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AIG unit must defend Port Authority against WTC asbestos claims

AIG unit must defend Port Authority against WTC asbestos claims

An American International Group Inc. unit must defend the Port Authority of New York and New Jersey and several contractors against scores of asbestos claims brought by construction workers on the original World Trade Center, a New York judge ruled Wednesday.

The case, American Home Assurance Co. v. The Port Authority of New York and New Jersey et al., stems from a dispute over a liability policy issued to the Port Authority and other policyholders in connection with the original World Trade Center, known as the Hudson Tubes Project.

Since the 1980s, the Port Authority and others have been the subject of thousands of asbestos-related personal injury claims allegedly arising from the World Trade Center site during its construction, according to the ruling by New York Supreme Court Judge Eileen Bransten.

AIG unit American Home Assurance Co. defended and settled World Trade Center asbestos claims for more than 25 years, court records said. On Dec. 9, 1975, court records state, American Home sent the Port Authority notice of cancellation effective Feb. 7, 1976.

“American Home contends that thus, the policy period ended on that date,” court records state.

In 2012, after defending and settling these claims for decades, American Home filed suit, contending for the first time that pending WTC claims involved injuries that happened after the policy period.

American Home charged that certain claims against some of the policyholders are not covered because the policyholders cannot prove that the claimants’ alleged injuries occurred during the period covered under the policy.

The policyholders contend that the plain language of the American home policy does not require that a personal injury occur during the policy period for coverage to be triggered.

American Home also maintained that claims against some of the defendants’ spray-on asbestos fireproofing came from a single occurrence and the applicable $10 million limit of liability has been exhausted.

In her decision, Judge Bransten wrote that “it is clear, that contrary to American Home’s arguments, the plain language of the policy does not require injury during the policy period for coverage to be triggered.”

“Indeed,” she wrote, “under the plain language of the policy, coverage is triggered if the injury ‘arises out of’ construction of the project, regardless of when the injury itself began.”

American Home’s new theory that personal injury liabilities arising from the project are not fully covered “is flatly inconsistent with the express policy language,” Judge Bransten wrote. “New York courts have consistently concluded that asbestos claims constitute multiple occurrences because the claimants in such cases, like the claimants here, were invariably exposed to asbestos in different ways, for different periods of time, at different times and locations.”

AIG did not respond to a request for comment.

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