Employers’ Liability for Mesothelioma Claims in the UK – Are You Covered?

The United Kingdom Supreme Court recently handed down a decision in what is known as the EL Trigger case, wherein the Court has finally decided which Employers’ Liability (“EL”) policy or policies should respond to indemnify an employer for mesothelioma claims by employees who were exposed to asbestos at the employer’s premises. This issue has been hotly disputed by some insurers for a number of years and has led to great uncertainty and additional risk for UK companies. In short, the decision of the Supreme Court is that EL policies that are written on an “injury sustained” or “injury contracted” basis will respond to mesothelioma claims by reference to the date of the employee’s exposure to asbestos in the workplace, rather than the date that the employee’s tumor is deemed to have begun — as previously had been decided by the Court of Appeal. Significantly, the date of exposure will be many years, and likely many decades, prior to the date of the deemed commencement of the tumor.

While the Supreme Court judgment gives more certainty about which EL policy should respond than existed previously, it potentially increases the prospect that a UK company facing such claims will be uninsured because it cannot locate the old EL policies in force during the period of the employee’s exposure to asbestos, or because no such policies were purchased back then (EL insurance was not compulsory in England until 1972) or because the EL insurer is now insolvent.