The Wisconsin Supreme Court has ruled on a case involving employer insurance coverage for employees who develop asbestos related diseases on the job. The victory will help mesothelioma victims and others with asbestos cancer that were exposed to asbestos while working for a small or medium sized company that has not chosen to take shelter by filing bankruptcy.
The lawsuit was brought by Plastics Engineering Co. of Sheboygan, Wisconsin (known as Plenco) against its insurance company, Liberty Mutual. Plenco produced plastic molding compounds from 1950 to 1983 that contained asbestos. The compound was sold to companies that make molds for plastic products; hundreds of employees from companies that bought the compound have sued Plenco for damages because of the asbestos related diseases that they have developed.
Liberty Mutual has insured Plenco since the 1960s and paid out $14.3 million in asbestos claims through 2005. At that point they halted payments on new claims, declaring that their policy with Plenco had reached its limit. Plenco argued that Liberty Mutual’s interpretation of their coverage would reduce the policy coverage from $73 million to about $10 million and challenged the insurer’s decision in court.
Liberty Mutual’s argument was that all asbestos claims should be interpreted as the result of a single occurrence: the manufacture of asbestos tainted products. Under that interpretation, all asbestos claims would be treated as a single insurance payment subject to policy limits. Liberty Mutual also argued that they should not be responsible for asbestos health damage to employees that worked for Plenco before they were the company’s insurer.
The Wisconsin Supreme court rejected both arguments, ruling that every claim of asbestos injury should be treated as a separate event. Liberty Mutual is responsible for compensating every individual who is awarded damages up to the policy’s limit.
Legal observers in Wisconsin declared that the decision will be a benefit to other insured companies who have struggled with asbestos bankruptcy claims and reluctant insurance companies. The decision effectively increases coverage for many companies by eliminating a principal argument for limiting coverage on asbestos health damage. The issue has been raised in many states and now, has been decided for Wisconsin businesses and Wisconsin insurers.
Source: Chicago Tribune
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