Are All Liability Insurance Policies Exposed To Unlimited Operations Coverage From Asbestos Claims?

All policies are not exposed to unlimited operations coverage from asbestos claims. First, not all asbestos claims present operations coverage issues. The “operations issue” arises from the fact that many CGL policies provide aggregate limits only for claims arising from certain types of hazards—typically Products and Completed Operations. Injuries arising from an insured’s ongoing operations are arguably not subject to an aggregate limit. Therefore, to the extent an asbestos claimant’s injury is the result of exposure during the insured’s operations, the claim arguably is not subject to an aggregate cap. But not all insureds that are subject to asbestos claims conducted operations. For example, manufacturers of asbestos-containing products that never performed installation or service work on their products typically do not face “operations” claims—and manufacturers are a very large portion of asbestos defendants. Typically, it is insureds in the building trades—contractors and installers of asbestos building materials—that face “operations” exposures.

Second, not all policies restrict aggregate limits only to Products and Completed Operations claims. Some provide a total limit of liability. See, e.g., Garamendi v. Mission Ins. Co., 131 Cal.App.4th 30, 41, 49 (2005).

Third, for policies incepting after the operations are completed, even asbestos injury arising from prior operations exposure is nonetheless subject to a “completed operations” aggregate in the typical insurance policy. See In re Wallace & Gale Co., 385 F.3d 820, 834 (4th Cir. 2004); see also In Re Wallace & Gale Co., 275 B.R. 223, 237 (2002).

Finally, if all asbestos claims are deemed “one occurrence,” the operations issue is entirely mooted.