Legal Memorandum: Courts resolving conflicts between insurance policies and contracts

Issue: Under Illinois law, when construing insurance coverage, how does a court resolve conflicts between insurance policies and contracts?

Area of Law: Contracts, Insurance
Keywords: ; Insurance; Contracts; Policy; Umbrella Policy; Primary Policy
Jurisdiction: Illinois
Cited Cases: None
Cited Statutes: None
Date: 03/01/2016

The appellate court has considered conflicts in policy language in Illinois Emcasco Insurance Co. v. Continental Casualty Co., 139 Ill.App.3d 130 (1985), which involved an automobile accident.  In Emcasco, Kolber was driving King’s car, with King’s permission, when he was involved in an accident in which his two passengers suffered injuries. Continental insured King under an umbrella policy which required King to purchase underlying primary automobile insurance. Emcasco insured Kolber, under a policy that made its insurance "’excess over any valid and collectible insurance’ " whenever Kolber drove a car he did not own. Emcasco, 139 Ill. App. 3d at 132.

The appellate court said:

"There are various recognized differences in general between an umbrella policy and a primary policy containing an excess insurance clause and specifically between the policies before us. Instead of examining the individual other insurance clauses, we believe we must construe the policies as a whole and the underlying policy considerations.


First, an umbrella policy, in contrast to a primary policy that contains another insurance clause, has been recognized as providing unique and special coverage. The synonym ‘catastrophe’ that is used to identify this type of policy supports this assertion. (See 8A Appleman, Insurance Law & Practice sec. 4906 (1981).) Umbrella or catastrophe coverage has been defined as ‘*** [A] needed form of coverage which picks up, above the limits of all other contracts, such as automobile and homeowners coverages, to give the security and […]