Connecticut Appeals Court Broadly Interprets “Occupational Disease” Exclusion

March 23, 2017 | Insurance Coverage

A Connecticut appeals court, in a coverage dispute stemming from thousands of underlying lawsuits alleging injuries from exposure to industrial talc that purportedly contained asbestos, has ruled that the occupational disease exclusion is not limited only to claims by the policyholder’s own employees.

The Occupational Disease Exclusions

Variations of the occupational disease exclusion were before the court. One occupational disease exclusion stated that “this policy shall not apply . . . to personal injury (fatal or non-fatal) by occupational disease.” Another stated that, “[t]his policy does not apply to any liability arising out of: Occupational Disease.”

Addressing a question of first impression, not only in Connecticut but also nationally, the trial court concluded that those clauses barred coverage only for occupational disease claims brought by the policyholder’s own employees and that the exclusions did not apply to complainants who allegedly developed occupational disease while using the policyholder’s products in the course of working for another employer.

The Appellate Court Decision

The appellate court decided that the trial court had construed the occupational disease exclusions too narrowly. The appellate court held that the exclusions “unambiguously” applied so as to bar coverage for any underlying actions whose allegations met the standard definition of occupational disease.

In its decision, the appellate court pointed out that the “plain language of the occupational disease exclusions” was stated in “broad, general terms” and nowhere indicated that coverage was barred only for claims brought by a policyholder’s own employees.

The appellate court found no indication that the term “occupational disease” was a term of art peculiar to the Connecticut workers’ compensation law or that it was intended to be construed as a term of art of workers’ compensation law.

The appellate court acknowledged that the term “occupational disease” frequently was used and had obtained a peculiar meaning in the context of workers’ compensation law, but it rejected the contention that workers’ compensation programs represented the sole or primary use of the term “occupational disease” at the time the policies had been drafted.

It then concluded that the trial court had construed the occupational disease clauses too narrowly, and that those exclusions unambiguously barred coverage for occupational disease claims brought not only by employees of the insured but also by individuals who allegedly had contracted an occupational disease in the course of their work for other employers.

The case is R.T. Vanderbilt Co., Inc. v. Hartford Accident and Indemnity Co., Nos. AC 36749, AC 37140, AC 37141, AC 37142, AC 37143, AC 37144, AC 37145, AC 37146, AC 37147, AC 37148, AC 37149, AC 37150, AC 37151 (Conn. Ct. App. March 7, 2017).

Rivkin Radler Comment

In its lengthy decision, the appellate court also addressed a number of other issues, including the trigger of coverage theory governing long-tail asbestos litigation in Connecticut, the unavailability of insurance, the date of first exposure, drop down, and the applicability of the pollution exclusions to claims arising from alleged asbestos exposure. We focused only on the occupational disease exclusion here, given the dearth of cases interpreting such exclusions.

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