Opinion ID: 1934281
Heading Depth: 1
Heading Rank: 2

Heading: Insurance Policy Language

Text: C.E. Heath's predecessor, ESLIC, issued excess liability policies to Monsanto for the periods from 1959 to 1965 and from 1967 to 1972. The relevant insuring agreement language is as follows: Underwriters hereby agree, subject to the limitations, terms and conditions hereinafter mentioned, to indemnify the Assured for all sums which the Assured shall be obligated to pay ... for damages, direct or consequential and the expenses, all as more fully defined by the term ultimate net loss on account of ... Property Damage... caused by or arising out of each occurrence. (emphasis added). In addition, the policies define occurrence as: An accident or happening or event or continuous or repeated exposure to conditions which unexpectedly and unintentionally results in personal injury, property damage or advertising liability during the policy period. (emphasis added). The Superior Court concluded that the phrase during the policy period triggers liability under each policy. In addition, the Superior Court concluded that the phrase during the policy period contained in the definition of occurrence also served to limit the all sums language. Monsanto argues that such an interpretation, which assigns a dual purpose to the phrase during the policy period, makes the all sums language superfluous. According to Monsanto, the Superior Court confused the predicate for coverage  damages or injury during the policy period  with an insurance company's responsibility to pay all sums once the coverage in a particular insurance policy has been activated. C.E. Heath argues that, reading the insuring agreement together with the definition of occurrence, it follows that only injury or damage which occurs during the policy period triggers liability under the ESLIC policies. Therefore, according to C.E. Heath, where an injury is found to be continuous in nature and to occur in each of several different policy periods, it is logical to prorate costs by policy period. Otherwise, C.E. Heath submits that insurers will be paying all sums for injury or damage that occurs during policy periods other than their own. C.E. Heath's arguments are joined in by the other insurance carriers in this appeal.