Wednesday, April 26, 2017

Pa. court rules on 'continuous trigger' for enviro insurance

In an update to clients, K&L Gates attorneys John M. Sylvester and John M. Hagan write:

John M. Sylvester
In a significant decision for Pennsylvania insurance law, the Pennsylvania Commonwealth Court has ruled that a “continuous trigger” of coverage applies to long-term, latent environmental property damage claims. 

John M. Hagan
Specifically, in Pennsylvania Manufacturers’ Association Insurance Co. v. Johnson Matthey Inc., a unanimous panel of the court rejected an attempt by the insurer, Pennsylvania Manufacturers’ Association Insurance Company (“PMA”), to apply a “first manifestation” trigger of coverage for the environmental coverage claim of the policyholder, Johnson Matthey Inc. (“Johnson Matthey”), under “occurrence-based” policies that PMA issued to Johnson Matthey in the 1960’s and 1970’s.

Rather, the Court observed that the record of the case presented a long latency of continuing, undetected property damage taking place during the PMA policy periods, which supported a continuous trigger throughout that latency period, such as that adopted by the Pennsylvania Supreme Court for asbestos bodily injury claims in its seminal decision, J.H. France Refractories Co. v. Allstate Insurance Co.

The Commonwealth Court rejected PMA’s argument that a recent Pennsylvania Supreme Court decision, Pennsylvania National Mutual Casualty Insurance Co. v. St. John, which had applied a “first manifestation” trigger to a non-environmental property damage coverage claim, should be followed in this case.

To read the full alert, click here.

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