimes appear in contracts because contract drafters err on the side of redundancy.

In that context she recognized that “over any other collectible insurance” is a mere redundancy, not intended to recognize a never-before-seen “super excess” tier of insurance coverage. Such an interpretation, moreover, was consistent with other parts of the Great West policy which appeared to recognize only two tiers of coverage: primary and excess.

The court therefore affirmed the judgment of the district court in finding that both policies provided excess coverage and that the insurers were required to share coverage proportionately.

Key Points

• An indemnity provision that does not require the insured to cover losses caused by another person’s negligent acts does not constitute an “insured contract.”

• The rule of construction against rendering policy language superfluous is not absolute and may bend where redundancies can be identified in the contract.