Highest State Court in Wisconsin Upholds Asbestos Exclusion

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In this matter, plaintiffs purchased a building from seller-defendants who failed to disclose the building’s heating ducts likely contained asbestos.  The plaintiffs eventually lost the building in foreclosure after evacuating the entire building and being unable to finance the building.

The preceding court held that the insurer had no duty to defend or indemnify the seller-defendants because the matter fell squarely within the asbestos exclusion.  Stating that the policy required “a causal relationship between the loss and the asbestos” in order for the exclusion to apply, and noting that such a relationships did exist between the loss claimed and the asbestos (i.e., the dispersal of asbestos throughout the building), it found the asbestos exclusion barred coverage.

Although it was argued that the exclusion should not apply since the cause of loss was seller-defendants’ failure to disclose the presence of asbestos, the court disagreed, citing the policy’s broad “arising out of” language.

Phillips et al v. Parmelee, et al., 2011AP2608 (December 27, 2013)