New York Court Finds That Aggregate Limits Do Not Apply To Asbestos Installation Claims

This article was co-written by Scott N. Godes Esq., of Dickstein Shapiro LLP

Continental Casualty Co. v. Employers Insurance Co. Of Wausau

Commentary

Continental Casualty Co. v. Employers Insurance Co. Of Wausau New York Court Finds That Aggregate Limits Do Not Apply To Asbestos Installation Claims

[Editor's Note: August J. Matteis, Jr. is a partner at Gilbert Randolph LLP, and Scott N. Godes, formerly of Gilbert Heintz & Randolph LLP, is now an associate at Dickstein Shapiro LLP, both in Washington, D.C. While at the firm, now known as Gilbert Randolph, they served as lead trial counsel for the Defendant Class in Continental Casualty Co. v. Employers Insurance Co. of Wausau, the case discussed in this article. The views and opinions expressed in this article are solely those of the authors and not necessarily those of their current or former law fi rms and/or clients. Copyright 2007 by the authors. Responses to this article are welcome.]

Introduction

One of the most hotly contested questions in the asbestos insurance coverage area is whether certain asbestos-related bodily injury claims fall outside of the products hazard and completed operations hazard in standard form comprehensive general liability ("CGL") policies. Insurers view this as a "bet the company" dispute because third-party claims that fall outside of those hazards so-called non-products claims are not subject to aggregate limits in most CGL policies.

Insurers generally take the extreme position that all asbestos claims come within the products and/or completed operations hazards, and are therefore subject to aggregate limits. Policyholders, on the other hand, argue that claims that arise out of the operations of a business, such as claims brought against an insulation contractor arising from the installation process, fall outside of the products and completed operations hazards.

Although this non-products dispute arises with some frequency in settlement discussions and confidential arbitrations, very few courts have spoken on the issue. But on May 8, 2007, Justice Richard F. Braun of the New York Supreme Court, New York County, addressed precisely this issue after a 34-day trial. In Continental Casualty Co. v. Employers Insurance Co. of Wausau, No. 601037/03, N.Y. Sup., N.Y. Co.; 2007 N.Y. Misc. LEXIS 3336 ("Keasbey"), the Court held unequivocally that the asbestos-related claims at issue, which were brought against an insulation contractor by claimants who were exposed to asbestos during the installation process, were nonproducts claims that were not subject to aggregate limits.

This decision already has been described as "very important" by policyholder lawyers because it is a well-reasoned publicly available opinion that was issued after a full trial not only on the non-products issue, but also on the full spectrum of coverage...