Last week, the Montana Supreme Court affirmed a lower court's decision that an insurer must pay asbestos claims and associated costs to the state under a comprehensive general liability policy that the insurer issued for the years 1973-1975. The case is National Indemnity Co. v. State of Montana 2021 MT 300.
This decision essentially affirms a ruling from March, 2018, against the insurer, a Berkshire Hathaway unit. The court held that the state knew about hazardous conditions, injuries, and deaths related to a vermiculite mine in Libby, Montana, since 1942.
The mine was owned and operated by W.R. Grace and Co. and its predecessors. The insurance-related dispute concerned underlying litigation against the state based on its regulatory role.
In August 2019, the lower court held that National Indemnity was obligated to pay the state $97.8 million. According to court documents, this obligation consisted of $26.8 million for the remainder of a decade-old global settlement, $29.6 million to indemnify the state for settlements paid to claimants exposed to toxins during the policy period, $4.9 million in accompanying prejudgment interest, and $17.4 million in attorney's fees and defense costs for the litigation spanning from 2005 to 2019.
The court remanded two issues back to the lower court to decide on, first, the number of occurrences under the policy and the calculation of policy limits, and second, the eligibility of claimants exposed to asbestos only prior to the policy period.
The ruling was 69 pages and was a 6-1 majority, with the dissenting opinion finding that National had not breached its duty to defend Montana.
Editor's Note: The insurance industry regularly has to grapple with the issue of asbestos, especially since injury resulting from asbestos exposure takes years to manifest. Insurance companies may change hands from the time between the exposure and the injury, and courts are charged with determining which insurance company must respond to asbestos claims.