Asbestos Suits Against Employers Present New Risk for Employer’s Liability Insurers

The authors of this article have spotlighted an emerging issue regarding employer’s liability coverage and asbestos cases in Pennsylvania and Illinois. Since plaintiffs can now bring suit against an employer outside of the exclusivity of Workers Compensation, the relatively low cost Employer’s Liability coverage may see a significant increase in claims and the amounts of those claims. It is certainly something that liability adjusters need to be aware of when investigating such losses.
Insurance Law Update
Asbestos Suits Against Employers Present New Risk for Employer’s Liability Insurers

Two asbestos hotbed jurisdictions, Pennsylvania and Illinois, have recently opened the door to long-tail occupational disease claims against employers in the tort system.  These decisions held that the exclusivity provisions of the applicable state workers’ compensation acts do not prohibit employees diagnosed with occupational diseases long after their retirement from suing their former employers in the tort system alongside the traditional panoply of asbestos defendants.  Employers and their employer’s liability insurers should be aware of this new risk and the issues it may present going forward.

In Pennsylvania – as in almost any other state – the Workers’ Compensation Act is and has been the exclusive means for an employee to recover from his or her employer for workplace-related injuries.  Certain enumerated “occupational diseases,” such as asbestosis, are included within the act’s ambit provided that they occur “within three hundred weeks after the last date of employment . . .” 77 P.S. § 411(2).  This 300-week provision had been interpreted as a statute of limitations and/or repose, closing the door on claimants’ recovery from employers when a latent disease manifests after 300 weeks.  Therefore, employees could not sue their employers in the tort system because of the workers’ compensation exclusivity provision, nor could they pursue workers’ compensation benefits because of the statute of repose. 

The Supreme Court of Pennsylvania abrogated this long-standing interpretation in Tooey v. AK Steel Corp., 81 A.3d 85 (Pa. 2013).  The court held that because the occupational disease claims manifesting outside the 300-week period are not covered by the act, the act’s exclusivity provision does not apply, and employees are free to sue their former employers in tort.  Similarly, in Illinois, the Workers’ Compensation Act and Workers’ Occupational Diseases Act contain exclusivity provisions that bar employees’ direct tort actions against employers for workplace injuries.  Under those statutes, an employee must file claims within three and 25 years, respectively. 

In Folta v. Ferro Engineering, (Ill. App. Ct. 1st Dist. June 27, 2014), an Illinois intermediate appellate court held that the Foltas could maintain a tort claim against James Folta’s former employer because he first discovered his asbestos-related injury outside of the acts’ statutes of repose.  Unlike Pennsylvania, where a legislative amendment to the workers’ compensation statute appears to be the only “fix,” there remains a possibility that Folta is reversed on appeal or that the Illinois Supreme Court overrules Folta in another case.  The defendant in Folta filed a petition for leave to appeal, which remains pending.

While the traditional asbestos products and premises defendants seek coverage from their historical general liability insurers, commercial general liability policies are unlikely to provide coverage to employer defendants because of the policies’ employer’s liability exclusions.  Instead, employers may look to their workers’ compensation/employer’s liability policies.  Employer’s liability coverage exists “to ‘fill the gaps’ between workers’ compensation coverage and an employers’ general liability policy… to protect the insure[d] from tort liability for injuries to employees who do not come under the exclusive remedy provisions of workers’ compensation.”  See Erie Ins. Prop. & Cas. Co. v. Stage Show Pizza, JTS, Inc., 210 W. Va. 63, 68, 553 S.E.2d 257, 262 (2001).  Tooeyand Folta have created a new “gap,” and that gap may widen into a chasm, as Philadelphia’s The Legal Intelligencerreported on June 3 that courts are “universally” accepting plaintiffs’ attempts to join employers in pending mesothelioma cases, and that virtually every new filing names employers as defendants.

Employer’s liability coverage is fundamentally different and much more limited than general liability coverage.  Because this coverage was offered to fill the narrow “gap” between general liability and workers’ compensation coverage, it was offered inexpensively.  As a result, employer’s liability coverage often includes high deductibles (or loss reimbursement provisions) and low aggregate limits.  Some employer’s liability coverage forms include time limitations, limiting coverage to claims filed against the employer within three or five years of the policy’s expiration date.  Further, most employer’s liability coverage contains specific trigger language, limiting coverage to those policies in effect only on the last date of the worker’s exposure to hazardous conditions at the workplace.  Therefore, the “continuous trigger” applicable to general liability policies is unlikely to apply to employer’s liability insurers.  Employers risk only being able to access a single policy year that is subject to a high deductible and low aggregate limit (with no excess coverage available). 

It remains to be seen whether the decisions in Pennsylvania and Illinois represent an emerging risk that may spread to other jurisdictions, or if the legislatures of both states will react swiftly to amend their respective states’ laws.  For now, however, employers and their employer’s liability insurers should be prepared to address these potential newfound liabilities.

Reprinted from:
Copyright © 2014 Gordon & Rees LLP
Our address is 275 Battery Street, Suite 2000, San Francisco, CA 94111, United States
*The posting of this article is for informational purposes only, as a courtesy to our reading audience. Provencher & Company does not own, has in no way been compensated for the sharing of this information, and content  of said article belongs to that of the originating author. The use of or enrollment in any classes, seminars, training, etc. in no way constitutes or implies any endorsement of the provider of said programs. Provencher & Company shares no financial obligation to attendee or organizer.

They Had Another Thing Coming….

Happy  200th  Anniversary 

of the Star Spangled Banner!

Following the Battle of North Point, British troops marched to Baltimore, an economic, shipbuilding hub that was the center of privateer activities against British shipping. The British, expecting to easily disperse the 250 man militia they had encountered at North Point, were shocked to encounter over 12,000 well-armed Americans  in prepared positions on the outskirts of Baltimore. 

What Happen to Major General Robert Ross?

Happy  200th  Anniversary 

of the 

Star Spangled Banner!


The British general who burned Washington, Major General Robert Ross, was himself killed by two 14-year old sharpshooters with the 3rd Maryland militia Brigade at North Point as he led troops against Baltimore. Sadly, the two boys themselves did not survive the battle, but were immortalized in the Battle Monument in Baltimore

Provencher & Company Launches New Website & Social Media

Welcome to Provencher & Company

Provencher & Company is pleased to announce the launch of their new website, designed with a fresh new look and user-friendly navigation, updated with the latest information about our company and the new services we offer, which include:

· General Liability Claims
· Construction Defect
· Slip & Fall
· Product Defect
· Forensic Accounting, CPA
· Business Interruption (first & third party)
· Fidelity & Bond
· Employee Dishonesty
· Litigation Support
· Appraisal & Umpire

Check out the built-in interactive map.  Our clients have been asking for an on-line interactive map showing where our adjusters are located — ask and you shall receive!  You can click on a dot and map that adjuster to your loss.  Of course we never intended for this to replace speaking with someone live in our Claim   Center.  If you don’t see a dot close enough to your loss, call our     National Claim Center to see if we can arrange for a waiver of some travel time and mileage, based on size of loss.  You can also zoom in on a   specific state to see more clearly the exact location of the resident adjuster.
Did someone say Social Media???  Yes, Provencher & Company has jumped in with both feet.  We are now on LinkedIn, Facebook, Twitter, Pinterest, and we maintain a Blog. Follow us via your favorite social media site by hitting Like or Follow on our company page.  We try to keep everyone current with industry specific information; check out our series on Raiders of the Lost Profits.  After a major storm, let us be your eyes and ears on the ground.  We’ll be posting photos to show you firsthand how wide spread the damage really is; don’t rely on the sensationalism of the media!  Have a new interest category you would like us to include, contact  Julie Rock-Chatellier.  Julie is our Social Media Manager. 

We hope you will enjoy browsing our new site, finding more options and information each time, and it will be yet another tool for strengthening our business relationship.  Be sure to check out the video message from
Jerry Provencher, CEO/Executive General Adjuster, located at the bottom of our Homepage.
For more information, please feel free to reach out directly to Jim Abbott, VP Business Development &  Client Relations. 

Equal Opportunity Arsonists

Happy  200th  Anniversary 

of the 

Star Spangled Banner

Americans were equal opportunity arsonists: a year before British forces burned Washington D.C., Americans  sacked and burned York (present-day Toronto), the capital of Upper Canada. After an ammunition explosion at a garrison killed 300 Americans, irate American soldiers responded by burning York’s provincial parliament and other public buildings. A British imperial lion looted by the Americans is still possessed by the U.S. Naval Academy.


Attendees will come away with a full understanding of the risks, exposures, development of claim activity and trends in the areas specific to Data and Network Security, Privacy & Social Media, and the types of cases that result from such. The distinguished panel of presenters will discuss the essential cyber liability topics to ensure you have the most comprehensive and up-to-the-minute information in an ever changing environment.

Register at
Cost: $99 Fellows/$399 Members
CE and CLE Pending

Keynote Speaker

  • Thomas Finan, Senior Cybersecurity Strategist and Counsel
    U.S. Department of Homeland Security

Summit Speakers

    Event Sponsors

  • Austin Berglas, Assistant Special Agent in Charge; Cyber Branch
  • Thomas Kang, Direct of Privacy Services
  • Joshua Ladeau, Underwriter
    Allied World Assurance Company, Ltd.
  • Paul Nikhinson, Breach Response Manager
  • Katherine Keefe, Head of Breach Response Services
  • Antonio Trotta, Senior Claim Counsel
    CNA Insurance
  • Brad Boucher, Delivery Management Lead
    McGraw Hill Financial
  • John Wurzler, President
    OneBeacon Technology Insurance
  • Ziad Kubursi, SVP & Head of M&PL Division
    Philadelphia Insurance Companies
  • Scott Umstot, Broker
    RT Specialty
  • Peter Foster, Sr VP Network Security & Privacy, Media, Technology
  • Jeremy Gittler, Assistant Vice President, Claims Manager
    XL Group
  • Michael Weil, Director – National Computer & Cyber Forensics Leader
  • Peter Garza, Computer Forensics Consultant
    DTI Global
  • Ty Sagalow, President
    Innovation Insurance Group, LLC
  • Tim Ryan, Director – Cyber Investigatons
  • Mark Greisiger, President
  • Rocco Grillo, Managing Director
  • Craig Hoffman, Attorney
    Baker & Hostetler LLP
  • Theodore Kobus, Attorney
    Baker & Hostetler LLP
  • John F Mullen, Attorney
    Lewis Brisbois Bisgaard & Smith LLP
  • Stuart Panensky, Attorney
    Traub Lieberman Straus & Shrewsberry LLP
  • Dianna McCarthy, Attorney
    Winget, Spadafora & Schwartzberg, LLP

*This posting is for informational purposes only, as a courtesy to our reading audience. Provencher & Company has in no way been compensated for the sharing of this information. The use of or enrollment in any classes, seminars, training, etc. in no way constitutes or implies any endorsement of the provider of said programs. Provencher & Company shares no financial obligation to attendee or organizer.

Did The Star Spangled Banner Originate with High Insurance Rates?

During the War of 1812, British Navy and commercial shipping were not seriously dented by American privateers, but privateers did take their toll on the cost of doing business. Alarmed by presence of American privateers and ships with letters-of-marque operating even in the British home waters, insurance companies jacked up rates. British shipowners and insurance companies suffered heavy losses, and British vessels paid high insurance rates just to cross the Irish Channel after American privateers began operating in British waters. This led wealthy merchants to complain loudly to Westminster demanding they to do something about the problem. 
This may have led to the demise of Admiral Sir John Borlase Warren’s career; the British Naval leader in the West Atlantic theater complained about how privateers with their speed and mischief had made his job all but impossible. Finding his job impossible got him sacked after his final demand for more help against the privateers. This may explain why his replacement, Vice Admiral Sir Alexander Cochrane chose to assault Baltimore. The city was the privateering capital of America, dubbed “a nest of pirates” by the British, perhaps setting up that memorable confrontation that launched the American anthem.

About the Author:

CEO/Executive General Adjuster
Provencher & Company
Professional Claim Services

So, you think you know Fire Insurance?

So, you think you know Fire Insurance?


At the turn of the Last Century, the best minds in Fire Insurance were directed to the riveting  issue of apportionment of losses under non-concurrent policies. As the respected W. N. Bament, General Adjuster of the Home Insurance Company wrote in 1922: “ It has commanded the attention on the fire insurance business for nearly a century, and although many rules have been devised, the prospect of discovering the philosopher’s stone is a remote as ever. “ 


In the name of fame, glory and a gift card, which of the following was 
NOT an accepted method of apportionment?
The Reading Rule
The Albany Rule
Gradual  Reduction Rule
The Modified Reading Rule
The Limited Inability Rule
The Modified Finn Rule
The Kottabos Rule
The Continuity Error
The Rice Rule
The Giesse Rule
The Morristown Rule

Submit your answer via LinkedIn, Twitter or Facebook comment and we will do a random drawing of the correct answers to determine the winner of a gift card courtesy of Provencher & Company. Drawing will be held September 30, 2014.

Jerry Provencher
CEO/Executive General Adjuster

Provencher & Company
Professional Claim Services

 *Winning recipient must agree to have their name publicly announced on social media in order to receive the prize.*