Two CNA Financial Corp. subsidiaries have filed a lawsuit against Hennessy Industries Inc. and several other insurance companies over asbestos claims dating back to before 1981.
In the lawsuit, Continental Casualty Co. and Columbia Casualty Co. seek the court's opinion that they have no obligation to indemnify Hennessy, as successor-in-interest to Ammco Tools Inc., if the company hasn't exhausted all available primary insurance coverage.
"Hennessy has not demonstrated precisely when injury took place with respect to each underlying action or the amount of injury that occurred during any particular policy period. Consequently, Hennessy has not proven proper exhaustion of insurance underlying the plaintiffs policies," the lawsuit said.
The case also names 15 other insurance companies that wrote primary general liability insurance for Ammco, including: Transport Insurance Co., which is also a subsidiary of CNA; various Lloyd's underwriters; Equitas Insurance Ltd., which was established in 1996 to reinsure and run-off the 1992 and prior years' nonlife liabilities of Lloyd's Underwriters; American Home Assurance Co., National Union Fire Insurance Company of Pittsburgh, Pa., and Insurance Company of the State of Pennsylvania, all subsidiaries of Chartis; Allstate Insurance Co., as the successor to Northbrook Excess and Surplus Lines Co.; and Munich Reinsurance American Inc.
Others are First State Insurance Co. a subsidiary of Hartford Insurance Group that was placed into runoff in 1992; Executive Risk Indemnity Inc., a Chubb subsidiary; Twin City Fire Insurance Co. and Hartford Underwriters Insurance Co., both subsidiaries of Hartford; United States Fire Insurance Co., a subsidiary of Crum & Forster Insurance Group; TIG Insurance Co., Fairfax Financial Holding's subsidiary in runoff; and Zurich American Insurance Co.
The case, filed in the Cook County Circuit Court, alleges Ammco is subject to tort liability for injuries sustained due to asbestos exposure from the products, including brakes, that Ammco manufactured, distributed, or sold from 1955 through 1987.
Continental issued umbrella and excess third-party liability insurance policies to Ammco. Columbia issued one excess general liability insurance policy to Ammco.
As Ammcos successor, Hennessy has demanded its excess insurers, including Continental and Columbia, pay for costs associated with claims where the plaintiff has alleged a date of last exposure before Sept. 30, 1981.
Continental and Columbia disagree that they are obligated to pay any claims costs associated with the exposure before Sept. 30, 1981.
Despite its objections, Continental has agreed to defend Hennessy and has spent more than $3 million so far, which it seeks to recoup through the lawsuit.
The U.S. property/casualty industry in 2010 posted its second straight year of nearly 50% increases in net asbestos and environmental losses, according to an A.M. Best Co. special report. This follows a 47% decrease in 2008. A.M. Bests view of ultimate industry A&E losses is $117 billion.