Van Winkle • Baten Dispute Resolution

A surgeon was severely injured in an automobile accident and received $1,000,000 policy limits of the tortfeasor. Both doctor and insurance company agreed that the doctor was disabled from performing his job as a surgeon. The doctor was and will continue to receive disability benefits from a policy he purchased. The dispute was between the doctor and an insurer who wrote a commercial umbrella liability policy with a limit of $2,000,000. The parties agreed that the $1,000,000 received from the tortfeasor would be a set-off against the $2,000,000 UIM coverage, but the parties disagreed as to whether or not the doctor’s disability payments should work as a setoff. The insurer cited policy provisions reducing coverage by “underlying insurance” which included “any type of self-insurance or alternative method by which the ‘insured’ arranges for funding of legal liabilities which would also be insured under this policy”