The Travelers Companies have settled and fully resolved all current and future asbestos-related coverage claims against them relating to ACandS, Inc., once one of the nation's largest installers of asbestos-laden insulation. ACandS went bankrupt in 2002 after decades of litigation involving the product.
According to a release issued by the company, the settlement agreement calls for Travelers to contribute $365 million to a trust, with an additional $84 million coming from its reinsurers for a total of $449 million. The company reports that the cost of the settlement will come from existing asbestos reserves, which means it won't affect earnings.
Travelers has been embroiled in liability lawsuits with ACandS for almost two decades, mostly involving broad coverage for operations claims. Travelers originally sought to treat the asbestos operations as one occurrence, which would have limited its liability to $1 million (this amount was the per-occurrence limit). A court ruling in January 2006 ruled against this interpretation, exposing Travelers to near-limitless liability.
“ACandS has been one of our most significant and longest-standing asbestos exposures,” said Jay S. Fishman, chairman and CEO for Travelers, in a release. “Eliminating the uncertainty inherent in this litigation makes this a very good outcome for our company and our shareholders.”
Travelers said that the settlement is subject to a number of contingencies, including final court approval of both the settlement and a plan of reorganization for ACandS.
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