Judge Says Insurer Liable for $43 Million Libby Settlement
A Montana State District Judge has ordered a Nebraska-based insurance company to pay $43 million to address a settlement between that state and the hordes of people sickened by exposure to W. R. Grace’s tainted vermiculite in the town of Libby, site of one of the country’s worst environmental disasters.
The decision involves National Indemnity Company, which provided general liability insurance to the state of Montana between 1973 and 1975.
The company, part of Warren Buffet’s Berkshire conglomerate, argued that those particular insurance policies didn’t cover the asbestos-related claims made by hundreds and hundreds of individuals sickened by the mine.
Judge Holly Brown disagreed, saying in a state district court ruling on March 1 that National Indemnity “breached its duty to defend the state” from the many lawsuits related to the Libby mine, which closed in 1999.
Berkshire, the parent company of National Indemnity, “has taken on growing responsibility for asbestos-related insurance claims in recent years,” explains the Wall Street Journal. “Insurers including Liberty Mutual and American International Group Inc. have paid Berkshire billions of dollars to take responsibility for future asbestos claims tied to past policies, in an arrangement known as retroactive reinsurance.”
“Berkshire benefits from these deals and a host of other insurance businesses because they add to the company’s ‘float,’ premium money that it holds to pay claims in the future and can invest and profit from in the meantime,” explains a recent article about the court decision.
Montana had reached a $43 million settlement in 2009 and a $25 million settlement last year with people injured by asbestos at the mining operation in the town that was once home to a thriving logging industry.
Libby was also a popular destination for hunters and anglers at one time, though most visitors to Montana chose not to step foot in the town anymore.
Victims of asbestos diseases claim the state knew the mine was unsafe for decades yet allowed it to keep operating and failed to protect workers.
That’s why the judge ruled that National Indemnity is responsible for the $43 million settlement and any new settlements that have been approved since then, as well as the state’s defense costs since 2005.
There is also indication that they will likely be responsible for the $25 million settlement approved last year, so the full cost to National Indemnity could be much greater than $43 million.
“We are pleased with the recent decision,” said a spokesperson for the state of Montana. “It’s a step in the right direction, but there are still some more steps to come, and we’re looking forward to what’s next.”
National Indemnity now has a right to appeal the decision in the Montana Supreme Court.