Many companies acquire other businesses to grow or expand theirproduct lines. In some cases, those acquisitions also come withenvironmental hazards and potential lawsuits. Does an insurancecompany have a duty to defend a former insured in cases claimingthat individuals were injured by exposure to toxic substances eventhough the exposure may have occurred before the insured owned thecompany? According to a recent case decided by the Appellate Courtof Illinois, the answer is yes. [Ill. Tool Works Inc. v.Travelers Cas. & Sur. Co., 2015 IL App (1st) 132350 (Ill.App. Ct. 1st Dist. 2015)]

Illinois Tool, which manufactures and distributes tools,equipment and finishing systems, was insured by Travelers Casualty& Surety Company and Century Indemnity Company from 1971through 1987. In 1993, as part of its expansion plans, IllinoisTool purchased a company that made welding products.

Several individuals filed multiple toxic tort cases claimingthat they were injured as a result of exposure to asbestos,benzene, manganese and other harmful materials. Illinois Tool wasnamed individually, as a successor-in-interest to the weldingcompany it acquired, or as both, depending on the suit. The companyturned to its former insurance carriers to defend the suits, butthe insurers declined, claiming that the policies had expired.