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.

New Jersey

• Commissioner of Insurance v. Integrity Insurance Company (2012). Under N.J.S.A. 17:30C-28a, only claims that are 'absolute' (liability and value fixed by payment or judgment, standing on their own) may share in an insolvent insurer's estate. Grace's estimated asbestos claims were not absolute, and its bankruptcy did not change that.
• In re Congoleum Corp. (2009). Pre-petition settlement payments to claimants who retained no stub claims against the estate did not create unequal treatment under Combustion Engineering, but fees paid to claimants' counsel are subject to court approval as reasonable under 11 U.S.C. § 1129(a)(4). Dismissing a Chapter 11 case sua sponte without notice and a hearing on creditors' best interests was an abuse of discretion.
• In re Congoleum Corp. (2007). A § 524(g) plan must give the trust a majority of voting shares through a contingency that would operate while the shares still have meaningful value, and must treat similar asbestos personal injury claims in substantially the same manner. Separate classification and preferential treatment of pre-petition settling claimants violates that requirement.
• Owens-Illinois, Inc. v. United Ins. Co. (1994). Progressive, indivisible injury from asbestos exposure may be treated as an occurrence in each year of a CGL policy (the continuous trigger). Costs are then allocated by time on the risk and degree of risk assumed, and the policyholder bears a share for periods when it chose to go uninsured, rather than joint-and-several liability of any one triggered insurer.
• Owens-Illinois, Inc. v. United Ins. Co. (1993). For asbestos liability coverage, the court adopted a continuous trigger covering the period from exposure to manifestation, and held that each triggered insurer is liable for the full loss up to its limits, subject to other-insurance clauses, rather than a prorated share. Questions of waiver, intent and fraud turn on state of mind and ordinarily cannot be decided on summary judgment.
• Lac D'Amiante Du Quebec v. Am. Home Assur. Co. (1985). Under New Jersey law as predicted by the court, ambiguous CGL and umbrella policies are triggered by exposure, exposure in residence, and manifestation of asbestos disease or damage, and each triggered insurer is jointly and severally liable for the full loss and defense costs without proration, subject to contribution.

New York

• Ironshore Specialty Insurance Company v. Color Techniques, Inc. (2024). Under New York law, an insurer may use extrinsic evidence that merely clarifies which claims an underlying plaintiff actually brings, without going to the merits, to show no claim falls within coverage. Coverage for the insured's 'work' covers services, not products, so product-based claims fall under the products coverage and its asbestos exclusion.
• Meissner v. Ridge Constr. Corp. (4th Dept., 2024). In an excess-coverage dispute over an asbestos judgment, an all-sums allocation applies where the excess policies contain non-cumulation clauses. Whether an injured plaintiff gave the insurer notice within a reasonable time, and when asbestos injury-in-fact occurred where experts conflict, are fact questions that cannot be decided on summary judgment.
• Utica Mut. Ins. Co. v. Abeille Gen. Ins. Co. (Oneida, 2023). Where blank aggregate-limit spaces made primary policies ambiguous, uncontradicted extrinsic evidence of the parties' conduct, premiums, industry custom and a settlement established as a matter of law that a $300,000 aggregate limit was intended. A breach of a warranty of retention does not defeat recovery unless it materially increases the risk of loss.
• Matter of Miller v. Mo Maier Ltd. (3rd Dept., 2022). The Board's decision whether to reopen a claim in the interest of justice is reviewed only for abuse of discretion, and none was found where the carrier failed to appear at the hearing and failed to properly seek review.
• Matter of Miller v. Mo Maier Ltd. (3rd Dept., 2019). Where a represented party fails to use the Board's prescribed current form for an application for review, the Board may in its discretion deny review under 12 NYCRR 300.13, and a court will not disturb that decision absent abuse of discretion.
• Konstantin v. Certain Underwriters AT Lloyd's London (2018). On a motion to dismiss, a tortious-interference claim is sufficiently pleaded if it alleges the elements, and the claim is not barred by agent immunity where the agent is alleged to have acted in bad faith and in a predatory manner.
• National Union Fire Ins. Co. OF Pittsburgh, PA v. Burlington Ins. Co. (2018). An insurer's duty to defend is triggered where the underlying complaints potentially fall within coverage, and a pollution or asbestos exclusion does not defeat that duty unless the allegations fall solely within it. Further notice to an insurer that has repeatedly disclaimed on the same grounds is excused as futile.
• Watts v. A & J Plumbing & Heating Corp. (2018). A corporation that buys another's assets is not liable for the seller's torts unless it assumed the liability, there was a de facto merger or mere continuation, or the sale was fraudulent. The asset purchase agreement here excluded liability for product claims based on occurrences on or before the closing date.
• American Home Assur. Co. v. Port Auth. of NY & NJ (2017). Where a liability policy requires that the insureds' operations occur during the policy period, rather than the injury, coverage is triggered by injury arising out of those operations. Under New York's unfortunate-event test, asbestos exposure claims from different times, places and methods are multiple occurrences.
• Konstantin v. Aetna Cas. & Sur. Co. (2017). A judgment creditor who satisfies Insurance Law § 3420 stands in the insured's shoes and may seek declaratory relief and proceed as a third-party beneficiary, but a GBL § 349 claim fails where the insurance dealings are between sophisticated parties and are not consumer-oriented.
• Mineweaser v. One Beacon America Insurance Company (2015). Settlement agreements relevant to the merits of the claims are judicial documents carrying a strong presumption of public access, and the defendants showed no compelling reason to keep them sealed.
• Usf&g Co. v. American Re-Ins. (2013). A follow the settlements clause requires deference to a cedent's allocation of a settlement, but the allocation binds the reinsurer only if it is objectively reasonable, meaning one the parties might reasonably have reached in arm's length negotiations without reinsurance. Matching the allocation used in the underlying settlement does not by itself show reasonableness.
• US Fid. & Guaranty Co. v. American Re-Ins. Co. (1st Dept., 2012). Under a follow-the-fortunes clause, a reinsurer must accept its reinsured's good-faith allocation and settlement of covered losses and cannot second-guess them; collateral estoppel applies only to issues actually litigated and decided.
• Hall v. Kodak Occupational Accidental Death Insurance Plan (2011). Under the plain terms of the accidental death plan, death from an occupational disease such as mesothelioma, occurring years after the exposure, is not death from a sudden accident or within one year of injury while working, and the plan excludes death caused by disease. Without coverage under that plan, survivor benefits under the linked medical assistance plan also fail.
• United States Fidelity & Guaranty Company v. American Re-Insurance Company (2010). Under a follow-the-settlements clause, a reinsurer must reimburse a cedent's good-faith settlement payment that is at least arguably within the reinsured coverage. The reinsurer may not second-guess the cedent's allocation method or look behind the settlement to how funds were distributed to individual claimants.
• IN the Matter of Mlodozeniec v. Trio Asbestos Removal Corp. (3rd Dept., 2009). Where a carrier has a policy in place on the date of an employee's disablement from an occupational disease, that carrier is responsible for the award even if it was not the carrier when the employee was last exposed.
• Continental Casualty Co. v. Employers Ins. Co. of Wausau (1st Dept., 2008). Under New York's direct action statute, injured claimants stand in the insured's shoes and are subject to the insurer's equitable defenses, including laches. Coverage for asbestos injury is triggered by injury-in-fact, not by exposure.
• Barbara Commarata v. Cook, Inc. (3rd Dept., 2005). Substantial evidence supported the Board's finding that Merchants was the employer's workers' compensation carrier in 1965, with coverage presumed to continue absent proof of cancellation or refusal to renew.
• IN the Matter of Cammarata v. Caldwell & Cook, Inc. (3rd Dept., 2005). In an occupational disease claim, liability falls on the last employer in the employment that caused the disease, so the carrier at risk during that employment pays. A carrier's coverage is deemed to continue absent evidence of cancellation or non-renewal. The Board may rely on the claimant's expert on causation when there is no contrary evidence.
• Matter of Midland Insurance Company (1st Dept., 2000). Under New York law, an excess asbestos liability policy covering an "occurrence" defined as continuous or repeated exposure is triggered by inhalation exposure during the policy period, whether first or later, but not by exposure "in residence" or manifestation.
• In re Prudential Lines, Inc. (1996). Where extrinsic evidence of the parties' practice does not resolve an ambiguous term in an insurance policy, the meaning is decided as a matter of law, and under New York's contra proferentem rule the reasonable construction most favorable to the insured is adopted.
• Matter of Midland Ins. Co. (1994). Where the underlying policy covers an 'occurrence' (an event including continuous or repeated exposure) happening during the policy period, coverage is triggered by exposure to asbestos during the policy period, not by the continuing progression of disease after exposure ends.
• In re Prudential Lines, Inc. (1992). Under New York law, injury-in-fact during the policy period triggers coverage under a yearly P & I policy, and a policy deductible applies once per occurrence (the underlying event), not once per claim. Where medical evidence cannot apportion injury among triggered policies, each triggered policy is liable up to its limit.
• In re Johns-Manville Corp. (1984). Future asbestos claimants who were exposed before the filing date but have not yet manifested disease are parties in interest under Bankruptcy Code section 1109(b), and the court may appoint a legal representative for them under its equitable powers (28 U.S.C. 1481 and 11 U.S.C. 105(a)).
• American Home Prod. v. Liberty Mut. Ins. Co. (1983). Under New York law, liability policies covering injury, sickness or disease occurring during the policy period are triggered when an actual, diagnosable and compensable injury is shown to have occurred in the policy period, not simply by exposure or by manifestation or discovery.
• Matter of LA Gattuta v. Baldwin Ehret-Hill, Inc. (3rd Dept., 1971). Liability for an occupational disease award falls on the carrier on the risk on the date of disablement, since the disablement, not the contraction of the disease, is the industrial accident. The board's finding of asbestos exposure at the site was supported by substantial evidence.

North Carolina

• In re Aldrich Pump LLC (2021). Under the Texas divisional merger statute the asbestos liabilities belong only to the debtors, so suits against non-debtor affiliates to recover them are stayed under section 362(a)(1). Claims such as fraudulent transfer, alter ego and successor liability are estate property or belong first to the trustee, and are stayed under section 362(a)(3). A preliminary injunction under section 105 was warranted because such suits would interfere with reorganization.
• Finch v. Covil Corporation (2020). A non-party insurer that knew of its insured's receivership for decades but did not examine public court records cannot timely intervene or obtain Rule 60(b)(2) relief after judgment. A Rule 60(b)(4) motion based on a claimed statute-of-repose jurisdictional bar fails where there was at least an arguable basis for diversity jurisdiction.
• Zurich American Insurance Company v. Covil Corporation (2020). Under South Carolina law (Crossmann), a loss from progressive injury spanning several policy periods is allocated pro rata by each insurer's time on the risk, with the insured bearing uninsured years. A federal court should not decide hypothetical coverage questions and declines declaratory jurisdiction where they are not tied to a concrete claim.
• Zurich American Ins. Co. v. Covil Corporation EX rel. Protopapas (2019). Under Rule 19, a receiver acting for the insured and underlying asbestos claimants in another state were not necessary parties to the insurers' declaratory judgment action. Colorado River abstention applies only to parallel federal and state suits, not to a parallel suit in another federal court.
• In re Garlock Sealing Technologies LLC (2017). A reorganization plan that creates an asbestos trust, was approved by the required 75% of voting asbestos claimants, and meets the other requirements of Bankruptcy Code section 524(g) and section 1129 may be confirmed with a channeling injunction protecting the debtors and related parties.
• Richardson v. Pcs Phosphate Company, Inc. (2014). Under N.C. Gen. Stat. § 97-57, last injurious exposure is an exposure that proximately augmented the disease to any extent, however slight, and the Commission decides credibility and weight of the evidence. Competent evidence that the worker continued to visit asbestos areas supported a 1995 last-exposure date.

Ohio

• RW Beckett Corp. v. Allianz Global Corp. (2020). Under Ohio law, "atmosphere" in a pollution exclusion is ambiguous as to whether it covers air inside a residential basement, so the exclusion is construed against the insurer. A non-settling insurer seeking a settlement credit must show the settling insurer's payment was for the same damages.
• Penn. Gen. Ins. v. Park-Ohio Ind. (2010). Ohio keeps the all-sums method of allocating coverage among insurers for progressive injury, and the insured must cooperate with the targeted insurer by identifying other policies. A targeted insurer's contribution claim against a nontargeted insurer is barred for lack of notice only if the nontargeted insurer was prejudiced by it.
• Pennsylvania Gen. Ins. Co. v. Park-Ohio Industries, Inc. (8th Appellate District, 2008). Under Ohio's all-sums approach, an insurer selected by the insured that pays an entire asbestos settlement may seek equitable contribution from the insured's other triggered primary insurers. The insured's breach of notice provisions in the other insurers' policies does not defeat that claim, because contribution rests on equity rather than contract.
• Owens-Corning Fiberglas Corp. v. Am. Centennial Ins. (1995). Under Ohio law, a continuous-injury trigger applies to asbestos claims under these excess policies, and the insured may recover in full from any one triggered insurer. The court also declined to adopt a separate known loss doctrine and held that Ohio law bars insuring punitive damages.

Oklahoma

• In re Imerys Talc America, Inc. (2019). Bankruptcy 'related to' jurisdiction over a suit between non-debtors does not arise from indemnification or insurance agreements with the debtor when the defendant has not shown they apply and a separate later lawsuit would be needed to enforce them. The court also stated it would remand on equitable grounds under 28 U.S.C. § 1452(b).

Oregon

• Portland General Electric Company v. Ebasco Services, Inc. (2012). A court lacks jurisdiction to enter a default judgment for more than the amount prayed for in the complaint unless the defaulting party had reasonable notice and opportunity to be heard; a complaint that requests no specific amount supports no default money judgment.
• Matter of Compensation of Fossum (1982). Under the last injurious exposure rule, liability depends on which employment involved conditions that could have caused the disease, not which one actually did. The last potentially causal employer is solely liable, and the statutes in force at the time established as a matter of law that SIAC (now SAIF) covered a shipbuilder that had not opted out.

Other federal courts

• Fidelity and Guaranty Insurance Underwriters, Inc. v. US (2015). The Tucker Act's waiver of sovereign immunity does not extend to a general liability insurer suing as equitable subrogee of a prime contractor, because the insurer never stepped into the contractor's shoes in contract performance.
• Tkk USA, Inc. v. Safety National Casualty Corp. (2013). Under Illinois law, an excess policy covering liability under "Workers' Compensation or Employers' Liability Laws" includes employee common law claims against the employer, even groundless ones barred by the occupational diseases act's exclusivity provision; ambiguity is construed against the insurer.
• In re Federal-Mogul Global Inc. (2012). Section 1123(a)(5)(B) of the Bankruptcy Code expressly preempts anti-assignment provisions in insurance policies to the extent they bar transfer of insurance rights to a § 524(g) asbestos trust under a reorganization plan.
• In re Congoleum Corp. (2005). Pre-petition conduct of a law firm in negotiating a pre-packaged asbestos plan is relevant to whether it may be retained as debtor's counsel. A firm with unwaived concurrent conflicts, serving as co-counsel for claimants and counsel for the debtor, violates the Rules of Professional Conduct and the disinterestedness requirement of 11 U.S.C. § 327(a).
• Riverwood International Corp. v. Employers Insurance of Wausau (2005). Under Louisiana contract-interpretation rules, the only reasonable reading of these workers' compensation and employers' liability policies is that an asbestos-related disease is a "bodily injury by disease," not a "bodily injury by accident," so the thirty-six month exclusion for disease claims applies.