Insurance Companies Dealt a Blow by Wisconsin Supreme Court in Asbestos Case

In a ruling from the Wisconsin Supreme Court, Liberty Mutual Group must pay the full cost of lawsuits filed against Plastics Engineering Co., based in Sheboygan. The result of the ruling will be a boon to companies who clean up contaminations or who have been sued for asbestos exposure. These groups will benefit from a greater extent of insurance coverage. Plastics Engineering, known as Plenco, was sued by hundreds of people who had been exposed to asbestos in the molding compounds made at the company’s plant between 1950 and 1983. The dispute between Plenco and Liberty Mutual arose when Liberty Mutual stopped paying asbestos claims past 2005 after it had already paid out $14.3 million. The insurer claimed that its policy limited coverage. Plenco disagreed, saying the result would be that its coverage would be reduced from $73 million to $10 million; the case went to the federal court system since Liberty Mutual was based out of Boston, Massachusetts.

The Wisconsin Supreme Court rejected Liberty Mutual’s claims that the coverage should be limited because it stemmed from a single incident — the use of asbestos-containing products. It also noted that it should not be responsible for claims prior to when it became Plenco’s insurer in the 1960s. With the Supreme Court’s verdict, Plenco’s coverage will increase. Other companies who require insurance to deal with asbestos litigation will also see increases in their coverage. According to the lawyer representing Plenco, Jeff Davis, “It’s a great result for Plastics Engineering and all Wisconsin insureds.” He said, “It’s an issue that has come up around the country in litigation, and Wisconsin had not yet weighed in on it.” Some environmental cleanup projects, which have been waiting on money from these insurers, could see the money appear faster, enabling them to complete their work in a more timely manner. More businesses would also be able to stay in business since they can be assured that their liability costs will be covered by their insurance company.