In order to decide a case of competing "other insurance" clauses, an Illinois District Court of Appeal needed to specifically define general maxims of "horizontal exhaustion" and "target tender of a defense".
The principle of horizontal exhaustion requires an insured who has multiple primary and excess policies covering a common risk to exhaust all primary policy limits before invoking excess coverage.
Vedder v. Continental Western Insurance Co., 2012 IL App (5th) 110,583, 2012 WL 5331563 *5 ¶ 21 (Ill. 5th DCA October 29, 2012). [Emphasis added.]
"Targeting" an Excess Carrier to be tendered a defense is simply not done in such a "horizontal exhaustion" jurisdiction:
Our courts have consistently held that an insured cannot target tender a defense to his excess insurer while primary coverage remains unexhausted.
Vedder v. Continental Western Insurance Co., 2012 IL App (5th) 110,583, 2012 WL 5331563 *5 ¶ 21 (Ill. 5th DCA October 29, 2012). [Emphasis added.]
To rephrase Oliver Wendell Holmes, general maxims and phrases are more often an excuse for lack of accurate analysis, than an aid in interpreting an Insurance Policy, and the decision in this case proves it. In the Vedder v. Continental Western Insurance Company decision, the Judges had to define general words and phrases before they could decide the case before them.
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