A.R. Wilfley & Sons, Inc. v. National Union Fire Insurance Co. of Pittsburgh, Pennsylvania.

2026 CO 64. No. 25SA265. Insurance—Contract Interpretation—Scope of Coverage—Umbrella/Excess Carriers—Deisch & Marion, P.C. v. International Insurance Co.

September 21, 2026

The parties’ dispute in this insurance case centered on the umbrella/excess carrier’s obligation to defend against any occurrence “not covered” by the insured’s primary policies. The carrier and the insured offer competing interpretations of “not covered,” each yielding a different outcome. One reading construes “not covered” to mean the primary policies do not insure against the occurrence at all. The other reads “not covered” more broadly to include situations where the primary policies do insure against the occurrence but cannot pay because the primary carrier is insolvent.

Under the first reading, the umbrella/excess policies remain dormant because the occurrence is covered by the primary policies and their limits have not been reached due to the primary carrier’s insolvency. Under the second, the umbrella/excess policies are triggered because payment cannot be collected from the primary carrier even though the occurrence is otherwise covered. The choice between these interpretations is dispositive.

The certified question from the federal district court asked whether the primary carrier’s insolvency places a covered occurrence in the “not covered” category, thereby requiring the umbrella/excess carrier to drop down and provide first-dollar indemnity and defense costs. Put differently, does “not covered” include a covered occurrence when the primary carrier cannot pay? Based on the unambiguous language in the umbrella/excess policies, the supreme court answered “no.” “Not covered,” as used in those policies, addresses the scope of coverage, not the collectibility of payment.

The policies distinguish coverage from collectibility, making collectibility relevant only when the primary policies are not scheduled—and here, the primary policies are scheduled. Because the umbrella/excess policies do not insure against the financial misfortune of a scheduled primary carrier selected by the insured, they do not drop down due to the primary carrier’s insolvency. A covered occurrence remains covered even when the primary carrier is insolvent.

The division’s decision in Deisch & Marion, P.C. v. International Insurance Co., 771 P.2d 19 (Colo.App. 1989), does not alter this conclusion. That case is distinguishable, and its most relevant passage is dictum. In any event, to the extent Deisch is incompatible with this decision, it is overruled.