English Insurance Law
50. Durham v. BAI (Run Off) Ltd
Employers’ liability insurance (EL)—construction of policy wording—“injury or disease sustained” and “disease contracted”—mesothelioma
By group action, various claimants (former employees, their family dependants, solvent insured employers and one insurer responsible for run-off cover on cessation of the business of another) sought declaratory relief as to their respective entitlements to compensation from those EL insurers providing insurance cover during periods commencing in or about 1940 and ending in or about 1992. Although the precise wording of each policy differed, there was some commonality about the operative wording needed in order to trigger insurers’ liability in the requirement for injury or disease to be “sustained” during a policy period; for some policies this was coupled with additional wording relating to “disease contracted” during such periods. The subject policy wordings contrasted with the tariff wording then in use, which expressly made causation during a period of insurance the temporal trigger for insurers’ liability to indemnify.
At first instance Burton J held that policy wording providing cover for “injury sustained”, and “disease contracted” bore the same meaning: both phrases connoted the time of the cause of the injury or disease as the relevant trigger date for insurance cover. The policies that were required to meet the claims were those in being at the time of the causation of the disease, this being the unlawful exposure to the noxious dust. The insurers appealed, asserting that the critical dates occurred at much later times, when they were no longer on risk, being the dates of the onset of the disease by malignancy suffered by the particular individual employees and former employees.
The central issue was thus whether it was the time of the occurrence of the cause of the disease (in this case the inhalation of asbestos dust) which serves to identify the particular policy responsible to meet the claim or whether it is the occurrence of the onset of the disease (the onset of malignancy) which serves to identify a relevant policy, even though in the latter case the date may be many years after the inhalation and at a time when the claimant is no longer an employee.
On appeal the claimants contended that the policy wordings all connoted causation as the temporal requirement for indemnity, as the judge had so found. So that policies for the