New Jersey Court Ruling Puts Insurers On the Line for Mesothelioma Claims

A controversial ruling by the New Jersey Supreme Court regarding payment of claims for mesothelioma and other asbestos-related diseases won’t have much impact on those who are filing the initial lawsuits, but will have a big impact on the companies that are being named in their claims. In a case between Honeywell and its insurers, the court decided that the insurance companies would be required to pay out claims on asbestos-contaminate products made by Honeywell, even though the company was not able to obtain insurance coverage for them. The decision will have a huge impact on insurers – they have already paid victims in over 71,000 cases against Honeywell, and there are at least that many more that are outstanding and which the insurers had tried to escape having to pay.

Few people diagnosed with mesothelioma realize that when they file a lawsuit against an asbestos company and win – either through a settlement or by jury verdict – it is rarely the company itself that pays out the claim: it is their insurance company. Companies like Honeywell purchase liability insurance specifically to protect themselves against legal costs. But when it became clear that asbestos was a dangerous carcinogen, the companies that continued making asbestos-containing products found it nearly impossible to get insurance coverage for those products. Though insurance companies have always had to pay for items that they insured, even if a disease like mesothelioma does not arise until decades after the product has no longer been manufactured, the new ruling represents something entirely new – making the insurance company pay for a risk that they did not insure.

One of the judges on the Supreme Court dissented against the decision, saying that it  “gives a corporation a free pass if it continues to expose workers to extremely dangerous products after insurance coverage becomes unavailable.” But the rest of the court said that their decision was meant to provide Honeywell with a safety net after it could no longer obtain justice, and that it spread risk across the insurance industry. As for the notion that companies would feel free to continue manufacturing dangerous products, Chief Justice Stuart Rabner wrote, “We reject that this holding will disincentivize manufacturers from responsible behavior regarding products for which insurance becomes unavailable. This manufacturer ceased its production.” Though this is true, it took Honeywell until 2001 to stop manufacturing the asbestos-contaminated brakes that were at the root of the lawsuit.

It is unclear whether other state courts will make similar decisions – if they do, then more companies may feel emboldened to continue making asbestos-contaminated products that risk mesothelioma and other asbestos-related diseases. If you have been affected by any of these products and need information or access to resources to help, contact the Patient Advocates at today to learn more. We can be reached at 1-800-692-8608.

Terri Heimann Oppenheimer

Terri Oppenheimer

Terri Heimann Oppenheimer is the head writer of our news blog. She graduated from the College of William and Mary with a degree in English. Terri believes that knowledge is power and she is committed to sharing news about the impact of mesothelioma, the latest research and medical breakthroughs, and victims’ stories.

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