Travelers lost a $6 million bet on how to count asbestos claims in an Ohio ruling issued February 17.
The Third Appellate District Court of Appeals sided with Copeland Corporation on both major questions in the dispute: which state's law applies to the policies and whether multiple asbestos claims count as one occurrence or many. The decision affects three policies written in the early 1980s, each carrying $1 million per occurrence limits and $3 million aggregate limits.
Travelers had already paid out $3 million and argued it was done. The insurer's position was straightforward: all the asbestos claims stemmed from a single occurrence – Copeland's decision to manufacture and distribute compressors containing asbestos gaskets. Under that interpretation, the policies were exhausted.
The court disagreed. In a decision that could ripple through similar cases, the appeals panel ruled that each person's exposure to asbestos counts as a separate occurrence. That interpretation opens the door to the full $9 million in aggregate coverage across the three policies.
At the heart of the case is Copeland Corporation, an Ohio manufacturer that spent decades making compressors for refrigeration and cooling products. The compressors used gaskets supplied by outside manufacturers, and starting in the early 2000s, lawsuits began piling up from people claiming they got sick from asbestos exposure.
The insurance policies were issued to the Hillman Company, a Pennsylvania conglomerate that owned Copeland as a subsidiary between 1981 and 1985. Copeland was listed as a named insured on the policies, a detail that became crucial to the court's analysis.
The choice of law question mattered enormously because different states take different approaches to asbestos coverage disputes. Travelers pushed for Pennsylvania law, pointing out that the policies were issued to a Pennsylvania company. Copeland countered that Ohio law should control since it operated entirely in Ohio, manufactured the products in Ohio, and paid its share of the premiums from Ohio.
The appeals court found Ohio's connections more substantial. Hillman itself faced no exposure from the asbestos claims and showed no interest in the litigation. Meanwhile, Copeland was a named insured whose entire business operated in Ohio. Travelers even had a representative in Ohio involved in underwriting the policies and assessed Copeland's risk separately based on its Ohio operations.
With Ohio law established as the governing framework, the court turned to how many occurrences there were.
The policy language defined occurrence as "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the stand-point of the insured."
An aggregation clause stated that "all bodily injury, personal injury, property damage and advertising offense arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence."
Travelers argued that the cause of all the injuries was the same: Copeland's manufacturing and distribution of compressors with asbestos-containing gaskets. One cause, one occurrence.
The court rejected this cause test approach. Instead, it adopted the triggering-event theory, following Ohio's First District Court of Appeals in earlier asbestos cases. Under this approach, the triggering event isn't the manufacturer's decision to use asbestos or distribute the products. It's each individual person's exposure to asbestos.
The underlying claims came from people scattered across the United States who were exposed to asbestos in different Copeland products at different job sites and locations, during different time periods, and under different circumstances. Lumping all of that into a single occurrence struck the court as illogical.
The policy language itself supported this reading. The definition of occurrence specifically mentioned "exposure to conditions," and the aggregation clause only bundled claims together when they arose from exposure to "substantially the same general conditions." Different people exposed at different times and places didn't fit that description.
The practical impact is substantial. Under the single-occurrence approach, Copeland would have $3 million in total coverage, already exhausted. Under the multiple-occurrence ruling, Copeland can access up to $3 million per occurrence for each qualifying claim, up to the $9 million aggregate limit.
The case adds to a growing body of Ohio precedent applying the triggering-event theory in asbestos cases. The appeals court cited two earlier First District decisions – Cincinnati Insurance Co. v. ACE INA Holdings and William Powell Co. v. OneBeacon Insurance Co. – that took the same approach.
For insurers, the decision is a reminder that policy language matters and that courts often interpret ambiguities against the insurer. For policyholders facing long-tail asbestos liability, the ruling provides a roadmap for maximizing coverage where policies lack clear aggregation language.
