Insurance Coverage in Asbestos Cases

Decisions in our library in which the court ruled on insurance coverage: 245 cases, by state. Each line gives what the court held, in our words; the law differs from state to state and changes, so read the opinion and talk to a lawyer before relying on any of them.

About this issue

Companies sued over asbestos often look to general liability policies they bought decades ago. Insurers may owe two separate things: the duty to defend (paying the cost of defending suits) and the duty to indemnify (paying covered settlements and judgments). Because an asbestos disease develops over many years, courts have had to decide which policies respond:

• Trigger: is a policy triggered by exposure, by the bodily injury developing, by manifestation of the disease, or by all of these (a continuous trigger)?
• Allocation: is the loss spread pro rata across the years of the injury process, and if so, who bears the years with no insurance? States differ, especially when coverage could not be bought. Or, under an "all sums" rule, may the company seek the whole covered loss from any triggered policy, up to its limits and subject to its terms and the rules for excess layers?
• Exclusions and limits: asbestos exclusions, aggregate limits, and whether each claim is a separate occurrence.

These cases rarely involve the injured person directly. They decide how much insurance money is available and who pays, not whether a person has a valid claim; a company may still be liable without insurance, and bankruptcy trusts are a separate source of payment.

Arizona

• City of Phoenix v. First State Insurance Company (2018). Under the policies' plain language, 'ultimate net loss' excludes defense costs and a 'No Costs' provision bars defense costs when a claim settles within the retained limit. The City therefore could not reach the excess or umbrella coverage, and its bad faith claim failed with it.

California

• Perez v. Century Indemnity Co. (1st Appellate District, 2nd Division, 2024). A suspended corporation's incapacity to sue passes to its assignee, so assigned claims filed while the corporation was suspended could not avoid expired limitations periods. Policy exclusions for products and for vehicle use or loading and unloading barred coverage because the alleged negligence was not independent of the van's use.
• Krueger v. Csaa Insurance Services, Inc. (5th Appellate District, 2021). A one-year suit limitation period in a homeowner's insurance policy is valid and enforceable. Delayed discovery, equitable tolling and equitable estoppel did not excuse the late filing where the insured showed no link between the later-discovered asbestos and the insurer's handling of her claims.
• Textron, Inc. v. Travelers Casualty and Surety Company (2nd Appellate District, 4th Division, 2020). Collateral estoppel applies only if the identical issue was actually litigated and decided in the earlier case, and a prior ruling that Rhode Island law governed policies covering claims in 19 states did not decide the choice-of-law question for a California injury. Judicial estoppel also fails where the party's positions in the two cases are not inconsistent.
• Carrera v. Johnson & Johnson (2019). A removed talc injury suit is not 'related to' a supplier's bankruptcy under the Pacor test where indemnity and shared-insurance provisions would require a further action to establish liability. Even if jurisdiction existed, 28 U.S.C. § 1452(b) permits remand on any equitable ground.
• Strobel v. Colgate-Palmolive Company (2019). A removing defendant cannot establish bankruptcy 'related to' jurisdiction from a non-party debtor's disputed indemnification or shared-insurance claims. Even if jurisdiction existed, equitable remand under 28 U.S.C. § 1452(b) was warranted.
• Continental Casualty v. Chatz for Cfb/wfb Trust (2018). A party that repeatedly told the court that a threshold ruling decided the case and that judgment should be entered against it is judicially and equitably estopped from later raising a new coverage defense. An insurer's vexatious and unreasonable delay in paying claims supports a penalty and fees under Section 155 of the Illinois Insurance Code.
• Polar-Mohr Maschinenvertriebsgesellschaft Gmbh, Co. KG v. Zurich American Insurance Company (2018). Under both California and New York law, a policy covering bodily injury "including death at any time resulting therefrom" requires "all sums" allocation rather than pro rata allocation. An insurer that breaches its duty to defend must rebut the presumption that the insured's defense costs are reasonable and necessary.
• In re Cfb Liquidating Corporation (2017). Under 215 ILCS 5/155, an insurer is liable for extra-contractual relief where its conduct is objectively unreasonable and injures the insured. A party that told the court it had lost on coverage is bound by that position and cannot reverse course, under both judicial estoppel and equitable estoppel.
• Flintkote Co. v. Aviva Plc (2016). Under California law and Fuller-Austin, an excess insurer's obligation to pay amounts the insured is 'obligated to pay' to a section 524(g) asbestos trust is limited to the trust's payment percentage, not the liquidated value. California Insurance Code section 1616 mandates a bond from a nonadmitted alien insurer that files a pleading.
• Flintkote Company v. Aviva Plc (2016). Under California law, following Fuller-Austin, an insurer whose policies cover sums the insured is 'obligated to pay' owes only the payment percentage the insured's § 524(g) asbestos trust actually pays claimants, not the claims' full liquidated value. Cal. Ins. Code § 1616 makes a bond mandatory for a nonadmitted alien insurer filing pleadings.
• In re Cfb Liquidating Corporation (2016). A chapter 11 plan is a contract interpreted under general contract rules (here Illinois law). The plan's term "allocated percentage" has its ordinary meaning, so an allocation of 100% is an allocation and no equitable contribution analysis was required.
• Walton v. OneBeacon Ins. Co. (2nd Appellate District, 4th Division, 2015). An insurer that pays its insured's defense costs under a policy is entitled to equitable and contractual subrogation to the insured's costs judgment. In asbestos cases, coverage is triggered by exposure to the insured's product before or during the policy period.
• Melendrez v. Superior Court OF State OF California (2nd Appellate District, 3rd Division, 2013). An attorney may verify a corporate party's discovery responses as its agent, which waives the attorney-client and work product privileges only as to the sources of the information. If a corporation no longer exists, its attorney-client privilege passes to its insurers as de facto assignee, and a court cannot simply deem responses verified.
• Bankhead v. Pneumo Abex LLC (1st Appellate District, 4th Division, 2012). A defendant that stonewalls discovery on its financial condition cannot complain about the exclusion of its unverified financial statement. Indemnity evidence admitted for a limited purpose, even if erroneous, does not require reversal when substantial evidence of the defendant's own wealth supports the punitive award.
• Crowley Maritime Corporation v. Boston Old Colony Insurance Company (1st Appellate District, 1st Division, 2008). An insurer's equitable contribution claim against co-insurers arises from equity, not contract, and a nonsignatory to the co-insurers' arbitration agreements with the insured cannot be compelled to arbitrate absent a recognized exception such as third-party beneficiary status, a preexisting relationship, or direct-benefit estoppel.
• Armstrong World Industries v. Aetna Cas. & Sur. (1st Appellate District, 1st Division, 1996). For asbestos bodily injury, coverage is continuously triggered from the claimant's first exposure to the policyholder's own products, and each triggered policy must respond in full up to its limits without the policyholder sharing in uninsured periods. 'Expected' injury means injury the insured subjectively knew to be practically certain, and a company acquired after a policy expired is not a named insured under it.
• Indus. Indemnity Co. v. Worker's Comp. App. BD. (2nd Appellate District, 3rd Division, 1983). Absent substantial medical evidence that an earlier period of employment was the exclusively hazardous exposure, Labor Code section 5500.5 requires the board to determine liability by the applicant's last date of exposure to asbestos, and it may not postpone that finding indefinitely.
• Skip Fordyce, Inc. v. Workers'comp. Appeals BD. (4th Appellate District, 2nd Division, 1983). A workers' compensation award must rest on substantial evidence of work-related asbestos exposure, and multiple-level hearsay from a doctor's report, a general pamphlet and an unsupported 'admission' that brake linings contain asbestos does not supply it. Medical opinions based on statistical studies can be substantial evidence of causation.

Connecticut

• RT Vanderbilt Company, Inc. v. Hartford Accident and Indemnity Company (2017). In long-latency asbestos claims, Connecticut applies a continuous trigger as a matter of law, with pro rata time-on-the-risk allocation and an unavailability-of-insurance rule. Pollution exclusions bar coverage only for traditional environmental pollution, while occupational disease exclusions reach claims by employees of any employer.
• RT Vanderbilt Co. v. Hartford Acc. & Indem. (2016). For long-latency asbestos disease claims, Connecticut applies a continuous trigger as a matter of law, with pro rata time-on-the-risk allocation and an unavailability-of-insurance rule. Standard pollution exclusions bar coverage only for traditional environmental pollution, and occupational disease exclusions unambiguously reach claims by employees of other employers.
• Yale University v. Cigna Ins. Co. (2002). Liability policies cover cleanup costs only if incurred because of actual third-party property damage, and an all risk policy's unambiguous contaminant/pollutant exclusion bars coverage for asbestos contamination of the insured's own buildings.

Delaware

• In re Reinz Wisconsin Gasket, LLC (2023). A person who is not a creditor, manager or member shows good cause for a receiver under 6 Del. C. § 18-805 by showing it is reasonably likely the cancelled LLC had assets, such as insurance policies, that it did not set aside for pending claims as 6 Del. C. § 18-804(b)(2) requires; a plaintiff with an unliquidated pending claim is not a creditor.
• Aiu Insurance Company v. Philips Electronics North America Corporation (2018). A contract clause giving insurers the right to "audit" payments made by an asbestos trust is ambiguous where both parties' readings are reasonable, so extrinsic evidence is needed. A non-party trust cannot be bound to the settlement agreement, and offset claims fail without pleaded conditions precedent.
• In re Viking Pump, Inc. (2016). Under New York law, anti-assignment clauses do not bar assignment of insurance rights for losses that occurred before the assignment. Whether defense costs are covered, and whether they erode limits, depends on each policy's language, with ambiguities construed against the insurer. Asbestos injury is a continuous process that begins at significant exposure and continues, so it is not limited to the period of exposure.
• Mine Safety Appliances Company v. Aiu Insurance Company (2014). The expected/intended policy language functions as an exclusion, so once the insured shows a prima facie case the insurers bear the burden to prove it applies. It applies only if the insured was substantially certain that a known failure of its product would cause the plaintiff's injury, not merely aware of general disease hazards.
• In re WR Grace & Co. (2012). A § 524(g) asbestos trust and channeling injunction may be confirmed where they are fair and equitable in light of the contributions made to the trust, they cover only derivative third-party liability, and the plan treats similar claims in substantially the same manner. Bankruptcy Code § 1123(a)(5)(B) preempts anti-assignment clauses in insurance policies so that the policy rights can be transferred to the trust.
• In re WR Grace & Co. (2012). A Chapter 11 asbestos plan satisfies Section 524(g) and the Bankruptcy Code if its trusts, channeling injunction, claim classifications and payment procedures treat similar claims alike. Liability insurance policies and their proceeds are property of the debtor's estate, and Bankruptcy Code Section 1123(a)(5)(B) preempts anti-assignment clauses in insurance policies.
• In re Federal-Mogul Global, Inc. (2010). Under the 1994 asset purchase agreement, indemnity obligations ran only between the parties to it and their successors, not to PepsiAmericas, which was not a party or third-party beneficiary and whose corporate affiliation with the seller ended before 1994.
• Viking Pump, Inc. v. Century Indemnity Company (2009). Under New York law, post-loss assignments of insurance rights are not barred by anti-assignment clauses. Where policies contain non-cumulation and prior insurance provisions, they are read to require all-sums allocation, and any remaining ambiguity is construed against the insurer.
• In re ACandS, Inc. (2004). A § 524(g) channeling injunction requires a trust that will value and pay similar present and future claims in substantially the same manner, and a plan that gives secured preference to some claimants and was driven by a plaintiffs' lawyers committee cannot be confirmed under § 1129(a)(1) or (a)(3).
• In re Combustion Engineering (2003). A § 524(g) channeling injunction can cover non-debtor affiliates only for liabilities shared with the debtor, not their independent direct claims. A § 105(a) injunction for those direct claims may be available if the Dow Corning factors are met.

District of Columbia

• Carey Canada Inc. v. California Union Ins. Co. (1989). Where an insurance exclusion for "asbestosis" is ambiguous, extrinsic evidence of the parties' objective intent may show it was used generically; the insurers proved by clear and convincing evidence that it excluded all asbestos-related disease claims, not just the single disease asbestosis.
• Carey Canada v. California Union Ins. Co. (1989). Whether a contract term is ambiguous is a question for the trial judge, and where an insurance exclusion for "asbestosis" is ambiguous, extrinsic evidence may be admitted to show the parties' intent, so summary judgment is inappropriate when intent remains disputed.
• Keene Corp. v. Insurance Co. of No. America (1981). Under occurrence-based general liability policies, coverage for asbestosis, mesothelioma and bronchogenic carcinoma is triggered by the claimant's exposure to asbestos, when bodily injury to tissue begins, not when the disease manifests; each insurer on the risk during exposure bears a pro rata share, and the insured bears a share for uninsured periods.

Florida

• Matter of Celotex Corp. (1997). Under Illinois law, timely and reasonable notice is a condition precedent to excess coverage, and a sophisticated insured must give notice when a reasonably prudent insured would believe the excess layers would be affected; the debtor bore the burden of proving notice and did not.
• Matter of Celotex Corp. (1996). Under Illinois law, asbestos in a building is covered "physical injury to tangible property" once it reaches a threshold such as fiber levels above outdoor levels or governmental limits, or a legal requirement to remove or remedy it; mere presence of asbestos-containing material is not enough. Coverage is triggered continuously over multiple policy periods, and the insured need not prove its own liability.
• Matter of Celotex Corp. (1994). Under the plain-meaning rule of Florida, Illinois, New York and Ohio law, extrinsic evidence cannot create an ambiguity in an insurance exclusion. "Asbestosis" is a single non-malignant disease, and "related diseases" covers only diseases resulting from asbestosis.

Illinois

• Lamorak Ins. Co. v. Kone, Inc. (1st District, 2nd Division, 2018). A policy that refers to a self-insured retention is not automatically excess insurance; characteristics such as immediate notice duties, a duty to defend, and premium size can show it is primary, and contemporaneous documents may resolve ambiguity. Documents a party produced in discovery and did not dispute producing can be treated as authenticated.
• Adams v. Employers Insurance Company OF Wausau (3rd District, 2016). Section 12.80 of the Business Corporation Act bars suits against a dissolved corporation, and its shareholders, after the five-year wind-up period. A declaratory action to reach the dissolved corporation's liability insurance without a liability determination is a prohibited direct action against insurers, and courts will not use equity to override the statute.
• John Crane, Inc. v. Admiral Insurance Company (1st District, 2nd Division, 2013). Under Zurich, coverage for asbestos personal injury claims is triggered by proof of exposure, sickness, or disease, and all triggered policies are jointly and severally liable for all sums up to their limits. Under horizontal exhaustion, the insured must exhaust the original primary limits before excess or umbrella insurers must pay, and an agreement amending those limits after the fact cannot lessen that requirement.
• John Crane, Inc. v. Admiral Insurance Company (1st District, 2nd Division, 2013). Under Zurich v. Raymark, coverage for asbestos personal injury claims is triggered by proof of exposure, sickness, or disease, and all triggered policies are jointly and severally liable rather than pro rata. Horizontal exhaustion requires the insured to exhaust all triggered primary policies at their original limits before excess coverage applies, and an insured and primary insurer cannot lessen those limits by retroactive amendment.
• Tkk USA Inc. v. Safety National Casualty Corporation (2011). Under Illinois law, an insurer must pay defense costs for the whole suit if any theory is potentially covered, and a policy covering 'Employers' Liability Laws' reaches a common-law negligence claim against an employer even if the Occupational Diseases Act's exclusive-remedy provision would likely bar it.
• Zurich Insurance Co. v. Raymark Industries, Inc. (1987). Under the policy language, an insurer must cover an asbestos claim if the claimant suffered bodily injury (at or shortly after exposure), sickness, or disease (when reasonably diagnosable) during the policy period. The duty to defend ends when policy limits are exhausted by payment of judgments or settlements.
• Zurich Ins. Co. v. Raymark Industries, Inc. (1st District, 1986). Under comprehensive general-liability policies, coverage for asbestos claims is triggered both by exposure (bodily injury) and by manifestation (disease), but not by the intervening period; each triggered insurer owes full indemnity and defense to the insured, and the duty to defend ends when policy limits are exhausted by payment of judgments or settlements.

Kentucky

• Kentucky Employers'mutual Insurance v. Hall (2024). An ALJ has authority under KRS Chapter 342 to decide which insurer covered the employer at the date of last exposure, and an insurer need not have been a formal party to be heard. No statute or regulation sets a deadline for a motion to certify coverage, so a motion filed within 30 days of the Supreme Court's final decision was timely.

Louisiana

• Prude v. Fidelity and Casualty Insurance Company OF New York (2025). Where the LHWCA's situs and status requirements are met and not disputed, workers' compensation is the employee's exclusive remedy against the employer, which bars tort wrongful death claims. The insurer's liability under Louisiana's Direct Action Statute is derivative of the insured employer's, so those claims are dismissed too.
• Sentilles v. Huntington Ingalls Incorporated (2025). A party seeking to supplement a pleading after the scheduling-order deadline must show good cause under Rule 16(b) and satisfy Rule 15(d). A party cannot base a bad faith claim on a delay that it jointly requested.
• Sentilles v. Huntington Ingalls Incorporated (2025). Under Louisiana law, an excess policy that has no duty to defend but indemnifies "ultimate net loss" including legal expenses must cover all of the insured's defense costs. The pre-tender bar and time-on-the-risk proration from duty-to-defend cases do not apply to such a policy.
• Ehlers v. Ports America Gulfport, Inc. (4th Circuit, 2024). An insurer (here LIGA) claiming a policy exclusion bears the burden of proving the exclusion was in the policies at issue, and a standard form and circumstantial evidence did not meet that burden where no actual policy containing the exclusion was produced.