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Umbrella insurer wins argument over coverage

Continental Insurance Company wrote umbrella coverage for Federal-Mogul U.S. Asbestos Personal Injury Trust after the latter entity was assigned responsibility for asbestos-related injuries during Federal Mogul's bankruptcy.  Continental's policy listed an underlying liability insurance policy with Traveler's Insurance, and required Continental to assumer primary liability when the Traveler's coverage was exhausted.  In the fine print, however, the coverage "did not apply to defense, investigation , or legal expenses covered by underlying insurance."   Because two other primary policies, not listed in the Continental schedule, applied to some of these expenses, the Court held that Continental was not required to assume a primary role in the defense of claims when the scheduled carrier, Travelers, exhausted its coverage.

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