Continuous Trigger Theory Applies to Long-Tail Claims 

The West Virginia Supreme Court, in response to a certified question from the Fourth Circuit, concluded that for “long-tail claims” the continuous trigger theory applies to determine when bodily injury occurs under an occurrence-based CGL policy. The continuous trigger is appropriate because the policy language is ambiguous as to when coverage is triggered when latent and/or progressive injury is alleged.   

The underlying actions consist of three lawsuits against Sistersville Tank Works, Inc. (“STW”) alleging that STW carelessly manufactured, installed, inspected, repaired, or maintained tanks at a chemical plant. The underlying plaintiffs further alleged that between 1960 and 2006 they were repeatedly exposed to cancer-causing chemical liquids, vapors, or fumes that escaped from the tanks, which led to their cancer diagnoses.  

Westfield Insurance Company (“Westfield”) was STW’s primary CGL insurer from 1985 through April 15, 2010. At issue in the coverage dispute is the meaning of the insuring agreement as to the trigger of coverage. The insuring agreement provides that: “This insurance applies only to ‘bodily injury’ and ‘property damage’ which occurs during the policy period.  The ‘bodily injury’ or ‘property damage’ must be caused by an ‘occurrence’. The ‘occurrence’ must take place in the ‘coverage territory.’”   

STW tendered the underlying actions to Westfield for defense and indemnity. Westfield denied coverage and filed suit against STW seeking declaratory relief. Westfield argued that it had no duty to defend or indemnify STW because the underlying plaintiffs were diagnosed four years or more after the expiration of the last CGL policy, and therefore, STW could not establish that an “occurrence” had happened within the policy period sufficient to trigger coverage. The district court granted summary judgment in favor of STW concluding that Westfield owed it a duty to defend and indemnify under all of the policies it issued from 1985 through 2010. The district court determined the “during the policy period” language of the Westfield policies was ambiguous in light of the latent disease claims, and therefore, the continuous trigger theory applied.  

On appeal, Westfield argued that the manifestation trigger of coverage should be applied, meaning that only the CGL policy in effect when an injury is diagnosed, discovered, or manifested covers the claim.  Because this was an issue of first impression, the Fourth Circuit certified the following question to the West Virginia Supreme Court: “At what point in time does bodily injury occur to trigger insurance coverage for claims stemming from chemical exposure or other analogous harm that contributed to development of a latent illness?” 

The West Virginia Supreme Court concluded the policy language is ambiguous, and therefore, must be construed in favor of the insured to incorporate a continuous trigger. “Under the continuous-trigger theory, when a claim is made alleging a progressive injury caused by chemical exposure or other analogous harm, every occurrence-based policy in effect from the initial exposure, through the latency and development period, and up to the manifestation of the bodily injury, sickness, or disease, is triggered and must cover the claim.” The West Virginia Supreme Court made this determination for a number of reasons: (1) the history behind the 1966 CGL policy and the adoption of “occurrence” language; (2) the drafters of the 1966 CGL Policy rejected the manifestation trigger theory; (3) the majority of the courts use the continuous trigger; and (4) the policy language supports a continuous trigger. Westfield Ins. Co. v. Sistersville Tank Works, Inc., No. 22-848, 2023 WL 7391646 (W. Va. Nov. 8, 2023).