The court rejected the insurer's argument that two triggers - one for exposure to asbestos and one for resulting injury - were required under CGL policies. Compass Ins. Co. v. University Mechanical and Engineering Contractors, Inc., 2016 U.S. Dist. LEXIS (N.D. Cal. March 25, 2016).
University Mechanical and Engineering Contractors, Inc. (UMEC) was a California corporation in the business of installing plumbing, piping and HVAC systems. UMEC was defending a number of asbestos cases in California state courts arising from its subcontracting work.
For May 1, 1981 to May 1, 1982, UMEC had a CGL policy with Compass. There was no dispute regarding coverage obligations for claims where the asbestos exposure and injury happened during the policy periods. The dispute concerned whether Compass also owed coverage for asbestos injury during the policy period caused by asbestos exposure prior the period. Compass argued that the policies required exposure and injury to have happened within the policy terms - in other words, two triggers for coverage. The "Policy Period, Territory" section of the policy stated it applied "only to occurrences which take place during the policy period . . . " Compass read the definition of "occurrence" and the "Policy Period, Territory" sections together to mean that coverage was triggered only when exposure to asbestos and injury both happened within the policy period.
The court disagreed. The policy words "during the term of this policy" clearly referred to the fact of injury or damage, and not to exposure. Injury or damage was the defining characteristic of an occurrence, and the time limitation of "during the term of this policy" followed and was attached to "injury or damage." By the ordinary meaning of these words, what must "result . . . during the term of the policy" was injury or damage. The event or exposure that caused the injury did not also need to happen within the policy period.
The insurer's interpretation also contravened well-established California law holding that injury was the trigger of coverage in circumstances like those presented here. California courts specifically treated asbestos and other toxic exposure injury as subject to the continuous trigger rule.