West Virginia Supreme Court Rules for Continuous Trigger in Long-Tail Illness Claims Against Insurers

The West Virginia Supreme Court recently delivered a pivotal ruling that impacts liability insurers, particularly those writing policies in the state. This ruling affirms the continuous trigger theory in cases of long-tail illness claims, stating that insurers are obliged to cover and defend claims, even if the illness manifests years after the policy’s expiration. The decision came in response to a question certified by the U.S. 4th Circuit Court of Appeals concerning claims against Sisterville Tank Works, where Westfield Insurance is now required to cover latent disease claims from workers diagnosed with cancer after 2014, despite the policy ending in 2010. The Court emphasized that damages caused or continuously deteriorating throughout successive policy periods are covered by all occurrence-based policies in effect during those times.

The ruling stems from a lawsuit against Sisterville Tank Works filed by three workers who developed cancer due to alleged negligent manufacturing practices. Westfield Insurance, which had insured the company for four decades, initially denied the claims and refused to defend the lawsuits, asserting that its policies provided only occurrence-based or manifestation-based coverage. However, a federal district court found that Westfield’s policy language did not clearly identify the trigger for coverage in cases involving gradual disease development over several policy periods.

The West Virginia Supreme Court’s decision was heavily influenced by historical research into insurance industry practices dating back to the 1940s. The Court noted that insurers, prompted by regulators, had standardized language in commercial liability policies to cover accidents during the policy period, leading to ambiguity about the definition of an "accident." In 1966, industry trade groups introduced new standard policy language, which is still largely in use, to provide coverage on an occurrence basis, including for insidious diseases and gradual injuries. The Court concluded that the continuous trigger theory applies in such cases, a stance supported by multiple court rulings in similar situations.