Opinion ID: 1213751
Heading Depth: 1
Heading Rank: 2

Heading: trigger of coverage in third party progressive loss cases

Text: As noted, Admiral moved for summary judgment in the trial court on grounds that it had no duty to defend or indemnify Montrose in the Levin Metals cases because the circumstances which trigger coverage, within the meaning of the coverage clauses in its policies, did not occur during the policy periods, [11] and that it had no duty to defend or indemnify Montrose in the Stringfellow cases because the contamination alleged in those actions was an uninsurable loss-in-progress prior to the effective date of the first policy it issued to Montrose. Having convinced the trial court, but not the Court of Appeal, Admiral seeks to renew these claims. Admiral asserts in its brief on the merits that the fact that the Stringfellow CERCLA action alleges continuing or progressive contamination does not establish there was an occurrence while Admiral's policies were in effect. Admiral submits that all damage was caused by a single occurrence outside (i.e., prior to commencement of) Admiral's policy period, and urges that any determination that continuous or progressive damage or injury occurring during its ensuing policy periods can itself trigger coverage, ignore[s] the policy language and confuse[s] the consequences of the occurrence with the occurrence itself, i.e., the event that `resulted' in damage. 1. Preliminary considerations: distinguishing third party liability insurance from first party property insurance. To properly analyze the trigger of coverage issues presented in this case, it is necessary to first clearly distinguish between third party liability insurance, the type of coverage here at issue, and coverage under a first party property insurance policy, such as the standardized homeowners policy in issue in Prudential-LMI, supra, 51 Cal.3d 674. As we observed in both Garvey, supra, 48 Cal.3d at page 399, footnote 2, and Prudential-LMI, supra, 51 Cal.3d at pages 698-699, a first party insurance policy provides coverage for loss or damage sustained directly by the insured (e.g., life, disability, health, fire, theft and casualty insurance). A third party liability policy, in contrast, provides coverage for liability of the insured to a third party (e.g., a CGL policy, a directors and officers liability policy, or an errors and omissions policy). In the usual first party policy, the insurer promises to pay money to the insured upon the happening of an event, the risk of which has been insured against. In the typical third party liability policy, the carrier assumes a contractual duty to pay judgments the insured becomes legally obligated to pay as damages because of bodily injury or property damage caused by the insured. ( Garvey, supra, 48 Cal.3d at p. 407.) The difference in the nature of the risks insured against under first party property policies and third party liability policies is also reflected in the differing causation analyses that must be undertaken to determine coverage under each type of policy. ( Garvey, supra, 48 Cal.3d at p. 406.) (1) `Property insurance ... is an agreement, a contract, in which the insurer agrees to indemnify the insured in the event that the insured property suffers a covered loss. Coverage, in turn, is commonly provided by reference to causation, e.g., loss caused by ... certain enumerated perils. [¶] The term perils in traditional property insurance parlance refers to fortuitous, active, physical forces such as lightning, wind, and explosion, which bring about the loss.' ( Ibid., quoting Bragg, Concurrent Causation and the Art of Policy Drafting: New Perils for Property Insurers (1985) 20 Forum 385, 386-387.) (2) In contrast, `the cause of loss in the context of a property insurance contract is totally different from that in a liability policy.' ( Garvey, supra, 48 Cal.3d at p. 406, italics in original.) [T]he right to coverage in the third party liability insurance context draws on traditional tort concepts of fault, proximate cause and duty. This liability analysis differs substantially from the coverage analysis in the property insurance context, which draws on the relationship between perils that are either covered or excluded in the contract. In liability insurance, by insuring for personal liability, and agreeing to cover the insured for his own negligence, the insurer agrees to cover the insured for a broader spectrum of risks. ( Id. at p. 407, italics added.) The parties' expectations may also differ depending upon the type of coverage sought. First party property coverage is typically purchased in an amount sufficient to cover the insured's maximum potential loss (e.g., fire insurance typically covers the value of the property insured). Hence, there is no reason for a first party insured to look to more than one policy in the event of loss (the policy in effect at the time of the fire). (See Garvey, supra, 48 Cal.3d at p. 406.) Third party liability coverage differs substantially. As the Court of Appeal below observed, [a]t best, the insured makes an educated guess about its potential exposure to third parties. At worst, the insured's best guess falls far short of the mark. Yet another distinction between the two types of insurance coverage is that third party CGL policies do not impose, as a condition of coverage, a requirement that the damage or injury be discovered at any particular point in time. Instead, they provide coverage for injuries and damage caused by an occurrence, and typically define occurrence as an accident (or sometimes a loss), including a continuous or repeated exposure to conditions, that results in bodily injury or property damage during the policy period. The standardized CGL policy language (like the language in Admiral's policies) will be reviewed in greater detail below. As will be seen, nothing about this language suggests a manifestation or discovery requirement as a prerequisite for triggering coverage. (See, e.g., Trizec Properties v. Biltmore Const. Co. (11th Cir.1985) 767 F.2d 810, 813 [no requirement in standard CGL policy that damages manifest themselves during the policy period].) Another important difference between first and third party policies is that first party insurance policies require the insured to bring any action against the insurer within 12 months after inception of the loss. ( Prudential-LMI, supra, 51 Cal.3d at pp. 682-687.) Before an action is filed under such a policy, there must be a dispute between the insured and insurer. Before there can be a dispute, the insured must (or reasonably should) know it has suffered a loss. ( Id. at pp. 686-687.) By contrast, third party liability policies do not include a 12-month limitations period in which the insured must bring an action against the insurer (although the policies may contain express notification requirements). It is the damaged or injured third party who initiates the action against the insured. If coverage is ultimately established, it is the insurer that in turn must indemnify the insured for all sums which the insured shall become legally obligated to pay. Hence, there is no inception of the loss language in a standard CGL policy, and, as will become apparent, no corollary need to apply the definition of inception of the loss that this court articulated in Prudential-LMI, supra, 51 Cal.3d at pp. 682, 699. (Cf. § 2071 [standard form fire insurance policy].) Unfortunately, some courts have failed to draw these critical distinctions when discussing coverage issues under first and third party insurance policies. In the third party liability insurance context, some reported cases have muddied the waters by seemingly failing to distinguish between disputes arising between an insured and insurer, and actions among several CGL carriers that seek a judicial declaration allocating a loss already paid out to the insured under one or more such policies. In suits between an insured and an insurer to determine coverage, interpretation of the policy language and, in the case of ambiguous policy language, the expectations of the parties, will typically take precedence. The existence of excess or secondary insurance policies, other insurance clauses, or similar policy language decreeing the manner of apportionment of liability under multiple policies may also factor into the coverage analysis. In contrast, where two or more CGL carriers turn to the courts to allocate the cost of indemnity for a paid loss, different contractual and policy considerations may come into play in the effort to apportion such costs among the insurers. The task may require allocation of contribution amongst all insurers on the risk in proportion to their respective policies' liability limits (such as deductibles and ceilings) or the time periods covered under each such policy. Reported cases whose analyses fail to take these distinctions into account, although purporting to clarify or settle an underlying trigger of coverage issue, may shed more darkness than light on the matter. The proper analysis and resolution of a trigger of coverage issue may also depend on whether the CGL policy in issue insures against liability to third parties for bodily injury, property damage, or both. As will be shown, the coverage clauses in Admiral's policies do not distinguish between the nature of the underlying harm (bodily injury or property damage) that triggers the insured's liability coverage. Accordingly, Montrose and Admiral appear to agree that under a plain reading of that unambiguous aspect of the policy language, whatever be the circumstances (or timing of the circumstances) that will potentially trigger liability coverage under the policies, coverage will apply uniformly under such circumstances whether the claims be for bodily injury, or property damage, alleged in the underlying third party lawsuits. Finally, the proper resolution of a trigger of coverage issue in any given case may turn on whether the court is addressing underlying facts involving a single event resulting in immediate injury (e.g., an explosion causing instantaneous bodily injuries and destruction of property), a single event resulting in delayed or progressively deteriorating injury (e.g., a chemical spill), or a continuing event (referred to in CGL policies as continuous or repeated exposure to conditions) resulting in single or multiple injuries (e.g., exposure to toxic wastes or asbestos over time). Significantly, in the present case we are dealing both with claims of continuous or progressively deteriorating bodily injury (the Newman v. Stringfellow lawsuit), and progressively deteriorating property damage (the Stringfellow and Levin Metals cases), all arising from continuous or repeated exposure to hazardous waste contamination over time, allegedly including the periods when Admiral's policies were in effect. With these considerations in mind, we turn next to the express language of the contracts of insurance here in issue, looking first to the relevant principles of insurance policy interpretation that must govern our construction of the contested provisions. 2. Admiral's policy language and the applicable rules of interpretation. (3) Insurance policies are contracts and, therefore, are governed in the first instance by the rules of construction applicable to contracts. Under statutory rules of contract interpretation, the mutual intention of the parties at the time the contract is formed governs its interpretation. (Civ. Code, § 1636.) Such intent is to be inferred, if possible, solely from the written provisions of the contract. ( Id., § 1639.) The clear and explicit meaning of these provisions, interpreted in their ordinary and popular sense, controls judicial interpretation unless used by the parties in a technical sense, or unless a special meaning is given to them by usage. ( Id., §§ 1638, 1644.) If the meaning a layperson would ascribe to the language of a contract of insurance is clear and unambiguous, a court will apply that meaning. (See AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 822 [274 Cal. Rptr. 820, 799 P.2d 1253] ( AIU ); Reserve Insurance Co. v. Pisciotta (1982) 30 Cal.3d 800, 807 [180 Cal. Rptr. 628, 640 P.2d 764]; Crane v. State Farm Fire & Cas. Co. (1971) 5 Cal.3d 112, 115 [95 Cal. Rptr. 513, 485 P.2d 1129, 48 A.L.R.3d 1089].) (4) In contrast, [i]f there is ambiguity ... it is resolved by interpreting the ambiguous provisions in the sense the promisor (i.e., the insurer) believed the promisee understood them at the time of formation. (Civ. Code, § 1649.) If application of this rule does not eliminate the ambiguity, ambiguous language is construed against the party who caused the uncertainty to exist. ( Id., § 1654.) ( AIU, supra, 51 Cal.3d at p. 822.) This rule, as applied to a promise of coverage in an insurance policy, protects not the subjective beliefs of the insurer but, rather, `the objectively reasonable expectations of the insured.' ( AIU, supra, at p. 822.) Only if this rule does not resolve the ambiguity do we then resolve it against the insurer. (See AIU, supra, at p. 822.) ( Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1265 [10 Cal. Rptr.2d 538, 833 P.2d 545]; see also Cooper Companies v. Transcontinental Ins. Co. (1995) 31 Cal. App.4th 1094, 1101-1102 [37 Cal. Rptr.2d 508].) We explained further in AIU, supra, 51 Cal.3d at page 822, that [i]n the insurance context, we generally resolve ambiguities in favor of coverage. (See, e.g., State Farm Mut. Auto. Ins. Co. v. Jacober (1973) 10 Cal.3d 193, 197 [110 Cal. Rptr. 1, 514 P.2d 953]; Bareno v. Employers Life Ins. Co. (1972) 7 Cal.3d 875, 878 [103 Cal. Rptr. 865, 500 P.2d 889]; Continental Casualty Co. v. Phoenix Constr. Co. (1956) 46 Cal.2d 423, 437 [296 P.2d 801, 57 A.L.R.2d 914].) Similarly, we generally interpret the coverage clauses of insurance policies broadly, [in order to protect] the objectively reasonable expectations of the insured. (See, e.g., Garvey v. State Farm Fire & Casualty Co. [, supra, ] 48 Cal.3d 395, 406; Reserve Insurance Co. v. Pisciotta, supra, 30 Cal.3d at p. 808.) These rules stem from the fact that the insurer typically drafts policy language, leaving the insured little or no meaningful opportunity or ability to bargain for modifications. (See, e.g., Garcia v. Truck Ins. Exchange (1984) 36 Cal.3d 426, 438 [204 Cal. Rptr. 435, 682 P.2d 1100]; Bareno, supra, 7 Cal.3d at p. 878.) Because the insurer writes the policy, it is held `responsible' for ambiguous policy language, which is therefore construed in favor of coverage. (Fn. omitted; see also Mehr et al., Principles of Insurance (8th ed. 1985) p. 137.) (5) Is the language of Admiral's contracts of insurance here in issue clear and explicit, and thus controlling (Civ. Code, §§ 1638, 1644)  or is it ambiguous, requiring us to interpret the coverage clauses broadly in order to protect the objectively reasonable expectations of Montrose, the insured? Some courts, including the Court of Appeal below, have concluded that the varying judicial constructions placed on the definition of occurrence in the standard form CGL policy themselves attest to the inherent ambiguity in that definition. (See California Union Ins. Co. v. Landmark Ins. Co. (1983) 145 Cal. App.3d 462, 472 [193 Cal. Rptr. 461].) One commentator has gone so far as to suggest that [t]he word `occurrence' itself is ambiguous because the injury process is not a definite, discrete event. (Note, Developments in the Law  Toxic Waste Litigation (1986) 99 Harv. L.Rev. 1458, 1579.) Although any such ambiguity would ultimately have to be resolved in favor of the reasonable expectations of the insured ( Bank of the West v. Superior Court, supra, 2 Cal.4th at p. 1265; AIU, supra, 51 Cal.3d at p. 822; Garvey, supra, 48 Cal.3d at p. 406), we find that the express language of Admiral's policies of insurance, when read as a whole, unambiguously provides potential coverage for the continuous and progressively deteriorating bodily injury and property damage alleged to have occurred during Admiral's policy periods. Turning to the express policy language, Admiral contracted with Montrose to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of ... bodily injury, or ... property damage to which this insurance applies, caused by an occurrence.... (Italics added.) [P]roperty damage to which this insurance applies is defined in Admiral's policies as (1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting thereform.... (Italics added.) [12] Bodily injury to which the insurance applies is defined as bodily injury, sickness or disease sustained by any person which occurs during the policy period, including death at any time resulting therefrom. (Italics added.) We find no ambiguity in this language; it clearly and explicitly provides that the occurrence of bodily injury or property damage during the policy period is the operative event that triggers coverage. Furthermore, occurrence is defined in Admiral's policies as an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured. (Italics added.) When read together with the aforementioned clauses defining covered bodily injury and property damage, this policy language unambiguously distinguishes between the causative event  an accident or continuous and repeated exposure to conditions  and the resulting bodily injury or property damage. It is the latter injury or damage that must occur during the policy period, and which results from the accident or continuous and repeated exposure to conditions. In this case, it is the third party litigants' bodily injuries and property damage, which are alleged to have been continuous or progressively deteriorating throughout Admiral's policy periods, and which allegedly resulted from the continuous and repeated exposure to toxic chemicals for which the insured, Montrose, is an allegedly responsible party, that triggers potential coverage under the policies in question. 3. Settled case law and the drafting history of the standardized CGL policy language confirm that coverage is triggered by damage or injury occurring during the policy period. (6a) Admiral contends that to read its CGL policies as providing that coverage is triggered when damage or injury occurs within the policy periods as a result of an occurrence is to ignore[] the policy language and confuse[] the consequences of the occurrence with the occurrence itself, i.e., the event that `resulted' in damage. ( Ante, at p. 663.) Admiral in essence urges that coverage under a CGL policy is established at the time the occurrence (i.e., the precipitating act or event) first gives rise to appreciable damage or injury, and that policies that commence after an occurrence and some consequent appreciable damage or injury cannot be on the risk for progressive damage or injury that occurs during such subsequent policy periods. The relevant cases and interpretative authorities which have construed the industry-standardized CGL policy language lend no support to Admiral's position. California courts have long recognized that coverage in the context of a liability insurance policy is established at the time the complaining party was actually damaged. In Remmer v. Glens Falls Indem. Co. (1956) 140 Cal. App.2d 84 [295 P.2d 19, 57 A.L.R.2d 1379] ( Remmer ), the court was asked to interpret the definition of occurrence as that term was used in a CGL policy. The precise issue in Remmer was whether the act of defectively grading and filling a lot constituted the sole occurrence giving rise to coverage under the policy's one occurrence provision, or whether subsequent injury (an alleged maintenance of a nuisance on the graded lot adjoining the third party claimants' property) also triggered liability coverage under the policy. Relying on cases from California and other jurisdictions, the Remmer court formulated the following rule: The general rule is that the time of the occurrence of an accident within the meaning of an indemnity policy is not the time the wrongful act was committed, but the time when the complaining party was actually damaged. ( Id. at p. 88.) The Remmer formulation, which distinguishes between a wrongful act and the injurious result of that act, and holds that the triggering of liability coverage under a CGL policy is established at the time the complaining third party was actually damaged, has been embraced by such noted experts as Appleman (7A Appleman, Insurance Law & Practice (1979 rev.) § 4501.03, p. 256) and Couch (11 Couch, Insurance (2d ed. 1982) § 44:8, p. 194.) It can be found in American Jurisprudence Second (43 Am.Jur.2d (1982 rev.) Insurance, § 243, p. 324), has been accepted by the courts of many other states, and has been cited by federal courts interpreting the law of still other states. (See Annot., Event Triggering Liability Insurance Coverage as Occurring Within Period of Time Covered by Liability Insurance Policy Where Injury or Damage is Delayed  Modern Cases (1993) 14 A.L.R.5th 695, § 6 and cases cited therein.) Indeed, as stated by the Idaho Supreme Court, This rule is followed in every jurisdiction that has considered the issue except Louisiana. ( Millers Mut. Fire Ins., etc. v. Ed Bailey, Inc. (1982) 103 Idaho 377 [647 P.2d 1249, 1251].) Although the Court of Appeal concluded that potential coverage was triggered under Admiral's policies by damage or injury occurring during the policy periods, the court did not trace this long-standing interpretation of how liability coverage is triggered under a CGL policy to the rule formulated in Remmer. Instead, the court independently looked to the drafting history of the standard CGL policy language for support for its conclusion that no reasonable construction, other than that described above, could be placed on the insurance industry's use of such policy language. (7) Admiral contends that evidence of the drafting history of the standardized CGL policy provisions and definitions, and available interpretative materials, are irrelevant and should not have been considered by the Court of Appeal in construing the language of its CGL policies issued to Montrose. Most courts and commentators have recognized, however, that the presence of standardized industry provisions and the availability of interpretative literature are of considerable assistance in determining coverage issues. (See, e.g., Maryland Casualty Co. v. Reeder (1990) 221 Cal. App.3d 961, 968 [270 Cal. Rptr. 719].) Such interpretative materials have been widely cited and relied on in the relevant case law and authorities construing standardized insurance policy language. As one court has suggested, where two insurers dispute the meaning of identical standard form policy language  the meaning attached to the provisions by the insurance industry is, at minimum, relevant. ( Fireman's Fund Ins. Co. v. Aetna Casualty & Surety Co. (1990) 223 Cal. App.3d 1621, 1629 [273 Cal. Rptr. 431].) On the other hand, as another court has observed, [w]hile insurance industry publications are helpful in understanding the scope of coverage insurers are trying to delineate in any given policy, they are by no means dispositive. ( American Star Ins. Co. v. Insurance Co. of the West (1991) 232 Cal. App.3d 1320, 1330 [284 Cal. Rptr. 45], italics in original.) In this case, we find the drafting history relevant in evaluating Admiral's argument that, from a public policy standpoint, the insurance industry will be harmed by the adoption of a continuous injury trigger that the industry assertedly never anticipated would be applied to these policies. (6b) Standard CGL policy language was revised by insurance industry drafters in several important respects starting in 1966. Prior to that year, third party general liability policies covered bodily injuries and damages caused by accidents. ( American Home Prod. v. Liberty Mut. Ins. Co. (S.D.N.Y. 1983) 565 F. Supp. 1485, 1501, affd. as mod. (2d Cir.1984) 748 F.2d 760.) In 1966, the National Bureau of Casualty Underwriters and the Mutual Insurance Rating Board, the predecessor organizations to the Insurance Services Office (ISO), [13] changed the standard form policy from an accident-based to an occurrence-based format. ( Ibid., see also New Castle County v. Hartford Acc. and Indem. Co., supra, 933 F.2d at p. 1181; Pasich, Insurance Coverage for Environmental Claims (Jan. 1989) L.A.Law., p. 23, fn. 12; 3 Cal. Insurance Law & Practice, supra, Property and Liability Insurance, § 49.04, at p. 49-10.) It is reasonable to infer that the insurance industry knew precisely what the change entailed. In comments addressing the question of coverage under the new CGL policies for progressive personal injury or property damage resulting over an extended period of time, one of the drafters explained that [i]n some exposure type cases involving cumulative injuries it is possible that more than one policy will afford coverage. (Elliott, The New Comprehensive General Liability Policy, in Liability Insurance Disputes (PLI, Schreiber edit. 1968), pp. 12-3 to 12-5; see also Obrist, The New Comprehensive General Liability Insurance Policy  A Coverage Analysis (Defense Research Inst. Monograph 1966) p. 6 [same]; Nachman, The New Policy Provisions for General Liability Insurance (1965) 18 CPU Annals 197, 200 [same].) By 1966, the insurance industry was also demonstrating its awareness of potential coverage issues involving continuous or progressively deteriorating bodily injury and property damage. Richard H. Elliott, then secretary of the National Bureau of Casualty Underwriters, wrote the following regarding the adoption of the occurrence-based CGL policy, which standard form policy retained the term accident within its definition of occurrence: The new policy will afford coverage on an `occurrence' basis. `Occurrence' is defined as `an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury and property damage neither expected nor intended from the standpoint of the insured.' Note that this definition includes the word `accident.' This has been done in order to clarify the intent with respect to time of coverage and application of policy limits, particularly in situations involving a related series of events attributable to the same factor. Under such circumstances only one accident or occurrence is intended as far as the application of policy limits is concerned. For example, the liability of a contractor arising out of the derailment of ten or twelve freight cars as a result of a collision with a piece of his equipment is intended to be subject to one application of the occurrence limit of the policy. Retention of the word `accident' is limiting in this sense and no other. (Elliott, The New Comprehensive General Liability Policy, in Liability Insurance Disputes, supra, at p. 12-5, italics added.) Secretary Elliot's comments leave little doubt that the definition of occurrence in the newly drafted standard form CGL policy was intended to provide coverage when damage or injury resulting from an accident or injurious exposure to conditions occurs during the policy period. The term accident was left in the definition of occurrence for the purpose of circumscribing the policy limits applicable to each occurrence. The drafters did not intend to require that an accident in the literal sense, e.g., a sudden precipitating event, occur during the policy period in order to trigger potential coverage for ensuing damage or injury. The reference to `injurious exposure to conditions [resulting in] ... bodily injury [or property damage]' eliminates any requirement that the injury result from a sudden event. Although it is most common that an injury takes place simultaneously with the exposure, there are many instances of injuries taking place over an extended period of time before they become evident [for example, the slow ingestion of foreign substances or the inhalation of noxious fumes]. In these and similar cases, the definition of `occurrence' identifies the time of loss for purposes of applying coverage  the injury must take place during the policy period. (3 Cal. Insurance Law & Practice, supra, Property and Liability Insurance, § 49.12, at pp. XX-XX-XX-XX, fns. omitted.) As these materials demonstrate, the drafters of the standard occurrence-based CGL policy, and the experts advising the industry regarding its interpretation when formulated in 1966, contemplated that the policy would afford liability coverage for all property damage or injury occurring during the policy period resulting from an accident, or from injurious exposure to conditions. Nothing in the policy language purports to exclude damage or injury of a continuous or progressively deteriorating nature, as long as it occurs during the policy period. Nor is there any basis for inferring that an insured's understanding and reasonable expectations regarding the scope of coverage for damage or injury occasioned during the effective period of an occurrence-based CGL policy would have been otherwise. [14] We have shown how the clear and explicit language of Admiral's policies supports the conclusion that potential coverage is triggered by the occurrence of bodily injury or property damage during the policy periods, as a result of an accident or the continuous or repeated exposure to conditions. We next review the relevant reported decisions, from California, the federal courts, and other state courts, that have sought to construe the industry-standardized CGL policy language to determine how continuous injury or damage triggers potential coverage under such policies. As will be seen, the weight of authority, consistent with our own interpretation of Admiral's express policy language, is that bodily injury and property damage that is continuous or progressively deteriorating throughout successive CGL policy periods, is potentially covered by all policies in effect during those periods. 4. Survey of case law and authorities discussing triggering of coverage under CGL policies where injury or damage is continuous over successive policy periods. (8) The issue of trigger of coverage in continuous injury or damage cases has been explored by many courts. (See Annot. (1993) 14 A.L.R. 5th 695.) Courts have recognized several triggers as a means of identifying the nature and timing of damage or injury that will give rise to liability coverage under an occurrence-based CGL policy. The courts have generally viewed the timing of damage or injury under occurrence-based CGL policies in four ways: at the date of exposure to the injurious or damage-causing event or conditions; at the date of the first occurrence of injury in fact; at the date of manifestation or discovery of the damage or injury; and over the continuous period from exposure through manifestation and beyond, where the damage or injury is ongoing, continuous, or progressively deteriorating throughout a policy period or successive policy periods. At this point it will be helpful to briefly outline the various trigger theories formulated by the courts. The exposure (or continuous exposure) trigger. This trigger of coverage theory, first applied in cases involving asbestos-related bodily injuries, focuses on the date on which the injury-producing agent first contacts the body. The exposure theory apportions the cost of indemnity among those insurers whose policies were in effect from that point in time onward. In effect, under this theory, damage or injury is deemed to commence from the first contact of the injury-producing agent with the injured party. The leading case espousing this trigger of coverage analysis is the Sixth Circuit's decision in Ins. Co. North America v. Forty-Eight Insulations (6th Cir.1980) 633 F.2d 1212, clarified 657 F.2d 814, cert. den. (1981) 454 U.S. 1109 [70 L.Ed.2d 650, 102 S.Ct. 686] ( Forty-Eight Insulations ). The court in Forty-Eight Insulations found that the covered occurrence of injury commenced with the immediate contact of an asbestos fiber with the lungs, even though the progressive disease typically took some 20 years to develop. (633 F.2d at pp. 1215, 1218-1220.) The court reasoned that because of the cumulative and progressively deteriorating nature of the disease, it had to be distinguished from the ordinary accident or injury situation, and further, that because the injury is a continuing one, the insurers who furnished comprehensive general liability policies would expect the scope of their policies' coverage to parallel the applicable theory of liability. The manifestation (or manifestation of loss) trigger. This trigger of coverage, which, as already explained, was adopted by this court in the first party property insurance context in Prudential-LMI, supra, 51 Cal.3d 674, holds the insurer insuring the property at the time appreciable property damage first becomes manifest solely responsible for indemnification to the insured. For purposes of applying the rule, the time at which the property damage becomes manifest (also the point of inception of the loss) is that point in time when appreciable damage occurs and is or should be known to the insured, such that a reasonable insured would be aware that his notification duty under the policy had been triggered. ( Id. at p. 699.) In Prudential-LMI, supra, 51 Cal.3d 674, we identified three reasons supporting the application of the manifestation theory in the first party property insurance context. First, application of that trigger of coverage meets the reasonable expectations of the insureds who, in seeking to insure against perils to their property, would normally look to their present carrier for coverage. ( Id. at p. 699.) Second, the underwriting practices of the insurer can be made predictable because the insurer is not liable for a loss once its contract with the insured ends unless the manifestation of loss occurred during its contract term. ( Ibid. ) Third, since the insured is required under a standard first party property insurance policy to file suit against the insurer within 12 months after inception of the loss, and since inception of the loss is the date on which appreciable damage occurs and is or should be known to the insured, the definition of manifestation of loss and inception of the loss must be one and the same, that is to say, that point in time when appreciable damage occurs and is or should be known to the insured, such that a reasonable insured would be aware that his notification duty under the policy had been triggered. ( Prudential-LMI, supra, 51 Cal.3d at pp. 686-687, 699.) These policy reasons led us to conclude, in conformity with the loss-in-progress rule, [that first party property] insurers whose policy terms commence after initial manifestation of the loss are not responsible for any potential claim.... ( Id. at p. 699.) [15] The continuous injury (or multiple) trigger. Under this trigger of coverage theory, bodily injuries and property damage that are continuous or progressively deteriorating throughout successive policy periods are covered by all policies in effect during those periods. The timing of the accident, event, or conditions causing the bodily injury or property damage, e.g., an insured's negligent act, is largely immaterial to establishing coverage; it can occur before or during the policy period. Neither is the date of discovery of the damage or injury controlling: it might or might not be contemporaneous with the causal event. It is only the effect  the occurrence of bodily injury or property damage during the policy period, resulting from a sudden accidental event or the continuous or repeated exposure to conditions  that triggers potential liability coverage. The appellate cases in which this trigger of coverage was developed are discussed in greater detail below. The injury-in-fact trigger. Under an injury-in-fact trigger, coverage is first triggered at that point in time at which an actual injury can be shown, retrospectively, to have been first suffered. This rationale places the injury-in-fact somewhere between the exposure, which is considered the initiating cause of the disease or bodily injury, and the manifestation of symptoms, which, logically, is only possible when an injury already exists. (See Abex Corp. v. Maryland Cas. Co. (D.C. Cir.1986) 790 F.2d 119 [252 App.D.C. 297] [asbestos]; American Home Products Corp. v. Liberty Mut. Ins. (2d Cir.1984) 748 F.2d 760 [pharmaceuticals].) In the context of continuous or progressively deteriorating injuries, the injury-in-fact trigger, like the continuous injury trigger, affords coverage for continuing or progressive injuries occurring during successive policy periods subsequent to the established date of the initial injury-in-fact. However, the injury-in-fact trigger, unlike the exposure trigger, when applied in asbestos cases excludes from coverage the period from initial exposure to the date on which the injury-in-fact was first suffered. [16] As already indicated, in the case before us, Montrose urges our adoption of a continuous injury trigger of coverage. Admiral in turn, in its briefs, urges us to apply a manifestation trigger of coverage. At oral argument, however, counsel for Admiral appeared to deviate from this position, arguing instead that an injury-in-fact trigger, and not a manifestation trigger, should be applied. [17] We shall give Admiral the benefit of the doubt and consider which, if any, of the recognized trigger of coverage theories should be applied here. The precise question, of course, is what result follows under the language of the policies of insurance to which the parties agreed, including the standardized definitions that were incorporated into those policies. As will be seen, most courts that have analyzed the issue have found the continuous injury trigger of coverage applicable to the standard occurrence-based CGL policy. One of the first cases to apply a continuing injury theory of loss allocation in the context of progressive property damage was Gruol Construction Co. v. Insurance Co. of North America (1974) 11 Wn.App. 632 [524 P.2d 427] ( Gruol ). In that case, a contractor prevailed in an action against his insurer who had failed to defend him under his general liability policy in a third party construction defect suit for recovery of dry rot damage to a building. The contractor's improper piling of dirt against the building had caused the dry rot. The court held that the injury was a continuous process which began at the time of the negligent construction and continued through the manifestation of the dry rot damage, `even though there [was] a lapse of time between the initial negligent act and the occurrence of the ultimate damage....' ( Id. at p. 636 [524 P.2d at p. 430].) Thus the holding of Gruol was that, when warranted by the facts, property damage should be deemed to occur over the entire process of the continuing injury. An insurer would become liable at any point in the process for the entire loss up to the policy limits, even though the continuing injury or progressively deteriorating damage may extend over several policy periods. The first reported California case to discuss the triggering of potential coverage under third party liability insurance policies, where continuous or progressively deteriorating property damage was involved, was California Union Ins. Co. v. Landmark Ins. Co., supra, 145 Cal. App.3d 462 ( California Union ). That case involved a gradual leak of water from a swimming pool which caused damage to adjoining property. The parties stipulated that the pool began to leak in June 1979, and that a crack in the pool was the sole cause of the ensuing property damage. Damage to the adjoining property occurred between July 1979 and November 1980. Landmark Insurance Company (Landmark) was on the risk from July 1978 to July 1980. California Union Insurance Company (Cal Union) provided liability coverage from July 1980 to July 1981. ( Id. at pp. 467-469.) The source of the leakage damage in California Union was discovered during an inspection of the pool in October 1980, at a point in time following expiration of the Landmark policy and during the term of the successive Cal Union policy. At trial, the two carriers contested liability for the damage that occurred between October 1980 (discovery of the leak) and November 1980 (repair of the source of the damage). Landmark had undertaken repairs prior to the expiration of its policy in July 1980, but apparently repaired only the damage to the slopes of the adjoining property, and not the as-yet undiscovered source of the damage: the leaking pool. Landmark contended that the postdiscovery damage (that which occurred after October 1980) constituted a separate occurrence within the definition of that term in the Cal Union policy, and was therefore Cal Union's sole responsibility. Cal Union in turn argued the damage was a continuation of a single occurrence that began during the period of coverage provided by the Landmark policies, and was thus the sole responsibility of Landmark. ( California Union, supra, 145 Cal. App.3d at p. 468.) The trial court held that each manifestation of damage should be treated as a separate occurrence under the policies, rejecting Cal Union's position that separate incidents of manifestation of damage which are attributable to the same underlying cause are merely manifestations of the same continuous occurrence of damage. ( California Union, supra, 145 Cal. App.3d at p. 469.) The Court of Appeal reversed, concluding that the trial court's ruling contravened the express language of each insurer's policies. ( Ibid. ) On appeal, both insurers in California Union readily acknowledged that under the rule of Remmer, supra, 140 Cal. App.2d 84 ( ante, at pp. 669-670), a coverable occurrence arose under their policy language at the point at which the complaining party was actually damaged, not the time at which the initial damage-causing act or conditions transpired. ( California Union, supra, 145 Cal. App.3d at p. 470.) The California Union court agreed, pointing out that the precise facts of Remmer were distinguishable from those in the case before it. Observing that the dangerous condition in Remmer (a defectively graded lot) had failed to manifest any damage for a period of five years, the California Union court noted that in the case before it the leaking pool was a continuous active force at work during the eighteen months between the time of the wrongful act (the crack in the pool that first gave rise to the water damage to the adjoining property) and the manifestation of the actual loss. ( Id. at p. 473.) Focusing on the identical one occurrence language in Cal Union's and Landmark's CGL policies (`all ... property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence'), the California Union court concluded that, given the continuing and progressively deteriorating nature of the pool leakage damage, the trial court's determination that each manifestation of damage was a separate occurrence conflicted with the one occurrence policy language in each insurer's policies. ( Id. at p. 469.) The California Union court next surveyed several California appellate decisions which, up to that time, had attempted to set, for definitional purposes, the timing of occurrences of damage or injury transpiring prior to, during, or after the effective periods of successive third party liability insurance policies. ( California Union, supra, 145 Cal. App.3d at pp. 471-472, 474, and cases cited.) Although each such case [w]ithout exception ... involved delays in varying periods of time between the wrongful act and [manifestation of] the actual loss, the California Union court observed that none had involved actual continuous or progressively deteriorating damage or injury. ( Id. at p. 473.) The court also took note of the settled authorities holding that an insurer's obligation to indemnify an insured for manifested losses may continue even after the term of the policy expires. ( Ibid. ) [18] Even in the third party liability insurance context, an insurer's liability for a still insured and continuing event is not terminated by the expiration of the policy term. ( California Union, supra, 145 Cal. App.3d at p. 475; accord, Harman v. American Casualty Co. of Reading, Pa. (C.D.Cal. 1957) 155 F. Supp. 612.) As stated in California Union: [I]n a `one occurrence' case involving continuous, progressive and deteriorating damage, the carrier in whose policy period the damage first becomes apparent remains on the risk until the damage is finally and totally complete, notwithstanding a policy provision which purports to limit the coverage solely to those accidents/occurrences within the time parameters of the stated policy term. ( California Union, supra, 145 Cal. App.3d at p. 476.) Having found under settled principles of law that insurer Landmark remained obligated to indemnify the insured for the pool leakage damage which commenced prior to, but continued to progressively deteriorate after, expiration of Landmark's policy, the California Union court then turned to the unsettled question of whether the successive insurer, Cal Union, was also on the risk for the damage occurring during its successive policy period. Although it was true that the force producing the continuing pool leakage was already set in motion when Cal Union came on the risk with the initiation of its successive policy, that damage-causing force continued into the period of Cal Union's policy, further damage occurred during that policy period, and substantial corrective procedures were necessary and performed after the October-November 1980 damage manifested itself during the period of Cal Union's policy. ( California Union, supra, 145 Cal. App.3d at p. 476.) The California Union court concluded Cal Union was on the risk to indemnify the insured for the continuous property damage occurring through its successive policy period. [19] The court placed primary reliance on three cases. The first was Gruol, supra, 11 Wn.App. 632 [524 P.2d 427]. Gruol, as noted above ( ante, at pp. 677-678), held that progressive property damage should be deemed to occur over the entire process of the continuing injury, with a CGL carrier liable at any point in the process for the entire loss up to the policy limits, even though the continuous or progressively deteriorating damage extends over successive policy periods. (11 Wn.App. at p. 636 [524 P.2d at pp. 430-431].) The second case relied on by the California Union court was the Sixth Circuit Court of Appeals' decision in Forty-Eight Insulations, supra, 633 F.2d 1212. As noted above, Forty-Eight Insulations was the leading case on the exposure theory of coverage, holding that due to the continuing and cumulative nature of asbestos-related diseases, insurers providing CGL coverage commencing at the time of the worker's initial exposure to asbestos particles would be held potentially liable to defend and indemnify the insured manufacturer of asbestos products in underlying third party actions alleging bodily injury claims against the insured. ( Ante, at p. 674.) Recognizing that Forty-Eight Insulations was an asbestos products liability case, the California Union court nonetheless concluded that because the Sixth Circuit Court of Appeals' decision involved a CGL policy covering single accident/occurrence, continuing damage claims, the basic rationale of that decision was applicable to the continuous injury trigger analysis being invoked for the ongoing property damage at issue in California Union. ( California Union, supra, 145 Cal. App.3d at p. 478.) The third case relied on by the California Union court was Keene, supra, 667 F.2d 1034. [20] Like Forty-Eight Insulations, Keene was a products liability case in which the manufacturer of insulation products containing asbestos brought an action for a declaratory judgment seeking a determination of the obligations of four liability insurance carriers to defend and indemnify it in pending products liability litigation. Holding that the occurrence which caused the bodily injury took place substantially before the manifestation of the ultimate injury (asbestosis), the District of Columbia Circuit Court of Appeals found each insurer on the risk between the initial exposure and the manifestation of disease to be potentially liable for indemnification and defense costs. (667 F.2d at pp. 1046-1047; California Union, supra, 145 Cal. App.3d at p. 478.) The Keene court based its rationale primarily on the expectations of the parties and the ambiguities it perceived as inherent in the standard CGL policy language. Applying the presumption requiring ambiguities to be construed in favor of the insured, the Keene court reasoned that Keene Corporation (the insured) could have reasonably expected that it was covered for future liabilities: A latent injury, unknown and unknowable to Keene at the time it purchased [liability] insurance, must, at least, be covered by an insurer on the risk at the time it manifests itself. ( Keene, supra, 667 F.2d at p. 1044.) In the context of a progressive disease like asbestosis, where the medical evidence indicates that the disease can develop or manifest as late as 20 or more years after exposure, the continuous injury trigger of potential coverage adopted in Keene, consistent with the expectations of the insured, fixes the timing of the injury at the point of initial exposure of the injured third party to the injury-causing agent, at the time of manifestation of symptoms of bodily injury, and during the development and progression of the disease in between those points in time. The Keene court also broadly interpreted bodily injury to mean any part of the single injurious process that asbestos-related diseases entail. ( Id. at p. 1047.) Fireman's Fund Ins. Co. v. Aetna Casualty & Surety Co., supra, 223 Cal. App.3d 1621 ( Fireman's Fund ) was the next California appellate decision postdating California Union to directly address the question of coverage for continuous property damage or losses under successive third party CGL policies. In Fireman's Fund, two liability carriers insured a contractor that had undertaken the restoration of the exterior facade of a hotel. The first carrier (Fireman's Fund) was on the risk when construction defects (spalling and cracking of the restored facade) were first discovered; the second carrier (Aetna) was on the risk when the defects progressed and when their cause became known. ( Fireman's Fund, supra, 223 Cal. App.3d at p. 1623.) On cross-motions for summary judgment, based upon stipulated facts and purporting to rely on the rationale of Home Ins. Co. v. Landmark Ins. Co. (1988) 205 Cal. App.3d 1388 [253 Cal. Rptr. 277] ( Home ) (a first party property insurance case holding that only the first of two successive insurers, the carrier on the risk on the date of first manifestation of the property damage, was liable for the entire claim), the trial court determined Fireman's Fund was solely responsible to indemnify the contractor for an arbitration award returned against it. The Fourth District Court of Appeal (the same court that decided Home ) affirmed the trial court's order, rejecting Fireman's Fund's argument that the analysis of Home was inapposite because that case involved first party property insurance coverage, not third party general liability insurance. ( Fireman's Fund, supra, 223 Cal. App.3d at pp. 1623-1624.) Although the Fireman's Fund court was construing standardized third party CGL policies, the court refused to apply the continuous injury trigger of coverage analysis adopted for third party liability insurance policies in California Union, supra, 145 Cal. App.3d 462. The Fireman's Fund court observed that it had already considered and rejected the reasoning of California Union in Home, supra, 205 Cal. App.3d 1388, and opined that coverage under successive third party CGL policies, in essence, should require no different analysis than that which was applied in the first party property insurance context in Home. In short, the Fireman's Fund court applied the manifestation trigger of coverage which it had earlier adopted in Home. ( Fireman's Fund, supra, 223 Cal. App.3d at pp. 1626-1627.) The court indicated that [t]o the extent Home's rationale rests on the loss-in-progress rule, it, too, is fully applicable to a third party claim. ( Id. at p. 1627, fn. omitted.) And the Fireman's Fund court reasoned further that, [l]ike the situation in Home, here the issues arise in a context where the claimant [i.e., the insured] has been fully satisfied and the case involves allocating loss between insurers. Home is, therefore, dispositive. Contrary to Fireman's Fund's contention, Garvey v. State Farm Fire & Casualty Co., supra, 48 Cal.3d 395 does not change the result. ( Id. at p. 1628.) The Fireman's Fund court made clear in its opinion that our admonishments in Garvey, respecting the differences between first party property and third party liability insurance, had little impact on that court's determination to apply its earlier trigger of coverage analysis in Home to the third party liability insurance case before it. The Fireman's Fund court suggested: In Garvey, the Supreme Court held it is `important to separate the causation analysis necessary in a first party property loss case from that which must be undertaken in a third party tort liability case.' ( Garvey v. State Farm Fire & Casualty Co., supra, 48 Cal.3d at p. 406, italics added.) However, although there are important differences between property damage insurance and liability insurance  not the least of which is causation analysis  the issues here do not even remotely involve causation. Garvey neither holds nor suggests that all legal principles developed in first party cases are inapplicable in third party cases. Thus, even if Home's rationale was solely based upon first party insurance provisions (which it is not), Garvey does not prohibit its application to liability coverage. ( Fireman's Fund, supra, 223 Cal. App.3d at p. 1628, italics in original.) The Fireman's Fund court failed to engage in any meaningful discussion of what factors set first party property insurance policies apart from third party comprehensive liability insurance policies. Nor did the court set forth in its opinion, or make any attempt to analyze, the standard definition of occurrence found in the standard form CGL policy. [21] Finally, apparently satisfied with its earlier observation in Home that, [b]y its terms, section 22 [the codified loss-in-progress rule] applies to both first-party [property insurance] and third-party [liability insurance] cases ( Home, supra, 205 Cal. App.3d at p. 1395, fn. 4), the Fireman's Fund court made no further effort to analyze how application of the loss-in-progress rule might differ in the third party liability insurance context. Only one reported California decision followed Fireman's Fund in holding the manifestation trigger of coverage applicable in cases of continuous or progressively deteriorating damage or injury under successive third party CGL policies. In Pines of La Jolla Homeowners Assn. v. Industrial Indemnity (1992) 5 Cal. App.4th 714 [7 Cal. Rptr.2d 53], the Fourth District Court of Appeal once again, relying on its earlier holding in Fireman's Fund, supra, 223 Cal. App.3d 1621, concluded that a manifestation theory should be applied in determining the trigger of potential coverage applicable under several CGL policies for continuous property damage resulting from construction defects. (5 Cal. App.4th at pp. 721-722.) Most recently, the Fourth District Court of Appeal decided Zurich Ins. Co. v. Transamerica Ins. Co. [] (Cal. App.) ( Zurich ). Zurich involved a declaratory relief action, brought by one of four liability insurers who provided successive periods of coverage to a construction company, to determine the respective defense and indemnity obligations of each insurer with regard to three underlying construction defect actions against the company pertaining to a condominium project. The Fourth District Court of Appeal in Zurich repudiated the rationale of its earlier decision in Fireman's Fund, supra, 223 Cal. App.3d 1621. The court acknowledged that [t]he manifestation rule developed in the first party context is not appropriately applied across the board, and that [i]nstead, in this [third party] liability context, a `continuing injury' trigger should be used, because property damage occurred ... and continued ... [over a period of several years]. The court [n]oted that the manifestation rule presupposes that the first party insured will be on site to observe the damage; it is in the nature of a discovery rule. However, third party liability policies do not contain in their occurrence sections any discovery requirement or a policy limitations period for the filing of an action after manifestation of a defect. The Zurich court also retreated from the rather narrow definition of contingency espoused in Fireman's Fund in connection with that opinion's discussion of the loss-in-progress rule, and reached new conclusions regarding the applicability of that rule in third party liability insurance cases, consistent with the conclusions we reach today respecting the applicability of that rule to this case. ( Post, at pp. 689-692.) Accordingly, to the extent the decisions in Fireman's Fund, supra, 223 Cal. App.3d 1621, and Pines of La Jolla Homeowners Assn. v. Industrial Indemnity, supra, 5 Cal. App.4th 714, are inconsistent with the principles discussed herein, those decisions are hereby disapproved.