Jan 31, 2009 - Liberty Mutual Ordered to Pay Asbestos Claims
Wisconsin Supreme Court ruled Thursday that Liberty Mutual must cover all the costs of injuries by claimants in suits against Plastics Engineering Co.
Plastics Engineering is a family-owned plastics company located in Sheboygan, Wisconsin that sells molding compounds and industrial resins under the name Plenco. Plenco produced molding products that contained asbestos from about 1950 to 1983. As a result, it has been involved in litigation over the last twenty years resulting from injuries caused by exposure to asbestos, such as mesothelioma, asbestosis and lung cancer.
Plenco was insured by Liberty Mutual from 1968 through 1989, both with general liability and umbrella coverage. In 2004, Liberty Mutual tried to limit its responsibility and sought to reduce Plenco’s coverage from $73 million to $10 million. Liberty Mutual was arguing that injuries caused by Plenco’s asbestos containing products should be considered a single occurrence, thereby limiting their liability.
Plenco challenged the insurer’s new policy in federal court. The U.S. Court of Appeals then referred the case to the Wisconsin Supreme Court, which rejected the appeal on Thursday. The court ruled each injured person has a separate case and that an insurance company must fully defend and indemnify asbestos claims filed against their policyholders. As such, an insurer is required to pay all amounts that result from an injury that triggers the policy. In cases that involve an ongoing exposure to a hazardous substance, such as asbestos, policies are triggered from time of exposure to time of manifestation. This is particularly important in cases involving exposure to asbestos, since there is a 10 to 40 year latency period between time of exposure and development of symptoms.
The courts decision was hailed as a victory by asbestos lawyers, claimants, small business owners and environmentalists alike. The ruling is expected to have substantial impact on insurance and environmental suits in the state of Wisconsin.
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