A federal court in South Carolina recently held one insurer cannot compel another insurer to defend a common insured. FCCI Insurance Co. v. Island Pointe, LLC, 2018 WL 1033194 (D. S.C. Feb. 22, 2018).
An insurer sought a declaration from the court that its insured qualified as an additional insured under policies issued by another insurer to the insured's subcontractors and that that insurer owed a defense to its insured. The subcontractors' insurer filed a motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim. The court dismissed the declaratory judgment action holding that the duty to defend is "personal to each insurer" and, therefore, the failure of one insurer to defend a common insured does not injure any other insurer. Accordingly, the court concluded that one insurer cannot compel another insurer to defend a common insured under the other insurer's policy.
The subcontractor's insurer was represented by Robert M. Kennedy, Jr. of Phelps Dunbar's Raleigh, NC office.
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