New Causes of Action Asserted Against Excess Insurance Carrier for Underlying Asbestos Claims

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LSG Technologies, Inc. v. US Fire Ins. Co.

(E.D.Texas, November 25, 2009)



Over two years after initially filing a complaint in the Eastern District of Texas, plaintiff, LGS Technologies Inc., amended its complaint against an excess insurance carrier seeking a declaration of coverage with respect to several underlying asbestos and mixed dust cases.   Plaintiff argues that one or more of its primary policies have been exhausted, triggering the commercial excess policies issued by U.S. Fire Insurance Co.  Specifically, plaintiff references seven policies, with collectively over $30 million in policy limits.  U.S. Fire denies any obligation to contribute to the defense or indemnity of the underlying claims.  In addition to the declaratory relief, plaintiff has asserted claims including breach of contract, violations of the Texas Insurance Code and the DTPA, with such “knowing” violations entitling it to an award three times the actual damages, as well as attorney’s fees.


In its Answer, U.S. Fire admits that it issued policies to the plaintiff, but claims the insured failed to meet its burden that the primary policies had been exhausted.  In the alternative, the insurer contends the insured falsely represented the existence of certain primary policies, either eliminating its obligation to participate in the defense or indemnity costs or require plaintiff to undertake the obligations it relied upon in said primary policy.  The insurer also asserts certain exclusions in several of its policies, including the products hazard and pollution exclusions, bar coverage for certain claims. The Insurance and Reinsurance Report will continue to monitor this case as it develops. 


A copy of the plaintiff’s amended complaint and defendant’s answer can be found here and here


Kim Whistler and Joseph Oliva