If the manufacturer sells its asbestos-containing product without a warning, does this constitute one occurrence?  Or is each individual's exposure to asbestos, which results in injury, a single occurrence?  These were among the issues before the Wisconsin Supreme Court when faced with certified questions from the Seventh Circuit.  See Plastics Engineering Co. v. Liberty Mutual Ins. Co., No. 2008AP333-CQ (Wis. Jan. 29, 2009) [here].

        The insured manufactured and sold asbestos-containing products from 1950 to 1983.  The insured was named in a number of suits because of bodily injury or wrongful death allegedly related to exposure to its asbestos-containing products.  The insured held several primary and excess policies issued by Liberty Mutual during the years of alleged exposure and injury. 

    At trial, the federal district court concluded each person's injury resulting from exposure to asbestos constituted a separate occurrence.  Further, Liberty Mutual was obligated to pay all sums arising from an occurrence and was not entitled to a pro rata contribution from the insured.  On appeal, the Seventh Circuit determined the issues presented important unresolved questions under Wisconsin law, and certified questions to the Wisconsin Supreme Court.

    The Wisconsin Court first held that under the policy language, each individual's repeated exposure constituted an occurrence.  Under the cause theory, adopted in Wisconsin, where a single, uninterrupted cause results in all of the injuries and damage, there is one accident or occurrence.  Therefore, each claimant's repeated exposure was one occurrence.  The Illinois Supreme Court also recently addressed the issue of multiple occurrences.  [see post here].

    Next, the court held that once the policy was triggered, Liberty Mutual had to fully defend the lawsuit in its entirety and was responsible for "all sums," up to policy limits.  Under the all sums approach, the insurer was required to pay all sums that resulted from bodily injury that triggered a policy.  Accordingly, the Wisconsin Supreme Court decision on the "all sums" approach was consistent with the recent California Court of Appeal decision, State of California v. Continental Ins. Co.,  2009 Ca. App. LEXIS 1 (Cal. Ct. App. Jan. 5, 2009)[see post here].