In a precedent-setting case that could have wide-ranging impact, the Wisconsin Supreme Court today issued a decision expanding the liability of insurer Liberty Mutual in an asbestos injury case involving a plastic plant.
The ruling came in a dispute between Boston-based Liberty and its insured, the Plastics Engineering Co. of Sheboygan Wisc., over the amount of coverage the carrier was responsible for.
Jeffrey O. Davis, one of the attorney's representing Plastics Engineering, said the case represented a significant decision for insureds because the coverage disputes that were decided involved "issues that come up quite a bit in asbestos cases."
A spokesperson for Liberty said the company does not comment on matters in litigation.
Plastics Engineering, from 1950 to 1983, made plastic molding compounds containing asbestos used by other firms to make plastic products. Thousands of plaintiffs filed suit claiming they were injured as a result.
The insurer paid $14.3 million to cover claims through 2005, but argued there was a limit to its responsibility because all the injuries amounted to a single occurrence.
The court rejected that argument, saying each injured person has a separate case. The court said Liberty Mutual must cover all the costs of injuries and not just a portion.
Under the language in the policy "each claimant's repeated exposure is one occurrence…and once this policy is triggered, Liberty Mutual must fully defend the lawsuit in its entirety and pay for all the sums up to the policy limits," the court said.
The policy language, the court found, does not support a pro rata allocation of damages.
Originally, the case had been brought in federal court, but the 7th. U.S. Circuit Court of Appeals in Chicago ruled it involved issues of Wisconsin State law that needed be decided. The case now goes back to the 7th Circuit for a final resolution.
Mr. Davis said the Plastics Engineering case now involved a significant number of plaintiffs, but not thousands.
He said the ruling found that even if part of an injury took place outside of a particular year, the insurer must pay up to the policy limits.
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