The New Jersey state Supreme Court recently handed down a significant ruling that will have an important impact on asbestos cancer litigation in the state and potentially nationwide for claims against Honeywell International and other asbestos companies. The ruling centers around the insurance many of these asbestos companies retain in order to shield themselves financially from verdicts and settlements in mesothelioma cancer lawsuits for claims related to asbestos-contaminated products.
In its decision, the New Jersey Supreme Court affirmed lower state court rulings holding that a policyholder is not required to contribute in the allocation of insurance liability for periods when the relevant insurance coverage was unavailable to that policyholder in the marketplace. What this means is that insurance companies indemnifying asbestos companies may still be on the hook for legal bills even if the manufacturer did not have continuous coverage from the insurance company in question during the time the defective products were manufactured.
The case arose because Honeywell International, which once manufactured brake pads with asbestos in them, sought coverage from its carrier, Continental Insurance Company, for thousands of mesothelioma cancer claims brought against it. Continental attempted to avoid paying the claims, arguing that Honeywell International did not have coverage during the time periods in which the company manufactured the asbestos-laden products that brought on the lawsuits.