PUBLISHED ON: October 7, 2008
Liabilities live for decades and so do insurance policies. Asbestos, environmental pollution, lead paint, pharmaceutical side effects: many, many products and practices with unintended consequences create “long tail” liabilities (i.e., damage, real or alleged, for which people may sue decades after the original event). At the same time, most comprehensive general liability policies are so called “occurrence based” policies, which means that they cover “occurrences” that happened during the policy period—even if lawsuits or government actions that trigger coverage are filed years or even decades later. In short, occurrence-based policies do not expire unless and until policy limits are exhausted. Moreover, the older a policy is, the less restrictive it is likely to be, in terms of both policy limits and exclusions. For damage or injury that occurred over the course of decades, old policies can be buried gold.