Side Note: Delaware Chancery Court Issues Important Opinion on Excess Insurance Coverage for Asbestos Exposure
Although not within the technical bailiwick of this blog, I thought it was worthwhile to point out the Delaware Chancerty Court's recent decision in Viking Pump, Inc. v. Century Indemnity Co., Civ. A. No. 1465-VCS, Slip op. (Del. Ch. Oct. 14, 2009). In Viking Pump, two corporate purchasers of a pump manufacturing business sought to use excess insurance coverage previously purchased by the seller to cover asbestos claims for exposures that occurred during the period when the seller owned the business. The contracts of sale had transferred to plaintfifs the right to make claims. The policies, however, had sought to prevent such a transfer.
The court held that New York law overrides the policy provisions preventing post-loss assignments of the right to make a claim. In other words, where the exposure occurred while the seller owned the business, the subsequent purchasers could bring the claims, regardless of how the contract was worded. Moreover, the court interpreted the polcies to make the insurer liable for "all sums" of the liability arising from an occurrence during the policy's coverage, including occurrences involving multi-period exposure. (The insurers had argued for a pro rata method of allocation.)
