Insurance SIRs and Deductibles: Impact on Satisfaction of SIRs, Policy Limits, Duty to Defend and Additional Insureds

With many companies seeking to control insurance costs by increasing SIRs and deductibles, counsel must consider the impact of these risk retention vehicles on coverage and other obligations of the parties.

SIRs present significant issues during claims settlement, such as whether the insured or its insurer controls settlement decisions. Litigation has ensued over an insurer’s obligations when the insolvent policyholder is unable to pay its SIR, particularly during recent years of business bankruptcies.

One hotly litigated topic is whether the insured must pay the SIR itself or whether it can satisfy it by applying payments made through “other insurance.” Whether the insurer’s duty to defend attaches prior to exhaustion of the SIR is also often contested by parties.

Listen as our authoritative panel of insurance counsel guides practitioners in navigating the impact of policy deductibles and SIRs on key coverage issues and obligations of the parties.

1. Distinctions between SIRs/deductibles and impact on limits and defense costs
2. Attachment of SIRs/deductibles
3. Number of SIRs/deductibles and the potential for stacking
4. Application of SIRs as “other insurance”
5. Obligation to pay SIRs/deductibles; insureds vs. additional insureds
6. Insolvent insured unable to satisfy SIRs
7. Satisfaction of SIRs/deductibles through payments by other insurers

The panel will review these and other key issues:

• How do the distinctions between SIRs and deductibles impact limits and defense costs?
• Can a party other than the named insured satisfy the insured’s deductible or SIR obligation?
• How do defense costs impact an insured’s deductible or SIR obligation?