Category Archives: Insurance Coverage

Reinsurer Not Automatically Bound to Follow Asbestos Settlement That May Have Been Targeted at Access to Reinsurance U.S. District Court for the Northern District of New York, February 24, 2017

Utica Mutual Insurance Company had issued multiple policies of insurance to Goulds Pumps. Goulds became the subject of thousands of asbestos bodily injury claims. Eventually, Utica reached a $325 million settlement with Goulds for payment under the various insurance policies on the asbestos claims. Utica then sought indemnity for portions of the settlement from its reinsurers, including a $35 million claim against Fireman’s Fund Insurance Company (FFIC). The court here ruled on several motions to eliminate various claims and defenses. Most notably, both parties had…

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Four Corners Rule Determines Employment Status in Coverage Case U.S. District Court for the Eastern District of Pennsylvania, January 26, 2017

Burns & Scalo Roofing Co. was the defendant in an underlying state court action brought by a former employee who had developed mesothelioma due to exposure to asbestos while employed by Burns & Scalo. Burns & Scalo sought defense and indemnity from National Union, which had issued occurrence-based policies to Burns & Scalo for a four-year period after the underlying plaintiff’s employment had ended. After initially denying coverage, National Union agreed to defend Burns & Scalo under a reservation of rights. National Union then filed…

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New York Federal Court Refuses to Apply Viking Pump Without First Receiving Briefs From Parties U.S. District Court for the Southern District of New York, December 21, 2016

Columbus McKinnon Corporation (CMCO) sued Travelers Indemnity Company and Liberty Mutual Insurance Company alleging that insurance policies issued to CMCO obligate them to defend and indemnify CMCO with respect to thousands of lawsuits filed against CMCO for personal injury allegedly caused by exposure to asbestos-containing products manufactured and sold by CMCO and its predecessors. CMCO sought leave to file an expedited motion seeking to compel Liberty Mutual to pay 100 percent of CMCO’s defense costs in the underlying lawsuits based on the New York Court…

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Sixth Circuit Applies Pro-Rata Allocation for Michigan, Allows Reimbursement U.S. Court of Appeals for the Sixth Circuit, December 16, 2016

Indian Head acquired a gasket manufacturing company that had for some time produced gaskets containing asbestos and continued to manufacture and sell such gaskets for five years after the acquisition. Shortly after acquiring the manufacturing company, Indian Head purchased three consecutive liability insurance policies from Continental Casualty Company. Later, Indian Head was sued in thousands of lawsuits for asbestos-related injuries. The Continental policies had an exclusion precluding coverage for any liability assumed “under any contract or agreement” except for an “incidental contract,” defined as a…

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Ohio Appellate Court Applies Triggering-Event Theory of Occurrence, Annualization of Policy Limits in Asbestos Coverage Matter Court of Appeals of Ohio, First Appellate District, Hamilton County, December 14, 2016

The William Powell Company makes industrial valves. Some valves manufactured before 1987 contained asbestos. In 2001, Powell began receiving personal-injury claims emanating from asbestos exposures involving its products. Faced with potentially thousands of claims, Powell sought defense and indemnification under various insurance policies. At issue here were occurrence-based policies that were written by a predecessor to OneBeacon Insurance Company between 1955 and 1977. OneBeacon asked the court to define “occurrence” as used in the policies as Powell’s decision to manufacture valves containing asbestos without providing…

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Bankruptcy Injunction Extends to Debtor’s Insurers U.S. Bankruptcy Court for the District of Delaware, October 17, 2016

W.R. Grace & Co. (Grace), a Chapter 11 bankruptcy debtor, at one time operated a vermiculite mine, and related mining activities released asbestos-containing dust into the atmosphere. It began facing asbestos-related lawsuits in the 1970s. Grace filed a voluntary Chapter 11 bankruptcy in 2001, and a plan of reorganization was confirmed in 2014. The plan created a trust for the payment of asbestos personal injury claims. As part of a settlement agreement, one of Grace’s liability, excess, and workers’ compensation insurers, Continental Casualty Company and…

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Pro Rata Allocation and Exposure Trigger Confirmed in New York Federal Court Decision for Insurers U.S. District Court for the Northern District of New York, September 29, 2016

Troy Belting & Supply Co. was named as a defendant in lawsuits alleging bodily injury caused by exposure to asbestos from products it manufactured. It became involved in a dispute with its insurers over coverage for the costs of settling such lawsuits. Pacific Employers provided coverage for Troy Belting from 1974 to 1984, and various Hartford Insurance Company entities provided coverage from 1984 to 1992. Pacific Employers and Hartford sought reimbursement from Troy Belting for cases where they paid 100 percent of the settlement costs…

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Delaware Justices: Asbestos Injury Triggers Coverage Continually from First Significant Exposure Supreme Court of Delaware, September 12, 2016

The Delaware Supreme Court took up several issues in the ongoing dispute between plaintiffs, Viking Pump, Inc. and Warren Pumps, LLC, and various insurers who issued excess policies to Viking and Warren’s predecessor, Houdaille Industries, Inc. between 1972 and 1985 (the Excess Insurers). Houdaille, and later Viking and Warren, manufactured pumps containing asbestos, and a multitude of claims against Viking and Warren related to asbestos exposure have given rise to a lengthy dispute between Viking and Warren and their insurers. In the present decision, the…

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Court Rules Summary Judgment Not Appropriate Due to Ambiguity on How Non-Cumulation Clause Operated U.S. District Court for the Southern District of New York, August 5, 2016

Liberty Mutual Insurance Company issued successive annual insurance policies to the Fairbanks Company from January 1, 1974 to January 1, 1982. Liberty issued both comprehensive general liability and umbrella policies. Multiple lawsuits were filed in several jurisdictions against Fairbanks, alleging injuries due to exposure to asbestos, and this coverage litigation resulted. On March 21, 2016, the court ruled on Liberty’s motion for summary judgment, concluding that the policies were subject to pro rata allocation such that Liberty was only liable to indemnify Fairbanks for the…

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No Liability Coverage Allocation for Manufacturers Who Continued Making Products with Asbestos After 1987 N.J. App. Ct. July 20, 2016

  A New Jersey appellate court held that policyholders who continued to manufacture products containing asbestos after 1987 — when coverage for injuries arising from such products was no longer available — need not shoulder any portion of liability for injuries related to asbestos exposure from their products, so long as any portion of such exposure occurred prior to 1987. The Bendix Corporation, predecessor of Honeywell International, Inc., manufactured and sold brake and clutch pads that contained asbestos. Honeywell has been sued in tens of…

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