Chubb Wins ‘Drop Down’ Insurance Dispute Over Asbestos Suits

Umbrella liability policies issued by Chubb Ltd. unit Federal Insurance Co. don’t require the insurer to “step down into the shoes” of “now insolvent primary insurers” and cover asbestos-related litigation against an industrial pump manufacturer, a federal court ruled.

“No ordinary insured could reasonably read the Federal Umbrella Policies to mean that, in the event of the insolvency of the scheduled underlying insurers, Federal would be required to drop down and step into the shoes of the insolvent insurers, both in providing a defense and paying first-dollar indemnity,” US Magistrate Judge N. Reid Neureiter of the US District Court for ...