Colorado’s highest court has ruled that when a primary insurer goes broke, the excess carrier above it doesn’t have to pick up the tab.
The Supreme Court of Colorado answered a certified question from federal court on September 21, ruling unanimously that “not covered” in umbrella/excess policies refers to coverage scope – not whether the primary insurer can actually pay.
The case involved A.R. Wilfley & Sons, a Colorado pump manufacturer facing decades of asbestos bodily-injury lawsuits. Wilfley’s insurance was stacked in layers. At the base sat primary policies from Reliance Insurance Company. Above them, Federal Insurance Company – part of the Chubb group – had issued umbrella/excess policies.
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