Appeals Court Upholds Decision in Asbestos Case

After a settlement between Graphic Packaging International and 260 employees or former employees who sued the company for damages due to asbestos-related illnesses allegedly caused by asbestos exposure at the company’s Louisiana plant, the company sent letters to insurers, including Employers Insurance of Wausau.   According to BestWire Services, the letters identified the claims as “bodily injury by disease” claims.

Wausau denied payment of the claims based on policy provision which excludes “bodily injury by disease” claims if they are not brought within 36 months after the end of the policy period.   Graphic filed suit against Wausau saying the policy was ambiguous as to whether the asbestos claims would fall under “bodily injury by accident” or “bodily injury by disease.”

The lower court ruled in favor of Wausau saying the asbestos related illnesses qualify under “bodily injury by disease,” according to BestWire.   The Court of Appeals upheld this ruling and said in its decision that this was the only reasonable interpretation of the policies.

BestWire reports that Robert Hurns, counsel for the Property Casualty Insurers Association of America, said in a statement, “This decision recognizes a contractual exclusion is exactly that: an exclusion that eliminates coverage.”