The Court considered how to allocate defense and indemnity responsibilities among various insurers in The Travelers Indem. Co. v. W.M. Barr & Co., No. 2:08-CV-02649 (D. Tenn. Nov. 28, 2011).
W. M. Barr manufactured a variety of solvents, removers, and other related products. Barr was sued in various lawsuits alleging injury resulting from benzene contained in its products. Barr held CGL policies issued by various carriers from 1965 to the present. One insurer, Travelers, sued, seeking a declaratory judgment and the recovery of a proportionate share from Barr and the various insurers for the costs of defending Barr in the underlying lawsuits. Barr filed a counterclaim against Travelers and cross-claims against the defendant insurers, alleging they had breached their policies for failure to defend Barr in the underlying suits.
Barr moved for summary judgment to establish the insurers had a duty to defend or to settle, a finding that these insurers breached their contractual duties, and an award of damages.
One group of insurers had issued polices without self-insured retentions. The central issue was whether these insurers were responsible only for a pro rata allocation of the costs of defendant Barr, with Barr covering defense costs that certain insolvent insurers would have been obligated to pay. The court found no express pro rata provision in the policies, nor any language to suggest the parties intended such a partial exclusion of coverage. So long as a lawsuit brought against Barr alleged benzene exposure during a period in which such a policy was in force, the insurer had to indemnify and defend such claims in their entirety, even if the injury at issue was, in part, suffered outside of the insurer's policy period. While the insurer could seek contribution from other insurers it had no such right against the policyholder as so-called "self-insurer."
The court next considered the insurers who issued polices with self-insured rententions. The central issue under these policies was whether the "per occurrence" language of the SIR provisions was properly construed as meaning per claims, as the insurers argued, or as including all claims arising out of the same defect in the manufacture and sale of its products, as Barr asserted. The court agreed with Barr. The "per occurrence" language was properly construed as including all claims arising out of the same defect in the manufacture and sale of its products.
