CHAPTER 9 TRIGGER OF COVERAGE

• Jurisdiction: United States

A. Policy Format and Structure

The term "trigger" refers to the event, accident, occurrence, or claim that causes the policy to provide defense and indemnity for the insured. The question of the trigger of coverage has been the subject of extensive litigation. Depending on fact situations, some courts have applied different triggers to the same policy wording.

The Commercial General Liability Policy (CGL) may be written line by line (monoline) or as part of a commercial package program. The substantive coverage provisions are identical in both the old and new forms of CGL. The only difference between them is the "trigger."

Triggers that have been adopted by various courts include:

• the manifestation trigger:

o coverage applies when an injury first manifests, or is capable of being observed;

• the actual injury trigger:

o coverage applies when the injury actually happens to the claimant;

• the first injury trigger:

o in multiple injury cases, like asbestosis where the claimant ingests the damage causing fibers over a period of years, the first ingestion of a thread of asbestos fiber is the triggering event;

• the discovery of injury trigger:

o coverage applies when the injured party learns of his or her injury, regardless of when the injury occurred;

• the triple trigger:

o a multiple of all of the other triggers designed to provide the broadest coverage available to the claimant; and

• the continuous trigger:

o a continuous occurrence of, for example, environmental pollution triggers claims under multiple primary insurance policies.

The insured is entitled to secure coverage from a single policy of their choice that covers "all sums" incurred as damages "during the policy period," subject to that policy's limit of coverage. In such an instance, the insurers bear the burden of obtaining contribution from other applicable primary insurance policies as they deem necessary.

B. Asbestos

There was a flood of asbestos-related litigation in the United States starting in the 1970s and culminating in the 1990s. Because corporations were filing bankruptcy as a result of the thousands of suits that claimed asbestos had caused damage over a period of time as long as 30 years, insurance coverage issues became vicious. Courts worked to provide the most coverage available to the insured so that money would be available to pay the "victims" who ingested asbestos fibers and contracted asbestosis or those who ingested silica dust and contracted silicosis, which eventually developed into cancer, mesothelioma, or lung cancer.

The result of the concern for the victims of asbestos caused legal abuse of the insurers and the corporations they insured. The law of unintended consequences raised its ugly head. Consider news reports concerning asbestosis and silicosis, where it has been disclosed that many claims were the result of fraud. For example, District Judge Janis Jack of the U.S. District Court for the Southern District of Texas conducted depositions of doctors and others who helped create multiple cases of silicosis. In In re Silica Products Liability Litigation, 398 F. Supp. 2d 563 (S.D. Tex. 2005), Judge Jack dealt with a fraudulent claim relating to asbestosis and silicosis that, although not a California decision, involved the same type of fraud as is found in California.

Judge Jack concluded:

(1) silicosis diagnoses were unreliable;

(2) the joinder of the plaintiffs constituted an egregious misjoinder;

(3) the joinder of the workers' silicosis claims against multiple defendants did not constitute an egregious misjoinder;

(4) removing the defendants, who failed to allege the principal places of business of each corporate defendant, failed to show that complete diversity existed in any of the multidistrict litigation cases; and

(5) the law firm's filing and then persisting in the prosecution of silicosis claims, while recklessly disregarding the fact that there was no reliable basis for believing that every plaintiff had silicosis, constituted an unreasonable multiplication of the proceedings; therefore, the law firm was liable for expenses and costs for the Daubert hearings, in a case over which the court had subject matter jurisdiction.

National Public Radio reported in 2006 on one of the depositions of a doctor, who testified about the injuries he diagnosed in one of the plaintiffs:

Ray Harron from West Virginia, a doctor who reads X-rays taken by others and then gives opinions used in court, is responsible for at least 88,000 legal claims. In Judge Jack's court Dr. Harron's reputation was weakened when defense lawyers started producing evidence of double diagnoses.

In one courtroom exchange, a defense lawyer asked Harron how it was possible that his asbestos diagnosis of a man named Kimball seemed to disappear eight years later, when Harron diagnosed Kimball with silicosis. In the deposition the following occurred:

[Defense] LAWYER: "And as a matter of fact, you said that somebody with those fibers and scars in their lungs are gonna go to their grave with them, right?"

[Dr.] HARRON: "Right."

LAWYER: "Not Mr. Kimball."

The defense then displayed a later set of X-rays. In these films, Kimball now has silicosis, but his asbestosis has cleared up. Judge Jack pressed Harron to explain. She asked, "So now his asbestosis is gone?"

HARRON: "Well, I can't say that it's gone, your honor."

JUDGE JACK: "Well, where'd it go?"

HARRON: "Like I say, I don't know." ¹

Dr. Harron was later warned to obtain counsel to defend him against criminal charges of being involved in a fraud. He has since refused to testify and asserted his Fifth Amendment privilege against self-incrimination. NPR, in its report, summed up:

Judge Jack's methods of deposition and her ruling are beginning to have an impact around the country. In Florida, a judge has ordered silicosis plaintiff lawyers to produce detailed medical information on their claims. In Ohio, a state court handling 35,000 asbestos claims and 900 silica claims is considering calling hearings to depose the doctors the same way Jack did. And on Capitol Hill, the House Subcommittee on Commerce and Energy begins its investigation into the Mississippi lawsuits. Like a little legal pebble, the

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