What you need to know:

A recent Massachusetts federal trial court ruling applied pro-rata allocation and continuous trigger to progressive injury claims arising from asbestos and toxic chemicals and metals.

What you need to do:

Insurers should consider the court’s ruling in determining the appropriate allocation of indemnity and defense costs relating to progressive injuries under Massachusetts law, and in settling claims against their insureds.


Insurers sought a declaratory judgment that their insured D.N. Lukens, Inc. must contribute its pro-rata share of payments made to settle toxic tort claims, under Boston Gas Co. v. Century Indem. Co., 910 N.E.2d 290 (Mass. 2009). In November 2009, three weeks before trial in one of the underlying cases, and a few months after the Massachusetts Supreme Judicial Court decided Boston Gas in July 2009, one insurer informed Lukens that it was responsible for its pro-rata share of liability during uninsured periods.

The insurer settled the case before trial without Lukens’ consent. Lukens tendered two additional asbestos claims, and the insurers agreed to defend Lukens under a reservation of rights to seek contribution from Lukens for liability during uninsured periods. Lukens sought to control the defense of those suits, and the insurers refused. See Graphic Arts Mut. Ins. Co. v. D.N. Lukens, No. 11-cv-10460- TSH, 2013 U.S. Dist. LEXIS 75201 (D. Mass. May 29, 2013).

The Court’s Ruling

The federal trial court held that:

  • Pro-Rata Allocation. Pro-rata, time-on-the-risk allocation under Boston Gas applied because the underlying suits all alleged progressive injuries, and available evidence did not permit the allocation of liability to specific time periods.
  • Continuous Trigger. The continuous trigger applied because it provided the insured with “the greatest amount of insurance coverage and most accurately reflects the ‘reasonable expectations’ of an insured.” The court noted that Lukens would have no coverage under either the manifestation or exposure triggers, and that “the ‘injury-in-fact’ approach is not practical for personal progressive injury cases, as it is almost impossible to determine when the exposure to a hazardous substance will result in actual physical injury.”
  • Settlement Without the Insured’s Consent. The insured did not owe the insurer a pro-rata contribution for the one suit settled without the insured’s consent because “any settlement under the Boston Gas rubric contemplates the written consent of the parties to a settlement.”
  • Allocation of Defense Costs for Uninsured Periods. The insurer could seek the insured’s prorata contribution for liabilities from the asbestos suits despite refusing to yield control of the defense of those suits. The insurer did not disclaim its indemnity obligation outright, but only its duty to indemnify for uninsured periods, which did not require the insurer to cede the defense to the insured. The insured bore pro-rata responsibility for defense costs.
  • Chapter 93A Claims. The insurer did not violate Mass. Gen L. c. 93A by refusing to cede control of the defense of the underlying suits, because the law governing coverage for progressive injuries “was, and is, in a state of flux.” However, material issues of fact remained as to whether the insurer violated chapter 93A by waiting until three weeks before the trial of one of the underlying cases to inform Lukens that Lukens was on the risk, that the insurer planned to settle the case, that Lukens was expected to contribute a pro-rata share of the settlement, and that the insurer would not seek to have the case continued.


The United States District Court for the District of Massachusetts applied pro-rata, time-on-the-risk allocation and the continuous trigger to underlying claims alleging progressive injuries arising from toxic chemicals and metals and asbestos. The court also allocated defense costs to the insured for uninsured periods, but held that the insured did not owe pro-rata contribution for one suit settled without the insured’s consent.