Articles & Updates

Significant New WV Decision on Trigger of Coverage

Nov 13, 2023 | Articles & Updates

Article by Nicholas Blevins, Esq.

The Supreme Court of Appeals of West Virginia recently held that a “continuous-trigger” theory applies to determine when coverage is activated under the insuring agreement of an occurrence-based commercial general liability policy if the policy is ambiguous as to when coverage is triggered. Westfield Insurance Company v. Sistersville Tank Works, Inc., et al., No. 22-828, 2023 WL 7391646 (W. Va. 2023).

In Sistersville Tank Works, Sistersville Tank Works, Inc. was insured under a CGL policy it purchased from Westfield Insurance Company. In the insuring agreement, Westfield promised to provide a legal defense for STW and to pay “those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.”

At different points in 2014, 2015, and 2016, three former employees of STW were diagnosed with various forms of cancer after repeated exposure to cancer-causing liquids, vapors, or fumes that escaped from the tanks. The claimants alleged that the cancers were, in some part, caused by STW’s tanks. Westfield denied coverage in the three suits under its CGL policies, asserting that it had no duty to defend or indemnify STW because the claimants were diagnosed four years or more after the expiration of the last CGL policy, and, therefore, STW could not establish that an “occurrence” had happened within the policy period sufficient to trigger coverage.  

The Court concluded that the occurrence and bodily injury provisions that Westfield incorporated into its insuring agreement failed to precisely articulate a trigger of coverage and was therefore ambiguous. Westfield argued in favor of a manifestation-trigger theory, in which a claimant’s disease can be said to occur only when the disease was first diagnosed, that is, when it manifested. The Court disagreed, determining that contemporaneous explanations of the meaning of “occurrence” is that a CGL policy provides coverage for gradual bodily injury and property damage. Further, those gradual injuries or damage would be encompassed by the language of the CGL policy, even if they progressed over a substantial period of time before they manifest.

Adopting the position taken by a majority of jurisdictions, the Court concluded that occurrence-based CGL policies incorporate a continuous trigger of coverage in the context of bodily injuries. To the contrary, the Court found no jurisdictions which currently follow the manifestation trigger in the context of a bodily injury, sickness, or disease. Citing Texas authority, the Court reasoned that “Occurred means when damage occurred, not when discovery occurred.”

Under the continuous-trigger theory, coverage is triggered when an individual is initially exposed to what the policy calls a “harmful condition” such as a chemical or analogous injurious substance. Coverage is also triggered when the individual suffers from “exposure in residence,” that is, the development period after exposure when the injury is latent and hidden. Finally, coverage is triggered when the sickness, disease, or other bodily injury manifests. Damages that are caused, continuous, or progressively deteriorating throughout successive policy periods are covered by all the occurrence-based policies in effect during those periods.