A $1.99 million settlement offer gone unanswered has sparked a legal fight between two insurers over who should’ve paid – and who didn’t.
Wesco Insurance filed a lawsuit on September 5 in the US District Court for the Northern District of California, claiming Sentry Insurance refused to settle a personal injury case within its policy limits. That refusal, Wesco argues, left it no choice but to contribute its own limits – even though, it says, Sentry was the primary insurer and should have covered the full amount.
At the center of the dispute is a personal injury lawsuit brought in California state court by Jaurice Hutson. He alleged that he was seriously injured on November 8, 2019, by a defective commercial washing machine manufactured by Alliance Laundry and sold by distributor Taylor Houseman.
Wesco provided commercial general liability coverage to Taylor Houseman. Sentry insured Alliance Laundry and extended vendor coverage through an endorsement that included “all vendors” of Alliance’s products in the US and Canada. Wesco says this made Taylor Houseman an additional insured under Sentry’s policy – making Sentry’s coverage primary and Wesco’s excess.
According to the complaint, both policies included the same “other insurance” clause from standard ISO language, stating that coverage is excess over “any other primary insurance available to you covering liability for damages arising out of… the products and completed operations, for which you have been added as an additional insured.”
In 2025, Hutson offered to settle his claims against Taylor Houseman for $1,999,999.99. That statutory offer under California law remained open for several months. Wesco says defense counsel appointed by Sentry to represent Taylor Houseman advised both insurers that the offer was reasonable, given the likely exposure. But Sentry declined to fund the settlement and didn’t provide any evidence that its limits were impaired.
Wesco says it urged Sentry to pay or at least show whether its limits were exhausted. When Sentry didn’t, Wesco authorized the use of its $1 million limit to help settle the claim. A non-party insurer paid the remaining amount needed to meet the offer.
That settlement was accepted on August 12, and judgment was entered for $1,999,999.99 on August 21.
Now, Wesco wants reimbursement. The company argues that Sentry breached its contractual obligations by refusing to settle when it had the chance, and that the failure unnecessarily exposed Taylor Houseman to liability. As Taylor Houseman’s excess carrier, Wesco says it was forced to pay because Sentry didn’t act.
Wesco also takes issue with how the defense was managed. It alleges that the same Sentry adjuster oversaw defense counsel for both Taylor Houseman and Alliance Laundry – but that neither Taylor Houseman nor Wesco was told about that arrangement. The complaint doesn’t claim legal wrongdoing from the shared supervision itself, but calls out the lack of disclosure.
At the time, Alliance Laundry had a $25 million excess liability policy from Federal Insurance Company. Wesco claims that coverage would have shielded Alliance from any impact if Sentry had paid out on behalf of Taylor Houseman.
For now, Wesco is asking the court to declare that Sentry should have paid and to order reimbursement of the $1 million Wesco contributed to the settlement.
While the case is just getting started, it touches on larger industry themes – how carriers handle additional insureds, what happens when coverage layers overlap, and how insurers coordinate (or don’t) on settlements. As Wesco tells it, the cost of not settling early landed squarely on them.
