In Asbestos Coverage Case, Ohio Appeals Court Applies “Triggering Event” Theory to Determine Number of Occurrences

An appellate court in Ohio, applying the “triggering event” theory, has ruled that each individual claimant’s exposure to asbestos was an “occurrence” for purposes of insurance policies issued to a valve manufacturing company.

The Case

Some of the valves manufactured by the William Powell Company before 1987 contained asbestos. In 2001, Powell began receiving personal injury claims emanating from asbestos exposures involving its products. The claims related to exposures that had occurred from the 1940s through the 1980s and covered a wide geographical area. The circumstances varied. Some claimants allegedly had worked directly on the valves, while others asserted that they had prepared and packed or installed replacement gaskets. There also were claimants who had not worked with Powell’s products at all but alleged that they had been exposed to asbestos by washing a worker’s clothing.

Faced with potentially thousands of claims, Powell sought defense and indemnification under various insurance policies, including a number of occurrence-based primary liability and excess liability policies covering various periods from 1955 to 1977.

Powell subsequently filed a lawsuit, asking the court to resolve certain coverage disputes relating to the policies. It took the position that each individual’s exposure to asbestos constituted an occurrence. The insurer argued that Powell’s liability stemmed from a single occurrence: its decision to manufacture and sell asbestos-containing products without providing adequate warnings.

The trial court ruled, among other things, that an occurrence was each individual claimant’s “continued and repeated exposure to [Powell’s] asbestos-containing product[s].”

The insurer appealed.

The Appellate Court’s Decision

The appellate court upheld the trial court’s “occurrence” ruling.

In its decision, the appellate court rejected the insurer’s efforts to have it apply the causation theory and determine the number of occurrences by reference to the cause or causes of the damage or injury, rather than by the number of individual claims.

Instead, the appellate court, relying in large measure on a decision it had issued in 2007, decided that the “triggering event” theory applied. It reasoned that the underlying claimants’ exposures to Powell products had occurred “under a multitude of differing factual scenarios.” It added that it was “clear” that “exposure to asbestos” was the immediate event that had caused the claimants’ injuries.

Accordingly, the appellate court concluded, an “occurrence” constituted each individual claimant’s exposure to asbestos.

The case is William Powell Co. v. OneBeacon Ins. Co., No. C-160291 (Ohio Ct. App. Dec. 14, 2016).