Maine Bonding & Casualty Co. v. Centennial Insurance

The resolution of this case turns upon the answer to this question: When an insured has a layer of “primary” liability insurance and a layer of “excess” liability insurance above the primary, what duty, if any, is owed by the primary liability insurer to the excess liability insurer?

This case involves a classic primary-excess insurance relationship resulting from the purchase by the insured, Great Balls of Fire, Inc., of two separate policies, one providing primary coverage and the other providing excess coverage. Great Balls of Fire purchased a property damage liability policy from defendant…