Continental Casualty Company v. Employers Insurance Company of
Wausau: New York Court Decides Significant Asbestos Coverage
Issues Against Insurer
May 15, 2007
OVERVIEW
Following a 34-day bench trial, on May 8, 2007, Judge Richard Braun of the Supreme Court, New
York County, issued a ruling that policyholders will claim expands the scope of insurance coverage
available for long-tail asbestos-related personal injury claims arising out of policyholders’
operations. See Continental Casualty Company v. Employers Insurance Company of Wausau, Index No.
601037/03 (N.Y. Sup. Ct. May 8, 2007) (the “Opinion”).
The Opinion arose in the context of a reverse class action in which certain insurers sought
declarations against a class of 20,000 asbestos claimants regarding coverage under policies issued to
a defunct insulation contractor. In ruling on the requested declarations, the Court made a number of
sweeping conclusions on issues important to insurers with little reasoned analysis of the law:
• Products/completed operations aggregate limits. The insurers sought a declaration
that the asbestos claims fall within the products aggregates of the policies at issue.
The Opinion noted that the insurers, as plaintiffs, bore the burden of proving their
entitlement to this declaration. Without meaningful discussion of the applicable
policy provisions, the timing and nature of the alleged injury, or the relevant case
law, the Court found that the insurers had failed to meet their burden. Then, in an
inexplicable leap, the Court held that it must issue a declaration against the insurers
– a determination that is all the more puzzling in that the asbestos claimants had no
outstanding requests for relief pending. The Opinion concluded that generally the
20,000 asbestos claims fall outside the aggregated products/completed operations
coverage of the primary policies at issue in the case. The Court then shifted the
burden to the insurers to prove in a later phase of trial that any individual asbestos
claim