Now that the plaintiffs' firms have bankrupted many of the asbestos manufacturers with years of litigation and billions in settlements, they are turning their sights on a new-wave of defendants. Any company that used asbestos in their products or services, no matter how small the amount, is at risk of having to spend hundreds of thousands or even millions of dollars to defend themselves in court and pay asbestos claims. Even companies that never used asbestos, but are simply suspected of doing so, are finding themselves embroiled in multi-plaintiff asbestos lawsuits.
Old Insurance Policies Are Valuable
A critical and valuable asset in this fight that should not be overlooked is a company's old insurance policies, particularly its comprehensive general liability (or "CGL") policies. Even for suits filed today, CGL policies purchased in the 1940s, 1950s, 1960s and 1970s can provide millions of dollars in coverage for asbestos liabilities. Under the law of many states, coverage is available for bodily injury or property damage claims from first date of asbestos exposure through the decades-long period when the damage (disease or harm to property) was occurring until the date the disease became apparent or a claim was filed. So, if an asbestos suit alleges that individuals were first exposed to asbestos in the 1950s or 1960s, the defendant company may be entitled to coverage for defense and indemnity costs under many years of policies. And, policies sold in the 1950s and 1960s often contain no aggregate limits and no limits on defense costs.
If You Can't Find The Policies, Don't Panic
As a result of corporate relocations, the urge to purge old files, or the loss of institutional memory, many companies with long lineage are realizing that their old policies are lost or destroyed. But, with good detective work, insurance counsel can often help locate copies of old policies or enough "secondary" evidence of the policies to entitle the policyholder to coverage even if the policies themselves cannot be found. When looking for old policies, several sources of potential useful information, particularly to the trained eye, should not be overlooked. Beyond interviews of current and former employees, critical information can be gleaned internally from old correspondence with insurance brokers or insurance companies, accounting ledgers, and documents related to old lawsuits. Externally, insurance brokers, outside counsel, auditors, additional insureds and, for some companies, government archives can be important sources of information about old insurance policies. Insurance companies themselves can be valuable sources of information, as some keep records of policies sold going back many years.
The Next Step
Of course, locating a company's old insurance policies is only the first step to pursuing a claim against a carrier, particularly for asbestos liabilities. Once the appropriate insurance carriers have been identified, notice of a suit or claim against a policyholder should be provided to the carrier as soon as possible. Late or delayed notice is one of the carriers' favorite defenses to coverage for claims, but one that can be easily avoided altogether by alert policyholders.
The policyholder should also undertake to fully understand the potential coverage afforded by its historic insurance portfolio, including limits, terms and exclusions, and any remaining gaps. Many asbestos and other coverage disputes can be resolved without litigation, but usually not without some negotiation with the insurer or insurers. The issues typically disputed, depending upon how they are resolved, can be worth millions of dollars in gained (or lost) coverage. The better a policyholder understands its coverage portfolio - and the underlying claims - the more coverage dollars it is likely to obtain.
Conclusion
Do you know where your company's old insurance policies are? You should. Old insurance policies can be worth millions of dollars to companies facing liabilities stemming from events - asbestos-related and other - that occurred decades ago. Be pro-active. The best time to locate old or missing policies is not after your company has been sued, but now.
Insurance coverage counsel can assist a policyholder not only to find missing policies but to analyze the merits of a company's claims and negotiate or deal with the insurance company to maximize the policyholder's insurance recovery.
For more information, please contact:
| Matthew J. Schlesinger - | Washington, D.C. - (202-496-7500) |