The state Supreme Court has ruled that multiple coverages can mean multiple payouts.
The latest insurance news from the California Supreme Court has shown that it has ruled that the state and businesses who are covered by liability policies purchased from multiple insurers are now able to collect from each of those insurers separately when major losses are incurred.
This is a potentially huge victory for both the state and the companies operating within it.
One of the state’s lawyers explained the insurance news by saying that this ruling, which was unanimous, will require California insurers to pay approximately $60 million, including interest, for part of the liability of the state in the Riverside County water pollution incident at Stringfellow Acid Pits. Though this will mean that companies and the state will receive more payments in situations such as this, it could also mean that policyholders will face higher costs.
The result may be statewide insurance news of premiums increases by billions of dollars.
The attorney, named Scott Simpson, explained that “It will make it easier to fund cleanup of hazardous waste sites and pay for (reimbursement) of those who suffer long-term injury.” He stated that this court decision will apply to the coverage for liability in other cases that cause harm over a longer period of time, such as asbestos exposure.
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The attorney for the manufacturers that filed the arguments in support of the state, Rene Siemens, said that this decision “further cements California’s reputation as a paradise for policyholders.”
However, a lawyer representing a California insurance company has also said that the benefits of this case will be limited because this type of policy will generally exclude the type of coverage needed for pollution or may expressly prohibit policyholders from being able to use the same loss period in order to collect from more than one insurer.
Equally, the London carriers lawyer, Philip Matthews, said that this will only cause the costs of insurers to increase and may very well cause them to have to send their rates upward. The Stringfellow case has already been settled with the state by that insurer, but it went ahead to support the efforts of the other companies to minimize their liability. The attorneys of those other companies were not available for insurance news comment.