## Facts

- Benjamin Moore & Co., a paint manufacturer, faced long-tail class and related claims alleging injury from exposure to its paint products, including lead-based paint.
- Benjamin Moore sought defense and indemnity under multiple years of comprehensive general liability policies issued by Aetna and other insurers.
- The policies included Deductible Liability Endorsements imposing per-occurrence deductibles that varied by year (e.g., $250,000 and $500,000).
- Under New Jersey’s continuous-trigger doctrine for progressive harm, the alleged injuries implicated multiple policy years.
- Benjamin Moore filed a declaratory judgment action seeking a ruling that it could either (a) select a single triggered policy year to cover the entire loss and pay one deductible, or (b) allocate deductibles across all triggered years on a pro rata basis.
- The insurers argued that the policy language required Benjamin Moore to satisfy the full per-occurrence deductible in each triggered policy year before any indemnity was owed for that year.
- The trial court and Appellate Division held that the full deductible applied separately in each triggered year; the Supreme Court granted review.

## Issues

1. In a continuous-trigger, pro rata allocation framework for long-tail injury, must the insured satisfy the full per-occurrence deductible in each triggered policy year before receiving indemnity under that year’s policy?
2. May deductibles be aggregated, reduced, or prorated across triggered years to reflect pro rata allocation of the underlying loss?

## Decision

- The Supreme Court affirmed.
- The insured must satisfy the full per-occurrence deductible in each triggered policy year before the insurer for that year owes indemnity.
- Deductibles may not be prorated, allocated, or collapsed into a single deductible across multiple triggered policies.
- Enforcing per-year deductibles was consistent with the court’s long-tail allocation approach and with applying insurance contracts according to their terms.

## Legal Principles

- Under New Jersey long-tail coverage law, progressive injury can trigger multiple policy years, but coverage within each year remains governed by that year’s policy terms and conditions.
- Pro rata allocation of loss among triggered years does not authorize courts to rewrite core economic terms of coverage, including deductibles.
- A per-occurrence deductible endorsement applies separately under each triggered policy; the insured’s obligation to pay the deductible is a condition precedent to indemnity under that policy.
- Structural features of insurance programs (e.g., annual deductibles and year-by-year exhaustion concepts) are enforced on a policy-year basis in long-tail claims.

## Conclusion

For long-tail claims spanning multiple triggered policy years, New Jersey requires the insured to pay the full per-occurrence deductible in each triggered year’s policy before obtaining indemnity for that year, and courts will not prorate or aggregate deductibles to reduce the insured’s cumulative deductible obligation.


Benjamin Moore & Co. v. Aetna Cas. & Sur. Co., 179 N.J. 87, 843 A.2d 1094 (2004)