An overview of emerging general liability insurance hazards

Much attention has been paid to the liabilities associated with opioids and per- and polyfluoroalkyl substances, or “PFAS,” but there are many other examples of emerging hazards.

This article provides an overview of certain new hazards and highlights some of the insurance coverage issues presented.

Talcum powder products

Claims have been asserted against manufacturers and sellers of talcum powder products (most notably, Johnson & Johnson) for injuries allegedly caused by use of baby powder, of which talc is a main ingredient.

Plaintiffs have alleged that talc contains asbestos or otherwise causes disease in its own right, specifically ovarian cancer and mesothelioma. Plaintiffs have asserted causes of action for negligence, products liability, breach of warranties and civil conspiracy. See Berg v. Johnson & Johnson Consumer for background.

The alleged connection between talc use and cancer has been hotly contested. As of July 2024, there are some 57,000 lawsuits pending that involve talc-related injuries, the majority of which are pending in a multidistrict litigation in New Jersey against Johnson & Johnson.

J&J has attempted to resolve these claims by transferring the liabilities to a newly formed subsidiary, LTL Management, LLC, and placing it in bankruptcy. But those efforts have been rejected twice by the courts.

Most recently, J&J proposed a $6.5 billion settlement to resolve all claims against it, in anticipation of filing a third, “pre-packaged,” bankruptcy proceeding for LTL. J&J’s talc supplier, Imerys Talc America, and its former parent, Cyprus Mines Corp., have also been the subject of lawsuits and have filed for bankruptcy.

Glyphosate (Roundup) and paraquat

There have also been numerous claims involving two herbicides, glyphosate (commercially known as Roundup) and paraquat.

Glyphosate is a form of herbicide manufactured by Monsanto and sold to consumers. In February 2020, the EPA issued a finding that there were no risks to human health when glyphosate was used as instructed.

Notwithstanding the EPA’s findings, the harmfulness of glyphosate is still disputed, with plaintiffs alleging that exposure to glyphosate causes non-Hodgkin’s lymphoma. To date, nearly 150,000 bodily injury lawsuits have been filed against Monsanto related to the use of Roundup, in which the plaintiffs have asserted causes of action based on strict products liability, false advertising, and other claims. Monsanto has settled approximately 100,000 of the suits at a cost of $11 billion.

Paraquat has been the subject of similar lawsuits. Paraquat has been classified as “restricted use,” herbicide, meaning that only licensed applicators may use the product. Although causation is hotly contested, claimants are alleging that their use of paraquat have caused them to develop Parkinson’s Disease. The lawsuits have also been consolidated in an MDL and allege causes of action including failure to warn, misrepresentation of product safety, and negligence.

There has also been coverage litigation in Delaware relating to paraquat claims.

Chemical hair relaxers

Hair relaxers are a group of cosmetic products most commonly used by African American women. Plaintiffs allege that hair relaxer products contain very high levels of endocrine-disrupting chemicals (EDCs), which interfere with the body’s hormone receptors.

Lawsuits involving hair relaxers have been consolidated in an MDL, which currently involves about 8,000 Plaintiffs. The complaint asserts causes of action for, inter alia, negligence, strict product liability, failure to warn, breach of warranty, fraudulent misrepresentation/concealment, and unfair or deceptive trade practices.

Microplastics

Concerns have emerged over the use of plastics in products and their potential impact on the environment and human health. This includes concern over “microplastics,” which are incorporated in health and beauty products as microbeads, or which form from plastic disintegration.

Lawsuits have been filed against manufacturers of plastic baby bottles and sippy cups alleging that they leach microplastics and cause injury to children’s digestive tracts, immune systems, and reproductive systems. Plaintiffs also allege that the advertising of such products is misleading.

Multiple lawsuits also have been filed against manufacturers of bottled water alleging they misled consumers by labeling their products as “natural,” even though they contain microplastics.

Also, government entities have sued companies for allegedly contaminating the environment with plastics and microplastics. These cases involve claims for violations of environmental and consumer laws, negligence, nuisance and trespass, and seek compensatory and punitive damages and injunctive relief.

Lead cables

In July 2023, a Wall Street Journal Investigation claimed that, “AT&T, Verizon and other telecom giants have left behind a sprawling network of cables covered in toxic lead that stretches across the United States, under the water, in the soil and on poles overhead.”

The news organization’s investigation reportedly found thousands of these discarded telephone cables throughout the United States and suggested that they were leaching lead into major rivers and public waterways. The EPA has been completing site evaluations across the country to determine the level of lead exposure in these areas.

Telecom companies dispute the findings of the WSJ article. Various lawsuits have been filed against telecom companies alleging negligence, public nuisance and violations of environmental statutes. Coverage litigation involving these claims also has been filed in Georgia and New York.

Potential coverage issues

These emerging hazards potentially raise a host of coverage issues under CGL policies. The following is a list of some major issues insurers may confront in addressing these claims:

• Occurrence/Expected or Intended Injury: To the extent these claims involve allegations the insured knew of the potential for its product to cause harm and concealed the information from consumers, the issue of whether such conduct constitutes an “occurrence” or falls within the terms of an “expected or intended injury” exclusion may arise.
• Advertising Injury: Many of these claims allege that manufacturers misrepresented the safety of their products in advertising. Whether such conduct involves “advertising injury” on the theory that it impliedly disparages competitors’ products, or whether coverage is barred by the exclusion for the product’s “failure to conform” to statements about its quality, or on other grounds, will likely arise.
• Covered “Damages”:  Many of the suits seek fines, statutory penalties, punitive damages, and injunctive relief. These types of relief may not be covered “as damages” under CGL policies depending upon the applicable law.
• Pollution Exclusions: Claims for injury or damage caused by exposure to or releases of chemical substances raises the question of the application of pollution exclusions. Whether these exclusions apply in each case depends upon the circumstances of the release of the alleged “pollutant,” the language of the exclusions, and the applicable state’s law. Some courts decline to apply pollution exclusions when the injury is not the result of so-called “traditional environmental pollution,” particularly in the bodily injury context,
• Trigger and Allocation: Coverage under CGL policies is “triggered” by the happening of bodily injury or property damage during the policy period. Whenever a new substance is alleged to cause injury, it raises the question of how and when such injury occurs so as to “trigger” coverage. Courts generally apply one of three trigger theories, “continuous trigger,” “injury in fact,” and “manifestation.” Which trigger theory will apply usually depends upon the facts concerning the disease or injury process and the applicable state law.

Finally, because many of these emerging claims involve exposure to allegedly harmful substances over time, the issue of allocation of covered damages necessarily arises. The allocation method that will apply, whether a form of “pro rata” allocation or “all sums” allocation, will depend upon the language of the policies and the applicable state law.

No doubt other coverage issues will arise as more claims involving these emerging hazards are asserted.

Robert F. Walsh is partner and chair of the insurance coverage and bad faith practice group, and Gianna Martorano is an associate within this group. Members of the firm’s insurance coverage and bad faith group have the combined experience of representing insurance company clients in matters involving environmental, asbestos, toxic tort and long-tail claims, among others. They can be reached at walshr@whiteandwilliams.com and martoranog@whiteandwilliams.com, respectively.

Visit The Legal Intelligencer to read this article with links to relevant caselaw.

See also: FC&S editors’ favorite commercial insurance coverage questions of 2023