Some defendants in asbestos litigation, facing crippling debt in the face of accountability for concealing the danger of their products and failing to protect the public, filed for bankruptcy and established trusts to pay out current and future claims.
More than 100 companies have filed for bankruptcy protection due in whole or in part to asbestos litigation, collectively containing about $20 billion in assets – and another $12 billion in assets pending, according to an analysis by Bates White Economic Consulting. It’s important for mesothelioma attorneys to keep careful tabs on how much is contained in these trusts because it plays a role in how much will be paid out per each individual claim.
Many of the bankrupted companies – and claimants – have relied on previous insurance policies to make good on claim payments. In fact, a 2015 report by rating agency A.M. Best Co. indicated the insurance industry has paid out more than $90 million in combined asbestos and environmental losses, and there is approximately $27 billion still available to fund future payments. This heavy reliance on the insurance industry makes it imperative to follow the cases that may have an impact on claimants’ ability to collect. Recently, the U.S. Bankruptcy Court for the Southern District of New York recently ruled in Rapid-American Corp. et al. v. Travelers Casualty & Surety Co. et al. that providers of excess insurance to a now-bankrupt asbestos product manufacturer do not have to provide coverage unless and until the primary insurers have paid in full under those policies.
Rapid-American, founded in 1988, is headquartered in New York and manufactured insulation and other industrial applications, such as pipes, boilers, generators and more. For approximately 80 years, the company was also in the business of mining asbestos and manufacturing products that contained asbestos for other companies. Not only were many of the company’s workers exposed to the highly-toxic, fibrous substance, but workers in other companies that used its products were as well.
Many former employees have filed workers’ compensation claims against the firm, while others have sought compensation through product liability lawsuits.
Back in 1998, the company reached a settlement with most of its insurers. However, a number of those soon after became insolvent and couldn’t pay the full limits on those policies. But the excess policies relied on a certain amount being paid by the primary insurers before the excess coverage would kick in. Because that amount hadn’t yet been paid, the judge ruled, the excess policy insurers aren’t responsible for stepping up and paying for damages outside of the original policy.
Plaintiffs in the case had argued that the excess policies at issue could provide a total of $64 million, and that claimants shouldn’t have to be responsible for ensuring the underlying limits of the primary insurers are exhausted before turning to the excess policy insurers. But the bankruptcy court ruled otherwise. She determined the language in the excess policies were not ambiguous and therefore, she decided in favor of the insurers.
If you have suffered an asbestos-related illness and are interested in filing a claim for compensation through an asbestos trust, contact the experienced Boston mesothelioma attorneys at Jeffrey Glassman Injury Lawyers.
Call for a free and confidential appointment at (617) 777-7777.
AIG, Travelers units not liable for payment on asbestos claims, June 8, 2016, By Judy Greenwald, Business Insurance
More Blog Entries:
More Promising Results for CRS-207 Mesothelioma Vaccine, June 14, 2016, Boston Mesothelioma Lawyer Blog