Travelers lost a $6 million coverage dispute after an Ohio appellate court ruled that multiple asbestos claims should be treated as separate occurrences rather than a single event.
In a February 17 decision, the Third Appellate District Court of Appeals sided with Copeland Corporation on two key issues: which state’s law governs the policies and how to count occurrences under those policies. The ruling affects three insurance policies issued in the early 1980s, each with $1 million per occurrence limits and $3 million aggregate limits.
Travelers had already paid $3 million and argued that the policies were exhausted. The insurer maintained that all asbestos claims arose from a single occurrence, namely Copeland’s decision to manufacture and distribute compressors containing asbestos gaskets. Under that interpretation, the $3 million aggregate limit applied once and no further coverage remained.
The court rejected that position. Instead, it concluded that each individual’s exposure to asbestos constitutes a separate occurrence. As a result, Copeland may access up to the full $9 million aggregate coverage available across the three policies.
Background of the Dispute
Copeland Corporation, an Ohio-based manufacturer, produced compressors for refrigeration and cooling products for decades. The compressors incorporated gaskets supplied by outside manufacturers. Beginning in the early 2000s, individuals filed lawsuits alleging illness from asbestos exposure linked to those products.
The policies at issue were issued to the Hillman Company, a Pennsylvania-based conglomerate that owned Copeland as a subsidiary from 1981 to 1985. Copeland was listed as a named insured under the policies.
The parties first disputed which state’s law applied. Travelers argued for Pennsylvania law because the policies were issued to a Pennsylvania company. Copeland contended that Ohio law should govern because it operated entirely in Ohio, manufactured the compressors in Ohio, and paid its share of premiums from Ohio.
The appellate court determined that Ohio had the more substantial connection. Hillman faced no direct exposure from the asbestos claims and showed no interest in the litigation. In contrast, Copeland was a named insured whose business operations were based in Ohio. The court also noted that Travelers had an Ohio representative involved in underwriting the policies and separately assessed Copeland’s risk based on its Ohio operations.
Interpreting “Occurrence” Under Ohio Law
After determining that Ohio law controlled, the court examined how to count occurrences.
The policies defined an occurrence as “an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the stand-point of the insured.”
An aggregation clause stated that “all bodily injury, personal injury, property damage and advertising offense arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence.”
Travelers advanced a cause-based approach. It argued that the underlying cause of the injuries was Copeland’s manufacture and distribution of compressors with asbestos-containing gaskets. Therefore, the insurer asserted that the claims should be treated as one occurrence.
The court declined to apply that theory. Instead, it adopted the triggering-event approach, following prior Ohio asbestos decisions. Under this framework, the relevant event is not the manufacturer’s decision to use asbestos. Rather, it is each individual’s exposure to asbestos.
The court emphasized that the underlying claims involved individuals across the United States who were exposed to asbestos in different Copeland products, at different job sites, during different time periods, and under varying circumstances. The court found that treating all such exposures as a single occurrence was inconsistent with the facts.
The policy language also supported this interpretation. The definition of occurrence expressly referenced “exposure to conditions.” Moreover, the aggregation clause applied only when injuries arose from exposure to “substantially the same general conditions.” According to the court, exposures occurring at different times and locations did not meet that standard.
Financial Impact and Precedent
The practical effect of the ruling is significant. Under a single-occurrence theory, Copeland’s coverage would be limited to $3 million in total, which Travelers had already paid. Under the multiple-occurrence interpretation, Copeland may access up to $3 million per occurrence, subject to the $9 million aggregate limit across the three policies.
The decision aligns with earlier Ohio appellate rulings that applied the triggering-event theory in asbestos cases. The court cited Cincinnati Insurance Co. v. ACE INA Holdings and William Powell Co. v. OneBeacon Insurance Co. as supporting authority.
The ruling adds to Ohio precedent addressing occurrence-based language in long-tail asbestos claims and highlights the role of state law and policy wording in coverage determinations.
