"Trigger" is a term of art meaning the event which activates coverage under
the policy.1 Courts often look to trigger theories
when the insured's burden to prove coverage under its policy seems insurmountable
due to the difficulty in determining when the underlying injury or damage actually
There are four generally accepted trigger of coverage theories2:
- Continuous trigger
- Injury in fact
These are discussed below.
Exposure Coverage Trigger Theory
The exposure theory has primarily been applied in asbestos bodily injury
cases. See e.g.,
Insurance Co. of N. Am. v. Forty-Eight Insulations, Inc., 633 F.2d 1212
(6th Cir. 1980). The Forty-Eight Insulations
court explained that coverage is triggered under the exposure theory when the
first injury-causing conditions occur; there, upon the first inhalation of asbestos
Manifestation Coverage Trigger Theory
The manifestation, or discovery, trigger activates coverage under the policy
in place when the personal injury or property damage becomes known, or is discovered
by, the property owner or victim. Even when courts apply the manifestation theory,
they do so without the consistency one would expect. Some courts find the policy
is triggered when the damage is actually discovered while others trigger the
policy in place when the damage could or should have been discovered.4
Continuous Coverage Trigger Theory
The continuous trigger has also been referred to as the multiple trigger
or triple trigger. This trigger originated in asbestosis cases where bodily
injury progresses and becomes more serious over time.5
The court in Keene Corp. v. Insurance Co. of N. Am.,
667 F.2d 1034 (D.C. Cir. 1981), illustrated the origin of the multiple trigger:
In sum, the allocation of rights and obligations established by the insurance
policies would be undermined if either the exposure to asbestos or the manifestation
of asbestos-related disease were the sole trigger of coverage. We conclude,
therefore, that inhalation exposure, exposure in residence, and manifestation
all trigger coverage under the policies. We interpret "bodily injury" to
mean any part of the single injurious process that asbestos-related diseases
Keene at 1047.
Owens-Illinois, Inc. v. United Ins. Co., 650
A.2d 974 (N.J. 1994), applied a continuous trigger to "the small percentage
of [the insured's] asbestos related expenditures" on property damage claims.
In the primarily bodily injury case, the court explained that here, where none
of the parties suggested the process was anything but continuous, "claims of
asbestos-related property damage from installation through discovery or remediation
(the injurious process) trigger the policies on the risk throughout that period."
The court refused to address when "the injurious process" ends.6
Injury-in-fact Coverage Trigger Theory
When applying an injury-in-fact, or actual injury trigger, coverage under
a general liability policy is triggered when the personal injury or property
damage underlying the claim actually occurs. GenCorp.,
supra, held that the appropriate trigger
for claims arising out of the disposal of hazardous waste was:
a continuous trigger employing injury-in-fact as the initial triggering
event is the applicable theory in this case if GenCorp can substantiate
its claim that the injuries ... were continuing in nature. In the absence
of such a showing, injury-in-fact will be the governing trigger. In addition,
since there is no indication that the initial point of injury in this case
is difficult to ascertain—GenCorp's expert has even opined on the matter—it
appears that injury-in-fact rather than exposure should be the event that
is deemed to trigger continuous coverage. That is, depending on the evidence
presented at trial, coverage will be triggered for the periods between the
first point of injury-in-fact and manifestation.
GenCorp. at 748.
Thus, in accord with the policy language, coverage is triggered when the
property damage actually occurs, and, if the trier of fact determines that the
injury is in fact continuous and progressive, the continuous trigger will apply.7
Commentators and courts alike have noted that the injury-in-fact approach
often looks identical to the continuous trigger theory. As the
Wolverine World Wide, Inc. v. Liberty Mut. Ins. Co.,
2007 WL 705981 (Mich. App. 2007), court explained:
[t]his is likely because the concept of "injury in fact" is
flexible. The fact-finder can determine that injury occurred at any number of
points, from initial exposure through manifestation. Further, in continuous
damages cases, injury may occur repeatedly through numerous consecutive policy
Wolverine at 3.
Don's Building Supply
Importantly, application of a particular trigger theory depends upon a factual
showing of the nature of the damage that occurred. In
Don's Bldg. Supply, the insured, Don's, sold
and distributed exterior insulation and finish systems (EIFS) which were installed
on various homes between December 1, 1993, and December 1, 1996. During construction,
Don's was insured by three consecutive general liability policies issued by
OneBeacon. Various homeowners filed suit against Don's from 2003 to 2005, alleging
that the EIFS was defective and not weather-tight, thus allowing moisture to
seep into wall cavities behind the siding and causing wood rot and other damages.
The homeowners argued that the ongoing moisture exposure was damaging the
homes and the damage "'actually began to occur on the occasion of the first
penetration of moisture behind'" the EIFS, which they say was "'within 6 months
to 1 year after its application.'" Don's Bldg. Supply
at 1. The homeowners argued that the damage to the homes was hidden from view
and "not discoverable or readily apparent to someone looking at that surface
until after the policy period ended." Id.
OneBeacon initially provided a defense and sought a declaratory judgment
determining that there is no duty to defend until the damage becomes identifiable
[i.e., manifests]. The trial court agreed, Don's appealed and the Fifth Circuit
Court of Appeals certified two questions to the Supreme Court of Texas. The
first asked what the proper rule is under Texas law "for determining the time
at which property damage occurs for purposes of an occurrence-based commercial
general liability insurance policy" and the second asked whether, after choosing
and applying the appropriate trigger, the specific underlying pleadings triggered
a duty to defend when:
the pleadings allege that actual damage was continuing and
progressing during the policy period, but remained undiscoverable and not readily
apparent for purposes of the discovery rule until after the policy period ended
because the internal damage was hidden from view by an undamaged exterior surface.
Don's Bldg. Supply at 1 and 5.
To determine the appropriate trigger, in accordance with the Texas rules
of interpretation, the court first looked at the policy language.8
Like all standard commercial general liability (CGL) insuring agreements, the
OneBeacon policies at issue provided coverage for "property damage"9
which occurs during the policy period and is caused by an "occurrence."10
Therefore, the court held that "property damage under this policy occurred when
actual physical damage to the property occurred." Don's
Bldg. Supply at 3. Here, "property damage occurred when a home that is
the subject of an underlying suit suffered wood rot or other physical damage."
The Supreme Court of Texas explicitly rejected the application of a manifestation
trigger because "[t]he date that the physical damage is or could have been discovered
is irrelevant under the policy." Id at 4.11
The CGL policy "asks when damage happened, not whether it was manifest, patent,
visible, apparent, obvious, perceptible, discovered, discoverable, capable of
detection, or anything similar. Occurred means when damage occurred, not when
discovery occurred." Don's Bldg. Supply at 4.
To conclude otherwise in effect transforms "the typically more expensive occurrence-based
policy into a cheaper claims-made policy, a form of coverage specifically designed
to limit the insurer's risk by restricting coverage to claims made during the
policy period without regard to the timing of the damage or injury."
Towns v. Northern Sec. Ins. Co., 2008 WL 2941568,
¶29 (Vt. 2008).
In further rejecting the manifestation trigger, the Supreme Court of Texas
distinguished those decisions which confuse the timing of the negligent conduct
with the timing of the damage. A prime example of a case getting this concept
confused is Auto Owners Ins. Co. v. Travelers Cas. &
Surety Co., 227 F. Supp. 2d 1248 (M.D. Fla. 2002). The
Don's Bldg. Supply court explained that these
cases "appear to use a form of the verb 'manifests' merely as a synonym for
'results in' or 'leads to,' rather than drawing a distinction between the actual
occurrence of damage and the later discovery or obviousness of damage."
Don's Bldg. Supply at 3.12
These cases are often cited in support of a manifestation trigger, when the
cases really only address the concept that the timing of the negligent conduct
which caused the injury or damage is not what triggers coverage under occurrence
policies, but rather "the sustaining of actual damage by the complaining party."
Trizec at 812.13
The Supreme Court of Texas also rejected the exposure trigger for most of
the same reasons it identified when rejecting the manifestation trigger: neither
is supported by the policy language. The court explained that the "policy provides
coverage if the 'property damage' occurs during the policy period.' The policy
does not state that coverage is available if property is, during the policy
period, exposed to a process, event, or substance that later results in bodily
injury or physical injury to tangible property." Don's
Bldg. Supply at 4. Similarly, the Second Circuit Court of Appeal explained
Injury cannot be read as the equivalent of exposure, because
the policy contemplates injury caused by exposure; since a cause normally precedes
its effect, it is plain that an injury could occur during the policy period
although the exposure that caused it preceded that period.
American Home Prods. at 764.
After explaining why the alternative trigger theories are incompatible with
the standard general liability policy language, the Supreme Court of Texas belittles
all of the nonpolicy-related reasons for applying anything other than an injury-in-fact
trigger in the following comment:
Pinpointing the moment of injury retrospectively is sometimes difficult,
but we cannot exalt ease of proof or administrative convenience over faithfulness
to the policy language; our confined task is to review the contract, not
revise it. Our prevailing concern is not one of policy but of law, and we
must honor the parties' chosen language-covering third-party claims if damage
to the claimant's property occurred during the policy period.
Don's Bldg. Supply at 4.
As Don's Bldg. Supply makes clear, an injury-in-fact
or actual injury trigger is the only trigger theory supported by the language
of the standard CGL policy. This is "the only interpretation of the clause that
neither departs from the policies' language nor imports expansions of or limitations
on the words that do not ordinarily exist." American
Home Prods. Corp. v. Liberty Mut. Ins. Co., 748 F.2d 760, 765 (2nd Cir.
Rebecca C. Appelbaum is a senior associate
practicing in the area of third-party coverage at Butler Pappas Weihmuller Katz
1See Hoechst Celanese Corp. v. Certain Underwriters at Lloyd's
of London, 673 A.2d 164, 166, n.2 (Del. 1996).
Auto Owners Ins. Co. v. Travelers Casualty & Surety
Co., 227 F. Supp. 2d 1248, 1266 (M.D. Fla. 2002) (citing In re Celotex Corp., 196 B.R. 973, 1000 n.187
(Bankr. M.D. Fla. 1996); GenCorp, Inc. v. AIU Ins. Co.,
104 F. Supp. 2d 740, 745 (N.D. Ohio 2000). See
also Spaulding Composites Co., Inc. v. Aetna
Cas. & Sur. Co., 819 A. 2d 410, 415 (N.J. 2003).
3See also Norfolk Southern Corp. v. California Union Ins. Co.,
859 So. 2d 167, 191 and 191 n.50 (La. Ct. App. 2003) (adopting the exposure
trigger in asbestosis and long latency disease cases).
4Don's Bldg. Supply, Inc.
v. OneBeacon Ins. Co., 2008 WL 3991187, 3 (Tex. 2008) (citing Dorchester Dev. Corp. v. Safeco Ins. Co., 737
S.W.2d 380 (Tex. App. 1987)).
5GenCorp, Inc. v. AIU
Ins. Co., 104 F. Supp. 2d 740, 748 (N.D. Ohio 2000).
6See also Harford Cty. v. Harford Mut. Ins. Co., 610 A.2d
286, 294-5 (Md. 1992) (holding, in the environmental pollution context, that
"'manifestation' is not the sole trigger of coverage in environmental pollution
cases ... coverage under the policies may be triggered during the policy period
at a time earlier than the discovery or manifestation of the damage.")
7See GenCorp. at 748 (citing Armstrong World Ind., Inc. v. Aetna Cas. & Sur. Co.,
52 Cal. Rptr. 2nd 690, 736 (Cal. App. 1996) (determining the appropriate trigger
in the context of asbestos-containing building material claims)).
8Under Texas law, insurance policies are construed
like contracts and unambiguous language must be enforced as written.
Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936
(Tex. 1984). Any ambiguity is resolved in favor of coverage, policy language
is to be given its plain, ordinary meaning and the provisions are to be construed
as a whole. Don's Building Supply at 2 (internal
citations omitted). Most other states apply substantially similar rules of interpretation
to insurance policies. See e.g.,
Auto Owners Ins. Co. v. Anderson, 756 So. 2d
29 (Fla. 2000) and Olmstead v. Lumbermens Mut. Ins.
Co., 259 N.E.2d 153 (Ohio 1970).
9"Property damage" is defined as physical injury
to tangible property, including all resulting loss of use of that property ...
or loss of use of tangible property that is not physically injured.
10"Occurrence" is defined as an accident, including
continuous or repeated exposure to substantially the same general harmful conditions.
11See also Trizec Prop., Inc. v. Biltmore Constr. Co. Inc.,
767 F.2d 810, 813, n.6 (11th Cir. 1985) (determining that the manifestation
theory "is incompatible with the language of the policy and holding that the
damage itself which must occur during the policy period for coverage to be effective)
and American Home Prods. Corp. v. Liberty Mut. Ins.
Co., 748 F.2d 760 (2nd Cir. 1984).
12Unlike the cases described here,
Auto Owners actually gets it wrong. Even after
reviewing Trizec and Travelers Ins. Co. v. C.J. Gayfer's
& Co., 366 So. 2d 1199 (Fla. App. 1979), and recognizing that the it
is not the timing of the negligent conduct but rather the sometimes subsequent
sustaining of actual injury or damage (i.e., the manifestation of the result
of the negligent act), the court inexplicably holds that the appropriate trigger
of coverage in Florida is manifestation rather than actual injury.
13See also Millers Mut. Fire Ins. Co. of Tex. v. Ed Bailey, Inc.,
647 P.2d 1249, 1253 (Idaho 1982); Dow Chem. Co. v. Assoc.
Indem. Corp., 724 F. Supp. 474 (E.D. Mich. 1989) (reviewing cases rejecting
antecedent negligence as capable of triggering coverage).