## Facts

- The State of California designed and operated the Stringfellow Acid Pits hazardous waste disposal site from 1956 to 1972.
- Hazardous substances leaked and migrated offsite over time, causing progressive environmental contamination and property damage across many years.
- A federal court ordered the State to perform extensive cleanup and remediation.
- Multiple insurers issued the State excess/commercial general liability (CGL) policies between 1964 and 1976, including policies promising to pay “all sums” the insured became legally obligated to pay as damages because of property damage occurring during the policy period.
- The site was uninsured for certain years, including before 1963 and after 1978.
- The State sought indemnity from its insurers for cleanup liabilities tied to a long-tail loss developing continuously over multiple policy years.

## Issues

1. Whether continuous, progressively deteriorating property damage triggers coverage under all policies in effect during the period of ongoing damage.
2. Whether, under “all sums” CGL language, the insured may obtain indemnity for the entire continuous loss from any one triggered policy up to its limits, rather than only a time-on-the-risk share.
3. Whether the insured may stack limits across successive triggered policy years (all-sums-with-stacking) absent a clear anti-stacking provision.

## Decision

- The California Supreme Court affirmed the judgment permitting coverage under a continuous injury trigger for the long-tail property damage.
- The Court held that, once a policy is triggered by property damage occurring at some point during its period, the insurer’s duty to indemnify may extend to “all sums” the insured is obligated to pay because of the continuous loss, subject to policy limits.
- The Court approved an all-sums-with-stacking allocation approach, allowing the insured to access the limits of successive triggered policy years when the loss exceeds any single year’s available limits.
- The Court indicated that insurers may pursue equitable contribution or similar remedies among themselves after paying the insured.

## Legal Principles

- For continuous or progressively deteriorating property damage, all policies on the risk from the onset of damage through its continuation may be triggered, so long as damage occurred during each policy’s period.
- Under standard CGL language promising to pay “all sums” the insured becomes legally obligated to pay as damages because of property damage, a triggered insurer may be liable for the entire continuous loss up to its limits, absent policy language imposing pro rata allocation.
- Absent a clear anti-stacking clause, an insured may stack limits across successive triggered policies for a single continuous occurrence, applying one year’s limits and then proceeding to the next year if necessary.
- Inter-insurer allocation concerns are addressed primarily through equitable contribution, subrogation, or related doctrines, rather than by restricting the insured to pro rata recovery.

## Conclusion

The court held that continuous property damage triggers all policies in effect during the period of ongoing damage, that “all sums” indemnity allows the insured to recover the full continuous loss from any triggered policy up to its limits, and that the insured may stack limits across successive policy years unless the policies clearly prohibit stacking.


State of California v. Continental Ins. Co., 55 Cal. 4th 186 (Cal. 2012)