States continue to adopt the continuing trigger theory under commercial general liability insurance policies

A growing number of states, including Ohio, Pennsylvania and Virginia, and most recently West Virginia, now follow the continuing trigger theory when examining coverage under a commercial general liability (CGL) insurance policy.

The West Virginia Supreme Court of Appeals recently affirmed in Westfield Ins. Co. v. Sistersville Tank Works, 22-848 (Nov. 8, 2023), that West Virginia law recognizes a continuing trigger theory to determine when insurance coverage is triggered under a CGL policy that is ambiguous as to when coverage is triggered.

In 2016 and 2017, former employees of Sistersville Tank Works, Inc. (STV), filed three separate civil lawsuits in West Virginia state court alleging personal injuries resulting from exposure to various cancer-causing chemicals while working around tanks that STV allegedly installed, manufactured, inspected, repaired or maintained between 1960 and 2006. STV purchased CGL policies from Westfield each year from 1985 to 2010. Typical of nearly all CGL policies, the Westfield CGL policies issued to STV were occurrence-based and provided coverage for bodily injury and property damage that occurred during the policy period. Under the Westfield CGL guidelines, bodily injury or property damage must be caused by an event defined in the policy as an accident, including continuous or repeated exposure to substantially the same general adverse conditions.

Westfield denied coverage on the three underlying claims and appealed the declaratory judgment in the United States District Court for the Northern District of West Virginia seeking a declaration that it had no duty to defend or indemnify STV because the former employees were diagnosed after the expiration of their last CGL policy, and therefore STV could not establish that the event occurred during the policy period.

The district court granted summary judgment to STV and found that Westfield had a duty to defend and indemnify under all Westfield CGL policies that were in effect between 1985 and 2010. Specifically, the district court held that Westfields had a duty to cover bodily injury that occurs during The policy period was ambiguous because the language in the Westfields CGL policies did not clearly identify when coverage was triggered when the claimant alleged repeated exposure to chemicals and the gradual development of disease over numerous policy periods. The district court anticipated that the West Virginia Supreme Court of Appeals would apply the continuous trigger theory to clarify the ambiguous language in the policies at issue, resulting in each event-based CGL policy insuring the initial exposure risk until the triggering event date.

Westfield appealed to the United States Court of Appeals for the Fourth Circuit and argued that the manifest coverage trigger should be applied to determine coverage, whereby only the CGL policy in effect when the injury is diagnosed, discovered, or manifested provides coverage for the claim. The Fourth Circuit, acknowledging that West Virginia had not addressed the issue, then certified the following question to the West Virginia Supreme Court of Appeals:

At what point does a bodily injury occur to trigger insurance for damages resulting from chemical exposure or other similar damages that contributed to the development of a latent disease?

The West Virginia Supreme Court began its analysis of the certified issue by noting that in the context of latent or progressive diseases, the definition of occurrence was ambiguous and subject to judicial interpretation. The court then examined the history of the insurance industry’s adoption of event language in CGL policies in the 1960s, including the specific intent of the authors of the event language to include cases involving progressive or repeated injuries where multiple policies could be used.

The court also noted that most courts that have examined the continuing trigger theory have expressly adopted it, including Ohio (Owens-Corning Fiberglas Corp. against Am. Centennial Ins. Co., 660 NE2d 770, 791 (Ohio Comm. Pl. 1995); Pennsylvania (JH France Refractories Co. v. Allstate Ins. Co., 626 A.2d 502, 506 (Pa. 1993); and Virginia (CE Thurston & Sons, Inc. against Chi. Ins. Co., no. 2:97 CV 1034 (ED Va. Oct. 2, 1998)). In contrast, the Court noted that no jurisdiction has adopted the manifestation trigger advocated by Westfield.

The court concluded by expressly adopting the continuous trigger theory of coverage to determine when coverage is triggered under an event-based CGL policy insurance contract if the policy is ambiguous as to when the coverage is triggered. In doing so, the Court noted that the continuous trigger theory of coverage has the effect of spreading the risk of loss broadly across all event-based insurance policies in effect throughout the injury or damage process.[,] which includes the time of initial exposure, through the period of latency and development, until the manifestation of physical injury, illness or disease[.]

The Westfield decision ensures that West Virginia law relating to triggering coverage under event-based CGL policies is consistent with law in other states across the country. It should also serve as a reminder to businesses purchasing event-based CGL policies to establish and maintain a policy inventory for as long as possible, especially for businesses that may be subject to injury claims involving long lag periods between exposure and manifestation. Having copies of those policies will increase the chances of finding at least one insurer (and potentially more) that owes defense and indemnification to such claims.

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