16.6 Triggers of Coverage

• Library: Insurance Law in Virginia (Virginia CLE) (2020 Ed.)

16.6 TRIGGERS OF COVERAGE

16.601 In General. Typically, insurance coverage cases pertaining to CGL policies involve the discovery of bodily injury or property damage that occurs contemporaneously with the event or negligent act that caused the injury or damage, such as injury during a building fire. However, some environmental coverage and products liability cases may involve damage or injury

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that is not discovered or remains unknown until well after the causal event. Courts have wrestled with the question of when or under what circumstances an event or negligent act constitutes an "occurrence" that triggers the insurer's duty to indemnify as well as its duty to defend. Despite the courts' protracted efforts to identify these "triggers," they remain sharply divided on the issue. Although the Virginia Supreme Court has never addressed the issue, most courts have adopted one of four general "trigger theories" based on different constructions of a covered "occurrence" in CGL policies. ¹²⁹

16.602 Manifestation Theory. The first approach is the "manifestation" theory, where coverage is triggered when the injury becomes known, or manifests itself, during the policy period irrespective of when exposure occurred. ¹³⁰ The Fourth Circuit Court of Appeals adopted this test while applying Maryland law, although the approach was later rejected by the Maryland Supreme Court. ¹³¹

16.603 Exposure Theory. Some courts have adopted an "exposure" theory, under which exposure to a covered "occurrence" triggers coverage if the damage-causing event occurs during the policy period. ¹³² Under this theory, the policy or policies in effect when the injured party was exposed to the...