Texas Court Could Limit Risk By Defining Exposure Trigger For Long-Tail Claims

The Northern District of Texas recently issued a pivotal decision for long-tail injury cases. It clarified that under Texas law, excess liability coverage for long-tail injury claims can center on an exposure trigger theory.

The court resolved the dispute between measuring potential liability from the exposure as opposed to the injury-in-fact. It prioritized policy language and defined "occurrence" as exposure during the policy period. By adopting the exposure trigger theory based on specific policy language and rejecting a universal rule for these cases, the court limited insurer liability to claims alleging asbestos exposure within that policy period. This ruling also impacts how insurers assess and reserve for latent injuries.