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Casey & Chapman, PLLC, Prevails Before West Virginia’s Highest Court

Casey & Chapman, PLLC, prevailed on behalf of a local manufacturing company before the Supreme Court of Appeals of West Virginia on a certified question issued by the United States Court of Appeals for the Fourth Circuit in an appeal originating from a complex insurance declaratory judgment matter in the United States District Court for the Northern District of West Virginia.

The certified question before the Supreme Court of Appeals of West Virginia addressed a matter of first impression in West Virginia regarding when coverage is triggered under an ambiguous commercial general liability (“CGL”) policy in latent injury matters stemming from chemical exposure.  In granting summary judgment in favor of the manufacturing company, Judge John Preston Bailey had predicted that the Court would adopt the continuous or multiple trigger of coverage, rejected the restrictive manifestation trigger championed by the insurer, and found the insurer owed coverage to the manufacturing company.

The insurer appealed the District Court’s decision to the United States Court of Appeals for the Fourth Circuit, which certified the instant question to West Virginia’s highest court: “At what point in time does bodily injury occur to trigger insurance coverage for claims stemming from chemical exposure or other analogous harm that contributed to development of a latent illness.”  In answering the certified question, the Court joined a majority of jurisdictions in adopting the continuous or multiple trigger of coverage: “We agree with the interpretation favorable to [the manufacturing company] that the ambiguous policy language incorporates a continuous trigger”.

Specifically, the Court found that: (1) under the CGL policy language, the definition of what constitutes an “occurrence” was ambiguous and subject to interpretation; (2) the insurance industry history relating to the standard CGL policy “shows that the ‘occurrence’ language incorporated into the CGL policy was designed with the goal of affording coverage for singular, repeated, or continuous exposures to hazardous substance if those exposures cause either a singular or a progressive bodily injury, sickness, or disease”; (3) a majority of jurisdictions have adopted the continuous or multiple trigger of coverage; and (4) adoption of the continuous or multiple trigger of coverage “has the effect of spreading the risk of loss widely to all of the occurrence-based insurance policies in effect during the entire process of injury or damage”, which includes the time of “the initial exposure, through the latency and development period, and up to the manifestation of the bodily injury, sickness, or disease”.  In rejecting the restrictive manifestation trigger of coverage, the Court noted that “engrafting a manifestation trigger to limit coverage for progressive injuries would, in effect, turn [the] occurrence-based CGL policy into a claims-made policy”.

The Court’s ruling sends a strong message to the insurance industry that businesses small and large should receive the benefit of their bargain when they purchase insurance.  The Court’s full opinion can be found here.

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