Multiple Trigger or Manifestation

 

May 22, 2017

 

In a decision a couple of weeks ago the Commonwealth Court of Pennsylvania determined that the multiple trigger rule, and not the manifestation rule, is the appropriate standard to use when you are determining whether or not an insurance policy is triggered in an environmental property damage claim that involves an extended latency period between exposure and manifestation. The case is Pennsylvania Manufacturers' Association Insurance Company v. Johnson Matthey, Inc., et al. 2017 Pa. Commw. LEXIS 115 (Commw. Ct. Apr. 21, 2017).

 

In the case at hand, the insurer had been defending its insured under a reservation of rights in an environmental claim. There were allegations of pollution dating to the 1960s and 1970s, with the contamination manifesting in the 1980s. The insurer issued a CGL policy insuring the insureds predecessor companies dating from April 1969 to April 1979. During the insured time, a hazardous substance was disposed into the environment. Soon after, Insurer withdrew their defense and filed a declaratory judgment action to establish that under the manifestation rule its policies were not triggered. The Commonwealth denied the motion for summary relief and held that the multiple trigger rule, which says that triggered policies are those in effect from the moment of first exposure to the condition that caused the injury. Insurer later moved for summary judgment, basing the motion on the contentions that as a matter of legal liability insurance coverage for environmental property damage claims is triggered only at the time the damage is first manifested.

 

The Commonwealth Court denied the motion for summary judgment and held that the multiple trigger rule applies to claims like the one in the case at hand, where there are long periods between exposure and manifestation.

 

Editor's Note: This decision will probably be reviewed by the Pennsylvania Supreme Court, who has decided in the past that the manifestation rule applied in a case where leaking toxic water caused injury and death to the cattle population of a farm, a finding opposite that of the findings here by the Commonwealth. Allowing the Pennsylvania Supreme Court to address this issue should shed some light on the two different trigger rules.