Asbestos illness is a disease and not a bodily accident injury covered by workers' compensation policies, the United States Court of Appeals, Fifth Circuit, has ruled.
The decision, by a three-judge panel of the New Orleans-based court, upheld a lower court decision in Louisiana in the case of Graphic Packaging International Inc. v. Employers Insurance of Wausau.
Under their ruling there is an exclusion for "bodily injury by disease" found in workers' compensation employers liability policies issued by Employers Insurance based in Wausau, Wis.
The case developed in 2000 when Graphic Packaging International Inc., Marietta, Ga., made a $1.5 million settlement with 260 former and current employees who claimed they were injured by exposure to asbestos at the company's paperboard manufacturing plant in Louisiana.
When the employees filed suit, the company was known as Riverwood International Corp.
Wausau, which had not provided coverage after 1984, denied the Graphic company's claims for "bodily injury by disease" citing policy language, which described "bodily injury by disease" claims as excludable from coverage if not brought within 36 months after the end of the policy period.
Graphic filed suit against Wausau arguing that the language is ambiguous because the policy itself does not define the word "accident."
The appeals court found that "an asbestos-related disease does not constitute a 'bodily injury by accident'" and the policy language is supported by Louisiana case law.
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