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Vol. 12 - Issue 8

November 14, 2023


Memory Lane: State High Court Chooses A Trigger Of Coverage Approach For Latent Bodily Injury


I first read this opinion on a Thursday – and what a throwback it was!
In Westfield Ins. Co. v. Sistersville Tank Works, Inc., No. 22-848 (W.Va. Nov. 8, 2023), the Supreme Court of Appeals of West Virginia, answering a certified question from the Fourth Circuit, addressed which trigger of coverage approach applied to latent bodily injury claims. 
In doing so, the court provided a tutorial on the drafting history of the commercial general liability policy's treatment of trigger of coverage -- as well as discussed the voluminous body of case law on the subject. 
For those who have been doing coverage work for a long time, Sistersville Tank is a read down memory lane.  You will be transported back to that time when courts first addressed trigger of coverage for latent injuries.  It was always a big moment when a new decision came down – even from the most obscure trial court -- and they were shared, via fax, amongst insurers and coverage lawyers.  And then they were reported in Mealeys!  What an interesting and unique experience to watch a body of law develop before your eyes and be a part of it.  As I was reading Sistersville Tank, I thought I was back at Christie, Pabarue, Mortensen & Young a million years ago.
At issue before the West Virginia high court was coverage for Sistersville Tank Works for claims brought by individuals diagnosed with cancer between 2014 and 2016 -- allegedly caused by exposure to Sistersville's tanks located at a chemical plant where they worked between 1960 and 2006.
Westfield disclaimed coverage under its policies issued to Sistersville from 1985 to 2010.  In the insurer's view – and in the absence of controlling law -- a manifestation trigger applied: only the liability policy on the risk, when the disease is diagnosed, satisfies the requirement of "bodily injury" during the policy period.  In other words, only the policy on the risk when the disease becomes manifest is obligated to provide coverage.  Thus, as Westfield saw it, none of its policies would owe coverage, as the cancers were diagnosed between 2014 and 2016 – after the last Westfield policy was off the risk. 
Following its long history lesson, and a discussion of the same arguments and considerations that courts before it confronted, the Mountain State top court, "[a]fter careful review of the language used in the occurrence-based CGL policy," concluded that a continuous-trigger theory applied:
"As we discuss below, under the continuous-trigger theory, coverage is triggered when an individual is initially exposed to what the policy calls a 'harmful condition' such as a chemical or analogous toxic, injurious substance. Coverage is also triggered when the individual suffers from 'exposure in residence,' that is, the development period after exposure when the injury is latent and hidden. Finally, coverage is triggered when the sickness, disease, or other bodily injury manifests. Under the continuous-trigger theory, damages that are caused, continuous, or progressively deteriorating throughout successive policy periods are covered by all the occurrence-based policies in effect during those periods."




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