Primary insurer must defend Alfa Laval in some asbestos-related suits: Ruling

NEW YORK—A New York federal judge ruled in a favor of a Sweden-based manufacturer that its primary insurer must provide defense for certain asbestos-related liabilities.

Alfa Laval Inc. is entitled to full defense costs from primary insurer Travelers Casualty & Surety Co., a unit of Travelers Cos. Inc., for asbestos claims that fall within several liability and excess umbrella indemnity policies it purchased from Travelers' predecessor, Aetna Casualty & Surety Co., according to court documents.

Since 2002, approximately 1,300 asbestos suits have been brought against Alfa in the United States, 650 of which are currently active, according to court documents. The partial summary judgment in favor of Alfa stems from two underlying asbestos-related cases, according to the ruling, which was granted last week by Judge Debra A. James of the New York Supreme Court for New York County in New York.

Travelers argued that it had no duty to defend and indemnify Alfa in connection with certain asbestos-related product liability claims because the claims were made after the policies lapsed, and that any liability was limited to a percentage based upon Travelers' “time on the risk” as Alfa purchased coverages from other insurers, according to the ruling.

“It would be highly impractical to allocate the insurers' liability for defending Alfa in the plethora of pending suits against” the company, the judge wrote.

While Alfa pursued payment from other insurers, under the ruling Travelers is still obligated to defend the Lund, Sweden-based manufacturer in pending actions in Hawkins vs. Alfa Laval Inc. in North Carolina.

In Stewart vs. Alfa Laval Inc. in Virginia, where the case against Alfa is based on its being the successor of Sharples Inc., the judge wrote that "where…Alfa is charged with direct liability as well as vicarious, Travelers must provide it with a complete defense, subject to Traverlers' potential recoupment from contribution, if appropriate, after the conclusion of the underlying case."

“Alfa's conduct does not relieve Travelers of its obligation to defend Alfa in the Hawkins case,” the judge wrote. “Double recovery will be avoided by reducing Travelers' liability for Alfa's defense by the amounts obtained by Alfa from other insurers.”