Aggregate limits are not applicable to all business claims, according to a ruling handed down yesterday by the New York Supreme Court.
The Manhattan court upheld the claims of 20,000 individuals seeking coverage from Chicago-based CNA for asbestos-related personal injuries.
The decision broke new ground by establishing that aggregate limits in insurance policies do not apply to all claims arising during the course of business operations, according to the plaintiff's attorney.
August J. Matteis Jr., a partner with Kelley Drye & Warren's Insurance Recovery Group., told NU Online News Service that the decision has implications beyond asbestos.
"This decision could be significant for any company that faces liability for injuries arising out of its ongoing business activities because claims arising out of a company's 'operations' are not subject to aggregate limits under commercial general liability policies," he said.
Mr. Matteis, who served as lead trial attorney for the claimants while at the law firm Gilbert Heintz & Randolph LLP, said in a statement, "Many companies may believe that their coverage is limited only to the amount listed as the 'products aggregate' in their policies."
The New York decision makes it clear that for certain operations-related claims, such as exposure to asbestos during the installation process, no aggregate limits apply.
"This type of coverage, which exists in most liability policies, is potentially unlimited," he said.
At issue was whether CNA owed insurance coverage obligations under 17 primary comprehensive general liability policies to a class of individuals with asbestos-related bodily injury claims pending against the insurer's policyholder, the Robert A. Keasbey Company. Now defunct, Keasbey installed asbestos-containing materials in powerhouses and other facilities in and around New York.
The policies in dispute contained aggregate limits for claims that came within the "products hazard," but no aggregate limits for claims that did not.
Mr. Matteis argued on behalf of his clients that their claims were not barred by the aggregate limits in the policies because claims that arise out of exposure to asbestos during the installation process are considered "operations" claims–therefore not subject to aggregate limits.
John Heintz, the head of Kelley Drye's Insurance Recovery Group, noted that this is a tremendous victory for policyholders who have been battling insurers for decades over asbestos coverage.
"This decision is the first published opinion that rejects insurers' efforts to avoid their obligations for claims stemming from installation operations," Mr. Heintz said.
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