Werner Industries, Inc. v. First State Insurance

The question in this case is whether the coverage under an excess “umbrella” liability insurance policy must “drop down” to become the first line of coverage for risks covered by the primary liability insurance carrier in the event of the primary carrier’s insolvency. We hold that the language of the excess policy here does not call for that result, and reverse the contrary ruling of the court below.

I

The facts of this case are quite simple. Werner Industries, Inc. (Werner) bought products liability insurance from two sources through the Rice Agency, an insurance broker. Werner purchased the…