This article was published in the San Diego Chapter of Risk and Insurance Management Society (RIMS) Newsletter in February 2007.
In 1990 California joined the United States as plaintiff in a toxic tort action against several chemical companies who released hazardous substances into the San Pedro Channel from 1947 to 1990 (43 years). Defendant chemical companies counterclaimed against California, claiming California was responsible for the contamination and should be held liable. For the 43-year period in question California was only insured for one year via a policy from Pacific Indemnity. Pacific Indemnity claimed its duty to defend California was proportional to its one year of coverage during the 43 years. So it should only be responsible for about 2% of the defense expenses. Is there full coverage for California’s defense?
Yes. California law requires an insurer provide an entire defense if any part of a claim is potentially covered.
See California v. Pacific Indemnity (1998) 63 Cal.App.4th 1535.