Liberty Mutual Appeal Rejected by Wisconsin Supreme Court

The Wisconsin Supreme Court sided with Plastics Engineering Co. in its lawsuit against Liberty Mutual for insurance coverage related to asbestos liabilities.

Plastics Engineering which operates under the name Plenco, manufactured molding products that contained asbestos for more than 30 years between 1950 and 1983. The company has since been named in hundreds of lawsuits related to asbestos exposure from its products and facilities.

The company’s insurer since the 1960s, Liberty Mutual had paid just over $14 million for claims related to Plenco through 2005.

However, Liberty began to assert that its policies limited coverage and that the financial burden for future claims rested largely on Plenco. The dispute ended up in court and was eventually referred to the Wisconsin Supreme Court because of the potential impact of the decision.

Liberty argued that their policy coverage was limited because the claims should be classified as “one occurrence.” This means that claims are the result of a single mistake by Plenco and that mistake was the creation and distribution of asbestos containing materials. Thus the company argued they were not liable for claims that occurred when it was not the company’s insurer.

The Supreme Court disagreed and in a majority decision, the court ruled that each injury must be treated as a separate occurrence and Liberty Mutual is responsible for the full cost of compensating victims up to policy limits.

The ramifications of treating claims as separate injuries as opposed to a single occurrence could affect the liability of insurance companies in areas such as environmental cleanups.

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