An issue that often arises in insurance coverage cases, especially those involving underlying products liability claims, is whether multiple claims should be treated as a single occurrence or multiple occurrences under a commercial general liability (“CGL”) policy. This determination can have a significant impact on the amount of insurance coverage available to a policyholder.
For example, if a policyholder faces thousands of asbestos bodily-injury claims and each claim is treated as a separate occurrence, it very well may be that none of the claims, individually, would exceed the “per occurrence” deductible or self-insured retention (“SIR”), and, as a result, the policyholder would have no coverage for such claims. Under these circumstances, the policyholder would benefit by arguing for a single occurrence, so that it only has to satisfy a single deductible or SIR. In contrast, if the CGL policy has no deductible/SIR and has relatively low limits of liability, the policyholder would be well-served to argue for multiple occurrences, making more “per occurrence” limits available. The most advantageous position on number of occurrences can change for policyholders and insurers, alike, depending on the policy terms, the overall coverage program, and the claims at issue.
The Ohio First District Court of Appeals recently addressed the number of occurrences in the context of underlying asbestos bodily-injury claims. In William Powell Co. v. OneBeacon Ins. Co., 2016-Ohio-8124, decided on December 14, 2016, the First District affirmed the Hamilton County Court of Common Pleas’ determination that the asbestos bodily-injury claims at issue should be treated as multiple occurrences, thereby maximizing coverage for the policyholder. In reaching its holding, the First District analyzed, inter alia, the policy language and its earlier decision in Cincinnati Ins. Co. v. ACE INA Holdings, Inc., 2007-Ohio-5576. Of particular importance was the First District’s decision to apply the “triggering-event” test – as opposed to the “cause” test – in determining the number of occurrences.
The “triggering-event” test “looks to the ‘triggering event’ that caused liability.” William Powell at ¶19. In contrast, the “cause” test looks to the cause or causes of the injury. Id. Ohio, along with the vast majority of jurisdictions, applies the “cause” test to determine number of occurrences when the policies define “occurrence” to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Applying the “cause” test, courts have found a single occurrence where the case involves the manufacture and distribution of an inherently defective product. Cases that deviate from the “cause” test, such as ACE INA and certain other cases cited by the First District in William Powell, involve materially different, less common definitions of “occurrence” that require the occurrence – not the bodily injury – to take place during the policy period in order for there to be coverage.
On December 27, 2016, OneBeacon moved to certify a conflict between the First District’s decision in William Powell and certain decisions from the Sixth and Eighth Districts on the question of whether Ohio applies the “triggering-event” test or the “cause” test to determine number of occurrences. William Powell Co. v. OneBeacon Ins. Co., 1st Dist. No. C-160291. Last week, on February 7, 2017, the First District overruled OneBeacon’s motion. And it remains to be seen whether OneBeacon will file a discretionary appeal to the Ohio Supreme Court.
A discussion of whether the First District correctly decided William Powell is beyond the scope of this article. Given the significance of the number-of-occurrences issue, however, policyholders would be well-advised to evaluate as early as possible whether a single-occurrence or multiple-occurrence determination maximizes coverage for their claims. In doing so, they should be cognizant of the operative policy language, the applicable test for determining the number of occurrences, and variations in the law among different jurisdictions.