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by Alexander Masotto

Asbestos fibers, chemical fumes, environmental pollutants—what do they have in common? They all involve injuries that manifest over time and are continuously at the center of the complex exposure trigger debate.

On March 31, 2025, the United States District Court for the Northern District of Texas granted two excess insurers’ motions for summary judgment in part and held that their respective excess policies were not triggered by two out of the three underlying asbestos lawsuits. Each underlying lawsuit presented distinct allegations relating to injury and exposure.

In Berkshire Hathaway Specialty Ins. Co. v. Interstate Fire & Cas. Co., et al., No. 4:22-CV-01137-P, 2025 WL 963365 (N.D. Tex. Mar. 31, 2025), the dispute involved excess liability coverage for asbestos-related personal injury claims stemming from products manufactured by Murco Wall Products, Inc. sold in the 1970s and 1980s. Eventually, plaintiffs in several state-court lawsuits alleged that exposure to asbestos in Murco’s products caused them to develop serious illnesses decades after exposure.

Murco’s primary insurers either became insolvent or exhausted their policy limits, leading Murco to seek coverage from its excess insurers. After Berkshire Hathaway Insurance Company agreed to defend and indemnify Murco in three underlying suits, it sought contribution from the other excess insurers Canal Insurance Company and Interstate Fire & Casualty Company for their pro rata shares, arguing that their policies covered the three claims.

In response to Berkshire’s pleading seeking coverage under Canal’s and Interstate’s policies, Canal and Interstate moved for summary judgment on the basis that none of the underlying lawsuits triggered their policies. Accordingly, Canal and Interstate argued they were not obligated to contribute to Murco’s settlement or defense costs because any alleged injuries did not occur during their policy periods.

U.S. District Court Judge Mark T. Pittman carefully analyzed the occurrence-based policies to determine when the “occurrence” took place. While the Court acknowledged the existence of many trigger theories, Canal and Interstate asserted that binding Texas precedent required the court to apply an exposure theory. Under the exposure trigger theory, “occurrence-based policies only cover the insured when at least part of the asbestos exposure occurs during the policy period.”

In contrast, Berkshire contended that courts approach the trigger issues on a “case-by-case basis” based on the express terms of each policy to accurately determine the appropriate trigger theory. Based on the policies at issue, Berkshire argued that an injury-in-fact theory should apply, even if the claimant’s actual exposure to asbestos stopped before the inception of the Canal and Interstate policy periods. Under the injury-in-fact trigger theory, the meaning of occurrence includes “the damage that takes place in the body after a person has stopped inhaling asbestos.”

Although the plaintiffs in the underlying suits were exposed before the policy periods, Berkshire provided evidence that the asbestos fibers continued to cause tissue damage long after inhalation.

After carefully considering the theories, Judge Pittman held that the exposure theory applied because: “The chronic damage caused by latent asbestos fibers may reasonably be called an ‘injury,’ or even a ‘condition,’ but it is certainly not ‘exposure’ to a condition. Moreover, the relevant policies defined “occurrence” as “exposure . . . which [causes or results in] personal injury.”

Ultimately, the Court stated that it was adopting the same exposure trigger theory as the United States Fifth Circuit Court of Appeals in Guaranty National Ins. Co. v. Azrock Industries, 211 F.3d 239 (5th Cir. 2000), but with slight distinction. Specifically, the Court held that the Canal and Interstate policies “do not require the injury to take place during the policy period—just the exposure.” In support of the decision, Judge Pittman added that this policy interpretation “favors coverage more” than the ruling in Azrock because mere allegations of exposure during the policy periods, not necessarily injury, are sufficient to trigger the duty to indemnify.

Applying the rules above, Judge Pittman found that two out of the three underlying lawsuits did not contain any allegations of exposure during the policy periods. However, the allegations in the other lawsuit, while vague, were sufficient to create a genuine issue of material fact.

This decision clarifies and reinforces the application of the exposure trigger theory under Texas law for occurrence-based liability policies in asbestos-related claims. It also highlights the importance of the “occurrence” policy language and ensures courts will prioritize the plain meaning of the terms when determining coverage triggers.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm or its clients. This article is for general information purposes and is not intended to be and should not be taken as legal advice.