Conditions Matter

Failure to Maintain Underlying Insurance Defeats Claim for Defense from Umbrella Insurer

Every insurance policy ever issued contains conditions that are the basis of the policy and must be fulfilled if an insured wishes to receive the benefits of the policy. Umbrella policies are designed to provide indemnity over basic underlying insurance. An umbrella policy, therefore, will consider that the policy will provide no benefits if the condition to maintain underlying insurance is breached by the insured.

In Ramji Govindarajan v. Government Employee Insurance Company, Case No. 18-cv-07797-JSC, United States District Court Northern District Of California (February 5, 2020) Ramji Govindarajan (“Plaintiff” or “Mr. Govindarajan”) sued his former insurer Government Employees Insurance Company (“GEICO” or “Defendant”) for failing to defend him in a defamation action filed in California state court.


Plaintiff purchased a GEICO “Personal Umbrella Policy” (the “Policy”) on or around May 27, 2016. The Policy became effective on May 28, 2016 and covered a period of one year. The Policy’s declarations page lists “Minimum Required Limits of Primary Insurance” for both automobile and “primary residence.”

The Policy’s “Part V – Defense of Suits Not Covered by Other Insurance” section required that the primary insurance must be maintained. Plaintiff did not maintain primary insurance on his residence at any time during the Policy.

Dr. Geeta Murali Ganesh filed the underlying defamation action. The complaint brought a single claim for defamation, alleging that unknown Doe defendants had “published numerous fake reviews about Rosebank and Dr. Ganesh” on (“RateMDs”), a website that allows users to provide reviews and comments on medical facilities and medical professionals.

The case was tried before a jury, and on January 10, 2018, the jury returned a verdict in favor of Mr. Govindarajan. The jury found that he did not make any of the 22 defamatory RateMDs posts at issue in the action. The court entered judgment in favor of Mr. Govindarajan in February 2018. Dr. Ganesh and Rosebank filed an appeal and the California Court of Appeal affirmed the judgment in August 2019.

Plaintiff filed a claim under the Policy seeking coverage related to the underlying action. GEICO Claims Attorney Michael A. Stodghill was assigned to investigate the claim.  Mr. Stodghill discovered that Plaintiff had personal automobile insurance but no primary residence insurance.

GEICO, thereafter, refused to provide Mr. Govindarajan with a legal defense to the lawsuit per the Umbrella Policy’s terms and conditions. Because GEICO asserted reservations of rights as to the defamation claim in the underlying action, it assigned “monitoring counsel” to attend the trial “in the event that the evidence . . . showed that the allegedly defamatory posts were published during the policy period.” Plaintiff spent over $350,000 in defending the underlying action.


An insurer owes a broad duty to defend its insured against claims that create a potential for indemnity. There is no duty to defend, however, where it has been shown that there is no potential for coverage.

The policy provided that a condition to Plaintiff receiving benefits under the Policy was that he maintain insurance on his primary residence. There is no dispute that Plaintiff did not carry any insurance on his primary residence at any time during the Policy period. Thus, under the Policy’s plain terms, Plaintiff did not meet the requirements for defense coverage.

Since Plaintiff did not have insurance on his primary residence at any time during the Policy period, and that such insurance was unambiguously a condition to any coverage under the Policy, Defendant met its burden of showing that it is entitled to judgment as a matter of law on Plaintiff’s claims.

It is undisputed that the unsuccessful defamation lawsuit Plaintiff’s former in-laws pursued against him extracted a heavy financial toll. However, it is also undisputed that Plaintiff did not satisfy the conditions to obtaining insurance coverage from Defendant for the defense of that lawsuit. Accordingly, the Court granted Defendant’s motion for summary judgment.


RTFP (Read the Full Policy) applies here. The condition that underlying insurance be maintained is a clear and unambiguous condition precedent to coverage. For the small cost of a homeowners policy the Plaintiff lost the chance of recovering his $350,000 in defense costs. If he, and his counsel, had RTFP, they would not have bothered filing this suit.

© 2020 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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