Texas Employers Insurance v. Underwriting Members of Lloyds
The case involves a dispute between a primary insurer, Texas Employers’ Insurance Association (TEIA), and several excess liability insurers (The Underwriting Members of Lloyds, et al.) over the reimbursement of defense costs incurred in an underlying lawsuit. TEIA, Monsanto's primary insurer, defended Monsanto in a toxic tort case, paying its $1 million indemnity limit and $4,057,245 in attorneys’ fees and costs. TEIA sought contribution and indemnity from the excess carriers, alleging they were responsible for defense costs and breached a duty of good faith. The Court granted summary judgment for the Defendants, holding that under Texas law and the unambiguous terms of the insurance policies, excess insurers are not obligated to participate in defense costs until the primary policy limits are exhausted. The Court also found TEIA's purported tender of its policy limits invalid and dismissed its claim for breach of the duty of good faith and fair dealing.