Insurance Coverage for Long-Tail Liability Claims: Introduction to Trigger, Allocation, and Exhaustion

In May 2016, the New York Court of Appeals issued its long-anticipated decision in In re Viking Pump, holding that insurance policies spanning a multi-year period jointly and severally covered asbestos-related liability, and that excess coverage could be tapped immediately upon the exhaustion of the directly underlying primary insurance.

These " all-sums" and "vertical exhaustion" rulings, generally favorable to policyholders, will be hugely influential in New York and elsewhere. It is essential that policyholders facing claims involving progressive bodily injury (such as exposure to hazardous substances) or continuous property damage (such as environmental contamination) understand the issues of trigger, allocation, and exhaustion: (1) When the covered injury or damage occurs over a prolonged period of time, which policies respond? (2) If multiple policies are triggered, how are the covered damages allocated among them? and (3) Under what circumstances is excess coverage available?

This course, presented by Benjamin D. Tievsky of Pillsbury Winthrop Shaw Pittman LLP's policyholder-side Insurance Recovery & Advisory Group, introduces the audience to these important coverage issues, explores approaches taken in various jurisdictions, addresses recent developments in case law, and offers practical guidance for dealing with trigger, allocation, and exhaustion.

Learning Objectives:

1. Understand how long-tail claims can give rise to complex coverage issues that may limit access to primary and excess coverage
2. Learn about the basic approaches to trigger, allocation, and exhaustion, including recent case law developments in major jurisdictions
3. Develop tools to identify potential issues before they are raised for the first time in a coverage dispute