Court Sides with Asbestos Victim’s Heirs Over Insurance Time-Bar Dispute

The Louisiana 4th Circuit Court of Appeal reversed a lower-court ruling in May vs. Cooper/T. Smith Stevedoring Co. Inc., finding that Liberty Mutual and the Louisiana Insurance Guaranty Association (LIGA) failed to prove that a 36-month exclusion applied to a mesothelioma wrongful death claim filed decades after policy expiration. The court emphasized that any ambiguity in policy language must be construed in favor of coverage.

At issue was ‘Exclusion (e)’ in the WC/EL policies, which insurers claimed barred ‘bodily injury by disease’ claims filed more than three years after a policy’s termination. May’s heirs argued that the contract’s overlapping definitions of ‘bodily injury by disease’ versus ‘by accident’ created uncertainty about whether mesothelioma fit either category.

The appeals panel agreed, highlighting that the policies neither enumerated diseases nor clearly delineated which diseases qualified as ‘caused by accident.’ Moreover, the insurers did not submit the original policy forms, relying instead on secondary evidence, and thus did not meet their burden to enforce the exclusion. Under Louisiana law, ambiguous provisions that could reasonably be read two ways must benefit the insured.

A lone dissent by Judge Karen K. Herman cautioned that prior 4th Circuit decisions had upheld similar exclusions. Nonetheless, this landmark ruling may open the door for mesothelioma and other long-latency disease claimants to pursue coverage long after exposure, reshaping how insurers defend late-filed occupational illness suits.