In April 1977, a few weeks before I began practicing law, senior claims executives of eighteen liability insurance companies met to discuss the insurance implications of asbestos bodily injury claims. A majority of those at the meeting concluded:
“. . . that coverage existed for each carrier throughout the period of time the asbestosis condition developed, i.e. from the first exposure through the discovery and diagnosis. The majority also contended that each carrier on risk during any part of that period could be fully responsible for the cost of defense and loss.”
Rather than acknowledge this conclusion in responding to their policyholders’ asbestos claims, the insurance industry chose instead to dispute coverage and to seek narrower interpretations of their policies in courts across the country. The insurers’ efforts to restrict coverage have largely failed ever since. Except for one early decision, Eagle-Picher Industries, Inc. v. Liberty Mut. Ins., 682 F.2d 12, 25 (1st Cir. 1982) cert. denied 460 U.S. 1028 (1983), those insurers seeking to limit coverage to the period in which an asbestos-related disease first became “manifest” lost time and time again. Instead, courts have routinely adopted approaches consistent with the conclusion of the April 1977 meeting. These courts adopted a “continuous injury” approach, which found coverage under all policies in effect from first exposure to manifestation, Keene Corp. v. Ins. Co. of North America, 667 F.2d 1034 (D.C. Cir. 1981) cert. denied 455 U.S. 1007 (1982), or an “injury-in-fact” approach, which in practice has led to essentially the same result as “continuous injury.” Armstrong World Ind. V. Aetna Cas. & Sur., 52 Cal. Rptr. 2d 702-03 (Cal. App. 1 Dist. 1996) pet for review denied ________. Far less often, courts adopted an “exposure-only” approach, which found coverage under all policies in effect during actual exposure, but not during the period after last exposure to manifestation. Ins. Co. of North America v. Forty-Eight Insulations, 633 F.2d 1212, 1218-20, clarified 657 F.2d 814 (6th Cir. 1980) cert. denied, 454 U.S. 1109 (1981).
The insurers also sought rulings that, contrary to the majority view of the April 1977 meeting, would permit them to allocate portions of each claim to their policyholders by pro-rating liabilities to uninsured periods. The insurers had more success with this effort, but still failed to achieve their goal more often than not. Most courts, particularly state courts, have adopted the “all-sums approach” in concluding that any policy triggered by a claim is obligated to pay the entire amount of the claim up to the limits of the policy, subject to obtaining contribution from other insurers whose policies are also triggered by the same claim. [Armstrong, Keene] Fewer...
