In all of those cases, issues that would create an absolute bar to coverage in most other jurisdictions were not a problem for our clients. For example, in one case, the policyholder provided notice to the carrier more than a decade after it had been notified of an environmental problem by the government. In another case, the policyholder never provided notice to the carriers in advance of filing its coverage action and engaged in on-site waste disposal in unlined settling ponds for a long period of the site's operation. Insurers facing the application of New Jersey law want to settle early and avoid unnecessary transaction costs. After receiving the necessary site remediation and cost information, insurers are prepared to pay the claims.
Allocation is the one issue that continues to be problematic.
The key issue in New Jersey is not whether coverage exists, but rather, how much coverage is available. Under New Jersey's continuous trigger theory, allo-cation among multiple insurers is several, not joint, and is calculated based on total limits, not pro rata or by primary policy limits. Thus, an insurer's allocated share will depend on the number of years on the risk and the level of its limits in relation to the policyholder's total available limits for the loss. Factoring in issues such as missing policies, insolvent insurers, and large policy deductibles or self insured retentions often serves to make the allocation process complex, but does not create an insurmountable barrier to settlement. For example, the property owner may pursue coverage itself under these policies to fund an escrow account to cover future remediation obligations.