The big star-studded release party, for the 5th edition of Insurance Key Issues, was held last week in Las Vegas. Well, as the above picture shows, maybe calling it a release party is a bit much. I was in Vegas and had dinner with Jeff Stempel at In-N-Out Burger. [In-N-Out Burger is a huge treat for an East coast guy like me.] Fellow co-author Margo Meta attended by Face Time. Since Margo was not there in person, I ate her fries. Well, they were just sitting there. It seemed crazy for them to go to waste.  
           
The new edition of Insurance Key Issues is still selling really well. Perhaps that explains why, to my great dismay, Amazon has put it back to full price. But, as I've said, who knows? [It was still on sale yesterday when I initially wrote this.] To try to understand Amazon pricing is a fool's errand. Hopefully Amazon will drop it again.   

Insurer's Unique Idea For Solving Trigger Problem

This is a not uncommon situation and one that you've probably seen.

A CGL policy requires bodily injury or property damage during the policy period. The complaint alleges bodily injury or property damage. However, it does not say when the bodily injury or property damage took place. Thus, since it does not say that bodily injury or property damage took place during the policy period, as required by the insuring agreement to trigger a defense, the insurer has a basis to conclude that no defense is owed. However, the complaint also does not say that the bodily injury or property damage did not take place during the policy period. Does that now give rise to a duty to defend?

As demonstrated by the recent Texas federal court decision in Crum & Forster Specialty Insurance Co. v. Chemicals, Inc., No. H-20-3493 (S.D. Tex. Aug. 5, 2021), C&F was aware of this issue. The insurer drafted an endorsement to address it. However, despite its cleverness, the court navigated around it. 

At issue in Crum & Forster v. Chemicals, Inc. was coverage for Chemicals for hundreds of personal-injury suits filed against it, and consolidated in an MDL in South Carolina, by firefighters who alleged exposure to toxic substances in aqueous film-forming foams (AFFF) designed, manufactured and marketed by several defendants, including Chemicals. The complaints do not allege dates that the firefighter-plaintiffs were exposed or when they first manifested symptoms. [This is the PFAS litigation that has been getting so much attention of late.] 

C&F issued policies from 2011 to 2019. The policies' insuring agreement requires that bodily injury first occur during the policy period. 

As noted, the complaints do not allege dates that the firefighter-plaintiffs were exposed or when they first manifested symptoms.

However, the C&F policies then state: "If the date cannot be determined upon which such 'bodily injury' . . . first occurred[,] . . . then, . . . such 'bodily injury'. . . will be deemed to have occurred or existed, . . . before the 'policy period.'" 
 
As C&F saw it, based on this provision, since the dates of injury cannot be determined, they are deemed to have occurred outside of the policy period. Hence, it has no duty to defend. 

The court, focusing on the language "cannot be determined," disagreed:

"The policy stated only that the date can 'be determined,' not who must make the determination, or that it must be made with no evidence or opportunity to present it. …The facts alleged in the underlying complaints support the potential for coverage. The policy periods are between 2011 and 2019 and the underlying plaintiffs allege exposure and injury from work performed during these periods. The allegations support an inference that Chemicals may later present a basis to determine the dates the exposures or injuries first occurred or existed. The allegations do not show that the dates of loss 'cannot be determined.' As a result, the duty to defend is triggered."

The problem with the language, identified by the court, is correctable. The language could provide that, if the date bodily injury first occurred "is not stated in the complaint," then it will be deemed to not have occurred during the policy period.
  
It is an interesting idea to confront a duty to defend issue and I can envision other insurers taking a page out of the C&F playbook – whether their insuring agreement requires bodily injury that first occurs during the policy period or the more common language – simply bodily injury or property damage that occurs during the policy period. 

N.B. I was not surprised to see that Shidlofsky Law Firm in Austin (Rebecca DiMasi and Lee Shidlofsky) successfully represented Chemicals, Inc. Lee Shidlofsky contributed a guest article to CO in 2017. As I said that at the time, while everything is bigger in Texas, there is an exception. When it comes to law firms representing policyholders, for my money, the go-to firm in Texas is Shidlofsky Law Firm in Austin. Don't be fooled by its size. Its four lawyers handle some very heady and sophisticated coverage cases in the state.