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Insurers prevail over former asbestos distributor

Insurers prevail over former asbestos distributor

Travelers Cos. Inc. and Crum & Forster Holdings Corp. Inc. units have prevailed in litigation over a now-defunct asbestos distributor, with an appeals court upholding a lower court’s ruling that their coverage limits are exhausted.

The 4th U.S. Circuit Court of Appeals in Richmond, Virginia, ruled in favor of Morristown, New Jersey-based Crum & Forster unit United States Fire Insurance Co. and St. Paul-based Travelers unit St. Paul Fire & Marine Insurance Co. in litigation filed by Walter E. Campbell Co. Inc., in General Insurance Co. of America; The Walter R. Campbell Co. Inc. v. United States Fire Insurance Co., St. Paul Fire & Marine Insurance Co., et al.

Walter E. Campbell handled, sold, installed and removed insulation materials containing asbestos for decades, stopping by 1972. It began to be sued in the mid-1980s for asbestos-related bodily injury, according to the ruling.

St. Paul and U.S. Fire, the only remaining insurers in the litigation, and other insurers defended and indemnified the company against hundreds of asbestos-related bodily injury claims, paying claimants more than $60 million on its behalf over several decades, although many claims remain pending, according to the ruling.

Under terms of policies issued to the company, claims involving bodily injuries that fall under the completed operations and products hazards are subject to an aggregate limit.

Operations claims, which are bodily injury claims that do not constitute completed operations or product hazards, are subject only to a per occurrence limit, with no aggregate limit.

Among the issues in the litigation is how to classify, past, pending and future bodily injury claims against the company, with the company contending insurers “have mischaracterized settled operations claims as settled completed-operations claims, resulting in a premature exhaustion of the policies’ aggregate limits for completed-operations claims,” according to the ruling. 

The U.S. District Court in Baltimore ruled in the insurers’ favor, and was upheld by a unanimous three-judge appeals court panel. “The main questions at issue in this appeal – concerning both the scope and limit of the insurers’ duties to defend and indemnify (Campbell) – were answered over a decade ago by this Court” in a 2004 ruling, said the decision.

The ruling said, “we see no reason to depart from (the 2004 ruling’s) clear and controlling interpretation of the completed-operations hazard.”

A Montana state court ruled this month that a Berkshire Hathaway Inc. unit is obligated to provide coverage to the state of Montana for asbestos claims under a comprehensive general liability policy it issued for a mine for 1973 through 1975.





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