As Abuse Limitations Windows Open, Coverage Fights Follow
A state's opening of the statute of limitations for sexual abuse victims often leads to a surge in insurance coverage disputes, experts say, leaving policyholders looking to a variety of carriers to help shoulder the burden of defense and settlement costs.
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The statute of limitations, which puts an end date to when a claim or lawsuit can be filed for an injury, was originally a creation of Roman Law, Jim Murray, an insurance recovery attorney at Blank Rome LLP's Washington, D.C., office, told Law360. The statute carried over to English law and is well known to insurers when calculating and underwriting risks.
"The big picture is that it is a balancing of public interest against the 2000-year-old Roman and then Anglican theory of justice in terms of how to prove the case," Murray said.
While the opening of the statute of limitations by states has been a relatively recent phenomenon, Murray explained that the concept originated in 1981 when Congress passed the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, law to hold companies responsible for contaminating sites that housed their operations. Murray said CERCLA impacted environmental litigation by holding polluters strictly and jointly and severally liable for paying the costs of remediating contamination.
CERCLA also made the statute of limitations retroactive to when property damage occurred, Murray said. This focus on years- or decades-old injuries also has become a hallmark of other "long-tail" coverage disputes, including those over injury claims resulting from asbestos exposure and, most recently, sexual assault, he explained.
The surge in asbestos personal injury suits and coverage disputes, however, can be attributed to the discovery rule, Murray said, a concept that says the statute of limitations starts running when an injury and event are connected. He explained that individuals exposed to asbestos in the 1940s often did not know they were injured until they were diagnosed with mesothelioma, a signature disease caused by inhaling the substance.
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"As Abuse Limitations Windows Open, Coverage Fights Follow," by Shane Dilworth was published in Law360 on March 17, 2023.