Document 2jYjve8km3XJOg4nzMQedRbNL

FILE NAME Insurance Industry INS DATE 1988 DOC INS070 DOCUMENT DESCRIPTION Legal - Quebec Court of Appeals Case Mealy's Litigation Reports Asbestos - Canadian Appellate Court Reactivates Manville Policies MEALEY'S LITIGATION REPORTS ASBESTOS : The ruling of Continental would limits rather than Judge Brown referred to by Fibreboard held in part that have to provide per person coverage without aggregate providing a total of only 2 million for all claims The judge also rejected the application of the pollution exclusion and held that Fibreboard could obtain complete coverage from a carrier despite other insurance clauses Fibreboard explained that it needed to come up with the Structured Settlement Program because in light of the mounting claims against it the alternative could be bankruptcy Instead the company proposed a plan to settle claims but defer full payment until insurance coverage can be obtained CANADIAN APPELLATE COURT REACTIVATES MANVILLE POLICIES MONTREAL -- A Canadian appellate court overturned on Oct. 25 a lower court's ruling which had voided $ million of Canadian Manville Co. Ltd.'s asbestos personal period 1970-1975 Canadian injury and property Manville Co. damage coverage for the Ltd. V. The Canadian Indemnity Co. Nos 500-09-000780-858 500-05-013130-792 Canada Province of Quebec Dist of Montreal Ct of App Text in Section B Disagreeing with the Montreal Superior Court the Quebec Court of Appeal said Canadian Indemnity Co. could not rescind Canadian Manville.'s failure to disclose certain coverage asbestos due to disease reports The asbestos the blindness appellate court said publicly known at the the health hazards time the insurance was as ociated approved with and of the carrier's underwriters does not excuse it from coverage Canadian Indemnity moved to have Canadian JM failed to tell the carrier associated with reports of Dr. its asbestos products Irving Selikoff of the New York its policies nullified in 1979 saying about the high frequency of disease Specifically the carrier cited the Mount Sinai School of Medicine in In issuing its ruling back in 1985 the Montreal Superior Court said producer knew about these studies and that they were material to risk The court also held that although Canadian JM was negligent in making inquiries into asbestos risks it did not have could not be presumed to have known about the risks such knowledge the the not and 1988 MEALEY PUBLICATIONS INC 43 MEALEY'S LITIGATION REPORTS ASBESTOS While Canadian Indemnity's underwriters testified nothing about the asbestos industry the appellate court newspaper reports on asbestos diseases circulated 1970. Some of those even referenced the Selikoff studies that they knew noted that many in Canada before After noting some of these reports the appellate court determined that insurance underwriters ought to have been alerted to the health risks posed by asbestos when Canadian JM's policies were sold The court also noted that the asbestos industry was a prominent one in Quebec and that the health risks were common knowledge within that industry An insurance underwriter may not be presumed to know all of the technical intricacies of all of the trades and industries he insures but surely he ought to know something of a serious health risk that was common knowledge in a major industry and was widely reported in the public media as well the court wrote Seriousness and Frequency Nor was the appellate panel persuaded by counsel for Canadian Indemnity who argued that while asbestos risks may have been commonly known the seriousness of the risk and the frequency of asbestos diseases were not But with all of the published material on asbestos the court said the carrier should have been tipped off to the risk It said any inquiry on the carrier's part would have uncovered the Selikoff studies Writing for the court appellate Judge J. Melvin L. Rothman concluded " I do not believe the insured should be reproached for failing to disclose the kind of detail contained in the Selikoff reports The insured was entitled to presume in my view that the insurer had a basic professional knowledge of the risks of asbestosis and that if more detail was required the underwriters would ask for it e That the risk was assessed by inexperienced or negligent underwriters in this case is not really the issue here That may explain why the underwriters were unaware of the nature or extent of the risk But if the facts them were public and notorious the insurer is presumed to have known however inexperienced or negligent the underwriters were . An insurer cannot repudiate the negligence lack of his own underwriters his obligation experience or under an insurance the involuntary or policy wilful by invoking blindness of The court JM's policies therefore reversed the lower court and reinstated Canadian The attorneys in this case Clarkson Tetrault for Canadian Odette Laberge of Lavery are Graham Nesbitt and Thomas Davis of Manville and J. Vincent O'Donnell and O'Brien for Canadian Indemnity '1988 MEALEY PUBLICATIONS INC 44