## Facts

- 3M Company supplied silicone materials used in breast implants.
- Individuals implanted with silicone gel breast implants alleged systemic and autoimmune injuries from silicone leakage and tissue contact.
- 3M held occurrence-based excess liability policies issued by numerous insurers for policy years spanning 1977–1985.
- Many implants were placed during the policy years, while a substantial portion of bodily-injury suits were filed after the policies expired.
- Insurers filed a declaratory-judgment action to determine their indemnity obligations for implant claims.
- The district court found bodily injury began at implantation and continued over time due to ongoing cellular exposure, triggering multiple years of coverage; it allocated covered loss pro rata across triggered years.
- The Minnesota Court of Appeals largely affirmed.
- The Minnesota Supreme Court granted further review to address trigger, allocation, and attorneys’ fees in the coverage litigation.

## Issues

1. For occurrence-based excess policies covering “bodily injury,” is coverage triggered only upon clinical manifestation of disease, or also from implantation and continuing subclinical injury caused by ongoing exposure?
2. If multiple policy years are triggered by continuous injury, should indemnity be allocated pro rata across years or assigned as “all sums” to a single year?
3. May the insured recover attorneys’ fees incurred in the coverage declaratory-judgment litigation when the excess insurers did not breach a duty to defend?

## Decision

- The court held that bodily injury from silicone implants triggers occurrence-based coverage beginning at implantation and continues as long as injury continues, including subclinical injury from ongoing silicone-tissue contact.
- The court approved pro rata (time-on-the-risk) allocation of indemnity across all triggered policy years.
- The court denied 3M’s request for attorneys’ fees and declined to expand the limited exception permitting fee recovery when an insurer breaches a duty to defend.

## Legal Principles

- Under occurrence-based liability coverage, “bodily injury” may occur as a progressive or continuous process; coverage can be triggered at the onset of injury even if disease is not yet clinically diagnosable.
- For continuous injury spanning multiple policy periods, pro rata allocation across triggered years is permissible to match responsibility to the duration of injury and each insurer’s time on the risk.
- Minnesota follows the American Rule on attorneys’ fees; fee shifting in insurance coverage disputes is allowed only within a narrow exception when the insurer breaches its contractual duty to defend, and courts will not extend that exception to indemnity-only disputes absent a breached defense obligation.

## Conclusion

The Minnesota Supreme Court treated silicone implant claims as involving continuous bodily injury from implantation forward, triggering multiple years of occurrence-based excess coverage and requiring pro rata allocation across those years, while holding that the insured could not recover coverage-litigation attorneys’ fees without a breached duty to defend.


In re Silicone Implant Ins. Coverage Litig., 667 N.W.2d 405 (Minn. 2003)