Insurance Law

Top Calif. Court OKs 'Stacking' of Policy Limits, State Could Get $60M More for Waste Site Cleanup


In a long-awaited ruling (PDF) that could add another $60 million to the $120 million the state of California previously got from other insurers, the California Supreme Court on Thursday OK’d the “stacking” of liability policy limits for a hazardous waste site cleanup.

“In cases such as this it is impossible to prove precisely what property damage occurred during any specific policy period,” wrote Justice Ming W. Chin in the court’s unanimous insurance coverage opinion concerning the Stringfellow Acid Pits. “The fact that all policies were covering the risk at some point during the property loss is enough to trigger the insurers’ indemnity obligation.”

Having found that the lower courts correctly determined the policies at issue were triggered, the California Supreme Court also upheld a Court of Appeal determination that each insurer could potentially be held responsible for paying up to its full policy limits.

As the supreme court explained, “‘Stacking’ generally refers to the stacking of policy limits across multiple policy periods that were on a particular risk. In other words, ‘Stacking policy limits means that when more than one policy is triggered by an occurrence, each policy can be called upon to respond to the claim up to the full limits of the policy.’ ” (Citation omitted.)

A press release by Anderson Kill & Olick, which was part of the state’s legal team, provides further details.

Hat tip: Los Angeles Times (reg. req.).

Additional coverage:

Insurance Journal (2005): “Insurers Lose in Stringfellow Acid Pits Jury Trial”

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