## Facts

- Keene Corporation manufactured and sold asbestos-containing products for many years and was sued by numerous claimants alleging asbestos-related disease.
- Keene carried successive comprehensive general liability (CGL) policies from multiple insurers across different years.
- The policies generally promised to pay “all sums” Keene became legally obligated to pay as damages because of “bodily injury” caused by an “occurrence,” provided the bodily injury “occurs during the policy period.”
- Medical evidence showed asbestos-related diseases are progressive, involving injury from initial inhalation through a latency period and culminating in clinical manifestation.
- Keene tendered defense and indemnity to multiple insurers; insurers disputed when “bodily injury” occurs and argued their policies were not triggered (or were triggered only at a single stage such as exposure or manifestation).
- The district court found coverage but allocated liability pro rata, requiring Keene to bear a share for periods when it had no insurance.
- Keene and various insurers appealed.

## Issues

1. For progressive asbestos-related disease, when does “bodily injury” occur under CGL policies—at exposure, during progression/latency, at manifestation, or across multiple stages?
2. If multiple policy periods are triggered, must liability be allocated pro rata among triggered insurers, or may the insured recover “all sums” from any one triggered insurer (subject to limits)?
3. May the insured be assigned a pro rata share of liability for years in which it carried no insurance?

## Decision

- The court held that asbestos-related “bodily injury” occurs continuously from initial exposure through disease progression and manifestation; each policy in effect during any part of that process is triggered.
- Each triggered insurer must defend suits alleging such injuries and indemnify Keene for “all sums” it is legally obligated to pay as damages, up to that policy’s limits.
- The court rejected allocating a pro rata share to Keene for uninsured periods; Keene does not become proportionately liable merely because it lacked coverage in certain years.
- “Other insurance” provisions may govern contribution among insurers, but they do not reduce the insured’s ability to obtain full coverage from a triggered insurer within policy limits.
- The court reversed in part and remanded to eliminate the district court’s pro rata allocation to Keene for uninsured years and to apply the court’s coverage and allocation rulings.

## Legal Principles

- For long-latency, progressive diseases, “bodily injury” under occurrence-based CGL policies may be treated as a continuous process, triggering every policy on the risk from exposure through manifestation.
- Where policy language obligates the insurer to pay “all sums” because of covered bodily injury occurring during the policy period, a triggered insurer can be required to respond to the entire loss (up to limits), leaving insurer-to-insurer contribution to other-insurance clauses and related doctrines.
- Absent policy language requiring time-on-the-risk allocation, courts should not impose pro rata allocation on the insured for uninsured periods.
- Ambiguities in standard-form insurance contracts are construed against the insurer, and coverage is interpreted consistent with the insured’s reasonable expectations.
- The duty to defend is triggered when allegations potentially fall within coverage; for continuous injuries, each triggered insurer owes a defense, subject to the policy’s terms and limits.

## Conclusion

The court adopted a continuous-trigger approach for asbestos-related injuries and an “all sums” allocation rule: every policy in effect from exposure through manifestation is triggered, any triggered insurer must defend and indemnify up to its limits, and the insured is not assigned a pro rata share for uninsured years, with contribution disputes left to insurers under other-insurance provisions.


Keene Corp. v. Ins. Co. of N. Am., 667 F.2d 1034 (D.C. Cir. 1981)