Delaware Supreme Court Affirms No Excess Coverage in GM Asbestos Cases Motors Liquidation Company DIP Lenders Trust v. Allstate Ins. Co. et al., No. 381, 2017, 2018 WL 3360976 (Table) (Del. July 10, 2018)

DELAWARE — The Delaware Supreme Court affirmed that several excess policies issues to General Motors do not provide coverage for asbestos-related and environmental claims against the company.  GM purchased primary coverage from Royal Insurance Company for more than 50 years ending in 1993.  Royal handled asbestos claims made under the policies during that period.  The claims at issue were filed after 1993.  Following declaratory judgment actions filed in both Delaware and Michigan, GM and Royal reached a settlement that released all of Royal’s policies from further liability.

From 1972 on, the Royal policies included an endorsement that made them “claims-made” policies rather than “occurrence” policies.  Thus, from 1972 on, the Royal policies covered only claims first made during the policy period.  The court here affirmed that the claims at issue were not covered under any of the post-1971 policies.  Because there was no coverage under the primary policies from 1972 on, the excess policies were not triggered.  The court affirmed this holding even though some of the post-1971 excess policies included broader, occurrence-based trigger language.

As to the pre-1972 policies, the parties disagreed as to whether “pro rata” or “all sums allocation” would apply.  The court affirmed that, pursuant to Michigan law, “pro rata” allocation would apply given the language of the excess policies at issue.  The effect of the ruling was to grant summary judgment to the pre-1972 excess insurers

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