“Continuous Trigger” Theory Applies Separately to Each Policyholder

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Franklin Mutual Ins. Co. v. Metropolitan Property & Casualty Ins. Co..

(N.J. App., April 17, 2009)

A property insurer sought pro-rata reimbursement from a policyholder’s previous insurer following payment for environmental contamination from an underground heating oil tank.  The contamination occurred continuously during both policy’s effective periods as well as a period of ownership by previous owner.  The court held that, under New Jersey’s “continuous trigger” theory, the pro-rata formula is applied separately to each individual policyholder and not collectively to all policies in effect for all policyholders who owned the property during the period of contamination.


By Daniel W Gerber and Sarah J. Delaney