Policy Terms Primary Coverage Excess Insurance Endorsement
Seagrave Fire Apparatus, LLC v. CNA d/b/a Continental Casualty Co. et al, PICS Case No. 17-1147 (C.P. Philadelphia June 28, 2017) Djerassi, J. (8 pages).
The defendant insurer was obligated to provide a defense to plaintiff, a manufacturer of fire engines facing hundreds of firefighter claims of occupational noise-induced hearing loss, where the coverage provided was primary under the general provisions of the applicable policies rather than excess, as the insurer maintained. The court denied the defendant's motion for summary judgment.
Plaintiff, Seagrave Fire Apparatus a fire engine manufacturer was named as a defendant in over 450 occupational noise-induced hearing loss claims. Firefighters claimed they suffered deafness due to the continued exposure to the sounds of the sirens Seagrave installed on fire engines. Seagrave filed this coverage action seeking payment of defense costs by all the insurers who issued policies to the company over more than 50 years. Many of its insurers agreed to share in the costs of Seagrave's defense under reservations of rights. Admiral Insurance Co., which issued Seagrave a policy that became effective from Sept. 8, 2009, through Jun 1, 2011, refused to provide a defense. The company moved for a summary, declaratory judgment that it had no duty to defend or indemnify Seagrave in the underlying suits. Admiral's policy stated that the insurer would provide coverage for bodily injury caused by an "occurrence" and defined occurrence as "an accident, including continuous or repeated exposure to substantially the same general harmful condition." The firefighters alleged that Seagrave was negligent in, inter alia, designing and building firetrucks without adequate sound dampening and in failing to warn firefighters of the risk of exposure to siren noise. They also claimed that such negligence caused their continuous or repeated exposure to the harmful noise of Seagrave's trucks, resulting in deafness. Since the firefighters alleged acts and omissions by Seagrave that were negligent or accidental, such conduct fell within the definition of an "occurrence" under the policies, the court reasoned. Admiral relied on an endorsement stating that its coverage was "excess over all valid and collectible primary, excess and contingent insurance that is available to [Seagrave]" caused by an occurrence that involved continuous or repeated exposure to substantially the same general harmful conditions "beginning prior to and continuing after [Sept. 8, 2009] and ending by or before the end of the policy period [June 1, 2011,]" and when any insurer has a joint and several obligation to defend and/or indemnify Seagrave. Admiral claimed that this endorsement limited its coverage to those firefighters who claimed their exposure began prior to, and continued after, Sept. 8, 2009, but ended by or before June 1, 2011. The court rejected Admiral's reading of the policy, reasoning that in some very limited, inapplicable circumstances, Admiral's policies provided excess insurance coverage to Seagrave. However, when such limited circumstances did not exist, the coverage afforded by the policies was not in excess. Rather, the coverage was primary under the general insurance provisions. Admiral claimed that due to the limited excess coverage provision, all other primary coverage ceased to exist. Yet the insurer could not point to an express statement disclaiming all primary coverage. As such, Admiral was required to contribute to Seagrave's defense.