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The decision was released Sept. 30 by the New Jersey Appellate Division, which rejected excess insurer claims that they should be relieved of all or some of their obligations under a $1.8 billion insurance program for tens of thousands of underlying asbestos claims, addressing several key issues as a matter of first impression under New Jersey law.
"We are happy that the New Jersey Appellate Court has ruled in favor of the policyholder and put an end to the repeated attempts by the insurance industry to block coverage for asbestos liabilities that they insured under standard insurance policies sold throughout the country," Cohen, a standout insurance coverage litigator and regular Lawdragon 500 member said.
IMO Industries v. Transamerica Corp. was an appeal from the policyholder verdict in a four-day bench trial held in 2010, as well as rulings in IMO’s favor in nearly a dozen substantive motions decided by the trial court, which found that the excess carriers were obligated to pay hundred of millions of dollars in coverage up to their limits of $1.85 billion in coverage.
The Appellate Division rejected the excess insurers’ positions as contrary not only to the specific policy language, but also to the New Jersey Supreme Court in Owens-Illinois v. United Insurance Co., that the allocation of long-tail claims be conducted in a manner most likely to “reduce the litigation costs and judicial inefficiencies attendant to resolving the insurance coverage for long-term environmental damages.”
Law360 also covered the decision.