Connecticut Supreme Court to Address Trigger of Insurance Coverage and Pollution and Occupational Disease Exclusions in Asbestos Litigation
On March 28, 2019, the Connecticut Supreme Court will entertain oral argument in the case of R.T. Vanderbilt Company, Inc. v. Hartford Accident and Indemnity Company, in which the Court will address significant insurance coverage issues that often arise in asbestos litigation and other cases involving progressive injuries which expand over the course of many years due to a delay in time between an initial event that exposes a person to an injury and manifestation of the injury.
R.T. Vanderbilt was named as a defendant in thousands of personal injury and wrongful death lawsuits arising from individuals’ alleged exposure to industrial talc mined and sold by R.T. Vanderbilt that purportedly contained asbestos. R.T. Vanderbilt sought defense and indemnity coverage from approximately thirty insurance companies that insured the company over the course of sixty years during which the injured parties were purportedly exposed and injured. The multiple insurance coverage issues that arose in litigation between R.T. Vanderbilt and its insurers included which insurers must provide defense and indemnity coverage and whether certain exclusions in various insurance policies apply so as to bar coverage.
The first issue to be decided by the Supreme Court is which insurance policies are triggered in an asbestos-related injury case. Trigger of insurance coverage is a concept courts use in insurance cases to determine whether and when an event implicates a particular insurance policy. Some states follow what is known as the “all sums” approach, under which a policyholder is permitted to collect its total liability under an insurance policy, up to the limits of the insurance policy, under any policy in effect during the period in which a progressive injury occurred. The burden then rests on a legally responsible insurer to seek contribution from other insurers that issued other applicable insurance policies. Other states follow the “pro-rata” approach, under which a policyholder’s losses are allocated equally at the outset between all time periods during which a progressive injury occurs and then allocated to applicable insurance policies during that those periods based on the limits of coverage under each policy.
The Connecticut Appellate Court in R.T. Vanderbilt recognized that the Connecticut Supreme Court has yet to decide whether a continuous trigger theory of insurance law or some other trigger theory should govern asbestos-related claims in Connecticut. The court adopted the continuous trigger of theory of insurance law for asbestos cases, holding that every insurance policy in effect for an asbestos case from the time of initial asbestos exposure up through the manifestation of an asbestos related disease is triggered and on the risk for a policyholder’s defense and liability costs. The court also ruled that a policyholder is not responsible for defense and liability costs in years in which occurrence-based insurance coverage for asbestos-related injuries was not available to the policyholder. The Connecticut Supreme Court will now decide whether this theory of insurance law should be the law in Connecticut for asbestos-related diseases.
The Supreme Court will also address whether the standard pollution exclusion found in many commercial generally liability policies applies in cases arising from exposure to toxic substances, such as asbestos, during the intended use of a product. The standard pollution exclusion generally bars coverage for personal injury arising out of the discharge or escape of pollutants. The Appellate Court concluded in R.T. Vanderbilt that the pollution exclusion is ambiguous when applied to a case involving alleged exposure to asbestos dust released in small quantities in an indoor environment during everyday activities such as manufacturing, laundering or remodeling. As a result, the exclusion does not bar coverage under such scenarios. The Connecticut Supreme Court will decide whether that be the applicable law in Connecticut.
Finally, the Supreme Court will address whether an exclusion in a commercial general liability policy for personal injury “by occupational disease” should apply only to claims brought by a policyholder’s employee who contracted a disease in the course of their occupation with the policyholder, or whether it applies to a claim by any individual who contracted an occupational disease in the course of their work for employers other than the policyholder. The trial court R.T. Vanderbilt ruled as a matter of first impression in Connecticut and nationally that the occupational disease exclusion only bars coverage for occupational disease claims filed by a policyholder’s employees. The Appellate Court, however, ruled that the exclusion should not be interpreted so narrowly. The court ruled that the occupational disease exclusion bars coverage not only for a policyholder’s employees who contract an occupational disease in the course of their work for a policyholder, but it also operates to exclude coverage for claims by individuals who contracted an occupational disease in the course of their work for other employers. The Supreme Court will determine whether this is a proper interpretation of the occupational disease exclusion.