18) List 3 circumstances that might lead to gaps in an insured's coverage.
a) State how coverage is triggered for each of the following trigger theories:
d) continuous trigger
B) Manifestation: Holds that injury or damage does not happen until the injury or disease becomes apparent, i.e., manifests itself.
Thus the Commercial General Liability policy in place when the 3rd party could have or did become aware of the damage or injury would respond to the claim. Suppose a person has been exposed to asbestos fibers but shows no symptoms of illness immediately. After a number of years, the person develops persistent cough and x-rays show lung damage - the manifestation of the illness from contact with asbestos. The symptoms that impaired the claimant's sense of well-being or the lung damage would be considered manifestations of the illness. The policy in effect when this happened would respond to the claim.
This theory can also apply to property damage liability claims.
Ex: in the winter, road salt contaminates the concrete floor of a parking garage and causes the concrete to deteriorate. Throughout the winter, as cars track salt into the garage, the damage continues. At first the damage is not visible; when the concrete starts to crumble, the Commercial General Liability policy coverage may be triggered.
C) Exposure: Holds that any policy in place during the time that the claimant was exposed to the harmful conditions causing deterioration should respond. Insurers on the risk during the periods in which the injured party was exposed to the substance could be called on to pay the loss. Assume the injured party worked in the harmful environment from 1950 to 1965 and symptoms of the disease manifested within the person in 1992. Policies insuring from 1950 to 1965, during the time of exposure to the injurious substance, would be triggered under this theory.
Consider a property damage example:
Assume that the deterioration to the garage began when the first car tracked salt into the garage and continued with each subsequent car. The claim for the damage would trigger policies in force during the period of exposure(while the garage was operating).
C) Continuous Trigger or Triple Trigger: Identifies 3 events that trigger coverage :
1) during the exposure to the offending product, Ex: the inhalation of asbestos fibers in asbestosis claims;
2) during the latency period when the disease is progressing but there is not necessarily any further exposure to the damaging substance and the symptoms of the disease do not yet exist;
3) when the injury becomes manifest. The argument is that the disease is progressing continuously since the initial exposure and all policies in effect over this period would be activated.
Injury-in-fact theory: Holds that a policy will respond if damage actually happened during the policy period, whether or not anyone was or could have been aware of it, and regardless of when the negligent act or omission took place. All policies in effect during the period an injury happens would be triggered; but not those in effect when a claimant was only exposed to harmful conditions.
Ex: that injury happens as a person inhales or ingests asbestos fibre. Injury or damage not detected at the time of injury will not affect the application of this coverage theory.