State high court adopts ‘continuous-trigger theory’ in ruling against insurer

The West Virginia Supreme Court Wednesday adopted the “continuous-trigger theory of coverage” in a case it was asked to consider by a federal appeals court.

Under that theory, when a claim alleges a hidden or progressive injury, every occurrence-based policy in effect from the initial exposure through the harm’s manifestation applies. It contrasts with the “manifestation trigger,” where coverage is triggered based on when the injury was diagnosed, discovered or manifested.

The case, Westfield Insurance Co. v. Sistersville Tank Works Inc. et al., involves efforts by Sistersville, West Virginia-based Sistersville Tank Works to obtain coverage from Westfield for state tort claims alleging that its negligence in manufacturing its products contributed to plaintiffs’ latent illnesses.

The underlying plaintiffs were three claimants whose latent illnesses were diagnosed between 2014 and 2016 and who blamed their illnesses on exposure to a hazardous chemical in STW-manufactured tanks dating back to the 1960s.

The U.S. District Court in Wheeling, West Virginia, issued summary judgment in STW’s favor. On appeal, the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, asked the West Virginia Supreme Court in 2022 to decide when coverage may be triggered for latent illnesses.

“We agree with the interpretation favorable to STW, that the ambiguous policy language incorporates a continuous trigger,” the majority opinion said in its 4-1 ruling.

“In summary, history shows that the ‘occurrence’ language incarnated into the CGL policy was designed with the goal of affording coverage for singular, repeated, or continuous exposures to hazardous substances if those exposures cause either a singular or a progressive bodily injury, sickness, or disease,” the ruling said.

The West Virginia Supreme Court said its analysis of five decades of state and federal case law indicated that 16 jurisdictions have concluded that occurrence-based commercial general liability policies incorporate a continuous trigger of coverage in the context of bodily injuries and that no court has concluded that coverage is triggered when the bodily injury manifested.

“Further, engrafting a manifestation trigger to limit coverage for progressive injuries would, in effect, turn Westfield’s occurrence-based CGL policy into a claims-made policy,” it said.

The dissenting opinion said the court “should have found that if an occurrence-based CGL policy is ambiguous as to when coverage is triggered, the manifestation theory of coverage applies because it would provide certainty to all parties as to when coverage is triggered.”

STW attorney Patrick S. Casey, of Casey & Chapman PLLC in Wheeling, said in a statement that the ruling “sends a strong message to the insurance industry that businesses small and large should receive the benefit of their bargain when they purchase insurance.”

The insurer’s attorneys did not respond to a request for comment.