Environmental Trigger v. Asbestos Trigger (PA): Long-tail environmental contamination implicates only one year of coverage.shoke2013
A Pennsylvania State Appellate Court affirmed a ruling that an excess insurer must defend a policyholder that had exhausted its per–occurrence primary limits. The case involved a manufacturer of a failed flexible connector product in use at a gas station, which caused gasoline to leak onto neighboring properties. Applying Pennsylvania law, the court held that the state does not apply the multiple-trigger theory it employs in asbestos cases to apportion liability to multiple years of coverage in environmental cases such as this, where there was one specific gas leak. As such, the court found that the accident triggered just one policy year – the year in which the leak occurred. The court reasoned that “because the instant case does not concern a toxic tort, but instead emanates from injuries alleged to have occurred as a result of one specific event, a gasoline leak, we conclude that [the insurer’s] argument is without merit.” Therefore, because the “occurrence” giving rise to the damage happened during a single policy year, and “even though some alleged injuries did not manifest until years later…only the policy of the year of the occurrence is implicated.” The appellate court additionally found that the primary insurer’s payment of $1,000,000 to settle claims exhausted its per-occurrence limits (the aggregate limits were $2,000,000). Thus, the appellate court ruled that the excess carrier had a duty to defend the policyholder. Titeflex Corp. v. Nat’l Union Fire Ins., No. 2047 EDA 2012 (Pa. Super. Ct.).