Asbestos Liability Issues Keep Emerging
Although insurance coverage issues have been settled for the most part over the years, there is still plenty "new under the asbestos sun," with liability issues continuing to emerge, one leading defense attorney says.
Joseph J. Schiavone is a partner in the law firm Budd Larner Gross Rosenbaum Greenberg & Sade in Short Hills, N.J. The firm represented asbestos manufacturer Johns Manville Corp.–which went bankrupt, leading to the creation of the Manville Trust–and is active in insurance defense work involving asbestos. Mr. Schiavone estimates that his firm is involved in about 1,100 asbestos cases in New York alone.
As Mr. Schiavone pointed out, many other asbestos manufacturers and distributors have gone or are about to go bankrupt. This led asbestos claimants to try to extract judgments or settlements from peripheral players, such as installers of asbestos products, he noted.
Up until 10 or 15 years ago, "everybody thought asbestos claims were products claims," said Marc I. Bressman, a partner in Budd Larners Cherry Hill, N.J. and Philadelphia offices.
He said that before insurers started excluding asbestos liability, they generally wrote their policies with an annual aggregate for products coverage but no aggregate for general liability coverage.
As the asbestos problem worsened and insureds began exhausting their aggregate coverage for products liability, they started considering ways to tap into additional coverage under their policies by trying to reclassify products claims into other liability areas, Mr. Bressman noted.
In an effort to open up an enormous amount of coverage under the unaggregated general liability portion of their policies, some insureds–particularly those that installed as well as sold asbestos products–have conducted statistical studies on how many of the claims by plaintiffs alleging exposure to the insureds asbestos products actually involved exposure during installation, he said.
Mr. Bressman, who was involved in one of the first arbitrations of the issue of product reclassification, questioned the validity of some of those studies. "The problem with asbestos claims, especially the mass volume of them, is that you could look at 500 claims files and [in the end] you would have no ideawhen those persons were exposed to asbestos, whose asbestos it was or whether they were even exposed to your asbestos," he observed.
Nevertheless, Mr. Bressman is unaware of any court decisions upholding the reclassification of a mass amount of claims as non-products claims. "Most of the decisions have been in arbitration," he noted.
Litigants also are trying to reclassify products claims as premises/operations claims, which involves coverage for building owners, said Mr. Schiavone. "The barrel is being scraped," he noted.
(For more on the long-term issues insurers face with asbestos claims, see the sidebar with this story, as well as NU's U.S. Reinsurance supplement in this edition, page S-20.)
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, July 20, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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