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(Article from Insurance Law Alert, January 2019)

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A Pennsylvania district court ruled that each site at which the policyholder installed or removed asbestos-containing materials constituted a separate occurrence for policy coverage purposes and completed operations limits apply.  Ohio Valley Insulating Co., Inc. v. Maryland Casualty Co., 2018 WL 6812527 (W.D. Pa. Dec. 27, 2018). 

The court rejected the insurers’ assertion that all underlying asbestos suits arose out of a single occurrence—namely, the policyholder’s use of asbestos-containing materials.  Applying Pennsylvania’s cause-oriented approach (and noting that the same result would be reached under West Virginia law), the court reasoned that each site was a separate occurrence because claimants at each site were exposed to asbestos during the same time and were “subjected to continuous or repeated exposure to substantially the same general condition.”  The court distinguished cases involving asbestos claims that arise from “a single, negligent practice that could be considered one cause such as distributing a uniformly defective product from a single manufacturer or selling a product containing asbestos from one location.”

Addressing a separate issue, the court also held that the policies’ aggregate limits for “completed operations” applied.  The policyholder argued that the underlying suits fell solely within “operations” coverage.  Rejecting this assertion, the court adopted the reasoning set forth in In re Wallace & Gale Co., 385 F.3d 820 (4th Cir. 2004), which found that “the completed-operations hazard . . . encompasses any bodily injury claim in which the claimant was injured by asbestos exposure attributable to an operation that the insured completed prior to the start of the policy period.”