State District Judge Holly Brown says that National Indemnity should pay the claims related to the Libby vermiculite mine (Dennison, 2018). Brown ruled that the insurance company “improperly tried to deny coverage from an insurance policy held by the state 45 years ago.” National Indemnity is blocked from denying the coverage by Montana state law even though the State agreed in 2011 to pay the approximately 2,000 residents of the area surrounding the mine who had contracted asbestos-related lung disease.
The State is trying to pass responsibility to the insurance company since they held a personal-injury policy with National Indemnity from 1973 to 1975. As early as 2002, the insurance company was named in lawsuits related to the Libby mine as liable. However, National Indemnity stated that they would not pay over $3 million based on pro-rated costs when the policy was in effect. Even though they argued that they had limited liability, they ultimately agreed to pay $16 million out of the $43 million in 2009. In 2012, National Indemnity attempted to regain the money they paid out three years earlier and sued the State for the $16 million (Associated Press, 2012).
According to inspections from 1950, the State knew that there was harmful asbestos present in the mine and that the air had a “considerable toxicity.” Even though the state knew the mine was dangerous 23 years before the policy with National Indemnity was put in to place, the State continues to deny responsibility.
Associated Press. (2012, February 24). Insurance company sues state over settlement of Libby asbestos lawsuits. Retrieved March 06, 2018, from https://missoulian.com/news/state-and-regional/insurance-company-sues-state-over-settlement-of-libby-asbestos-lawsuits/article_0d1bf16c-5f46-11e1-8d19-001871e3ce6c.html
Dennison, M. (2018, March 05). Judge says private insurer, not state, on hook for $43M in Libby asbestos claims. Retrieved March 06, 2018, from https://www.ktvq.com/story/37651675/judge-says-private-insurer-not-state-on-hook-for-43m-in-libby-asbestos-claims