Opinion ID: 2509803
Heading Depth: 2
Heading Rank: 3

Heading: Century Indemnity

Text: In Century Indemnity, we accepted the following certified question: Does a standard commercial general liability insurance policy that explicitly provides coverage only for property damage occurring during the policy period provide coverage for continuing damage that begins during the policy period? 348 S.C. at 561, 561 S.E.2d at 356. In Century Indemnity, the policyholder purchased coverage from December 7, 1989, to December 7, 1990. The parties stipulated that moisture began to cause property damage prior to the end of the policy period, and that the damage was continuous since that time. Id. at 562, 561 S.E.2d at 356. The CGL policy at issue was identical in all relevant respects to the policies in this case. Id. at 563, 561 S.E.2d at 357. We reasoned: The issue is whether the policy should cover (1) only the amount of property damage that occurred during the policy period, i.e., between December 7, 1989, and December 7, 1990; or (2) all sums Insured becomes legally obligated to pay if property damage occurs during the policy period. We believe this issue can be resolved solely by reference to Joe Harden Builders, Inc. v. Aetna Cas. & Sur. Co., 326 S.C. 231, 486 S.E.2d 89 (1997). In Joe Harden, the Court adopted a modified continuous trigger theory for determining when coverage is triggered under a standard occurrence policy. Under this theory, coverage is triggered whenever the damage can be shown in fact to have first occurred, even if it is before the damage became apparent, and the policy in effect at the time of the injury-in-fact covers all the ensuing damages. Id. at 236, 486 S.E.2d at 91. Coverage is also triggered under every policy applicable thereafter. Because the policy at issue here contains substantially the same language as the policy at issue in Joe Harden, the modified continuous trigger theory applies in the instant case. As a result, the insurance policy provides coverage for property damage that occurred during the policy period and for any continuing damage. Id. at 564, 561 S.E.2d at 357-58 (emphasis in original). This analysis fundamentally misinterpreted Joe Harden and is profoundly at odds with the insurance contract. The Joe Harden language relied upon in Century Indemnity was taken from the description of theory four, treating theory four as if it was the holding in Joe Harden. The actual holding in Joe Harden, adopting theory three and then modifying it using the injury-in-fact trigger from theory four, was that coverage is triggered at the time of an injury-in-fact and continuously thereafter to allow coverage under all policies in effect from the time of injury-in-fact during the progressive damage. 326 S.C. at 236, 486 S.E.2d at 91 (emphasis added). The fundamental difference is this: while the theory quoted in Century Indemnity would make a single policy responsible for full indemnity, the modified continuous trigger theory adopted in Joe Harden makes multiple policies responsible. The error in Century Indemnity is further evident in its statement that property damage relates back in time to the time of the occurrence, that is, when the first injury occurred to the property. 348 S.C. at 563, 561 S.E.2d at 357 (emphasis added). Again, a first injury can only occur once. Thus, Century Indemnity would collapse all property damage into a single policy period. This would leave no logical basis for finding that later policies were also triggered. Joe Harden, on the other hand, expressly contemplated that property damage would span multiple policy periods, triggering coverage under each policy. In sum, the actual holding in Joe Harden gave no guidance as to how much coverage would be provided by each triggered policy. Because Century Indemnity relied on a single trigger theory, rather than on the modified continuous trigger theory adopted in Joe Harden, the Century Indemnity opinion gave short shrift to this complex issue. For this reason, we overrule Century Indemnity and confront the issue anew. We turn now to an analysis of the two theories regarding the scope of coverage advocated by the parties in this case.