Insurance company ordered to pay $500M for asbestos claims

In a ruling that could benefit North Carolina residents, the United States Court of Appeals for the Second Circuit ruled that the Travelers Insurance Company was bound by the terms of a written settlement agreement that required it to pay claims for asbestos-related diseases and asbestos-related deaths made against Johns-Manville Corp. The ruling also required Travelers to pay $75 million in terest to the claimants.

Johns-Manville declared bankruptcy in the 1980s as a shield against the growing number of claims against it for asbestos-related diseases and deaths. Prior to declaring bankruptcy, J-M was the largest supplier of asbestos and asbestos-containing products in the United States. Travelers had been J-M’s primary insurer for asbestos-related claims. Many thousands of people, including many in North Carolina, have contracted mesothelioma or asbestos as the result of exposure to asbestos in products manufactured by J-M.

The settlement in question arose out of J-M’s bankruptcy proceedings. Travelers had refused to honor the terms of a settlement agreement reached by J-M’s attorneys and attorneys for claimants, arguing that certain disputed conditions had not been met by the plaintiffs. The appellate court ruled that Travelers did not raise these objections in a timely matter. In addition, the appellate court agreed with the claimant’s argument that Travelers improperly misrepresented J-M’s knowledge of the hazards of asbestos.

The amount of money at stake may mean that Travelers will appeal the decision. In any event, the enforcement of the settlement agreement moves many thousands of persons closer to recovering on their claims for disease and death caused by J-M’s products.

Source: Waterbury Republican American, “Travelers ordered to abide by$500M asbestos pact,” Christie Smythe, July 22, 2014