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Asbestos claims ruling increases insurer exposure

Posted On: May. 9, 2007 12:00 AM CST

NEW YORK--In a decision that greatly expands the amount of liability insurance that thousands of asbestosis claimants might be able to recover from a defunct insulation installer's general liability insurers, a New York trial court on Tuesday ruled that coverage is available under the policies' premises/operations provisions.

The primary and excess insurers in the case argued that the aggregate limits of the products hazard and completed operations provisions of the coverage they wrote for insolvent contractor Robert A. Keasbey Co. for 17 years limited their liability to around $100 million. Claimants recovered those damages from the insurers between 1992 and 2001, according to court papers.

But asbestosis plaintiffs attorneys in 2001 asserted that many claimants were not injured as a result of either Keasbey's products or its completed operations. The attorneys said many plaintiffs were harmed at the time Keasbey was installing asbestos insulation, and that those claims should be covered by the premises/operations provisions of Keasbey's primary and excess policies.

The trial court, the New York Supreme Court, ruled that "the evidence has shown that the injuries happened while the installation operations of defendant Keasbey were ongoing, which were covered under the operations coverage provisions" in the primary and excess policies.

Because those provisions did not contain any aggregate limits, Keasbey's insurers are exposed to as much as $250 million of additional claims, the asbestosis claimants' attorneys assert in court papers.

The insurer attorney in the case, Continental Casualty Co. et al. vs. Employers Insurance Co. of Wausau et al., would not comment on whether the decision would be appealed.