A New York appeals court on Thursday affirmed that an AIG unit must defend the Port Authority of New York and New Jersey and several contractors against asbestos claims brought by construction workers on the original World Trade Center, agreeing with a lower court that coverage is triggered for claims tied to alleged asbestos exposures at the building site.

In a brief opinion, a panel of the state Appellate Division’s First Department said a trial court got it right when it ruled last year that AIG unit American Home Assurance Co. is obligated to defend certain underlying asbestos claims against the Port Authority, construction manager Tishman Realty & Construction Co. Inc., aluminum producer Alcoa Inc. and now-defunct Mario & DiBono Plastering Co. Inc. under a liability policy it issued to the transportation agency in 1966.

American Home had taken the position that the policy's coverage is only triggered if a plaintiff's asbestos-related injury was actually diagnosed during the policy period, which spanned from 1966 to 1976. But New York Supreme Court Judge Eileen Bransten ruled — and the appellate panel agreed — that the insurer’s interpretation is inconsistent with the policy language, which establishes that coverage is triggered by claims of injuries "arising out of" building operations at the World Trade Center site, regardless of when those harms became apparent.

“[American Home’s] interpretation, which would limit coverage to injuries themselves occurring during the policy period, is not supported by that language and also is inconsistent with the broad ‘insuring agreement’ that requires [American Home] to pay ‘all sums’ that the insured becomes legally obligated to pay as damages for personal injuries ‘in connection with the construction of [the WTC project],’” the panel wrote in Thursday’s opinion.

Read more:  AIG Must Cover Port Authority Asbestos Claims, Court Affirms