The Supreme Court's decision to pass on reviewing a Fourth Circuit ruling that revived coverage for a wood treatment product maker's chemical exposure suit left policyholders empowered with a broad duty to defend that carriers say goes too far.

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Raymond Mascia of Anderson Kill, who represents policyholders, said that the Fourth Circuit's decision fairly interpreted Hawaii law's position that extrinsic evidence alleging a covered claim can trigger coverage. For him, the panel's decision is a recognition that the purpose of a liability policy is litigation insurance, and that insurers should step up when developments in the litigation trigger a duty to defend.

"Pleadings are not always perfect, and I think this decision recognizes that a policyholder should not be penalized simply because the claimant's complaint doesn't perfectly state a covered claim," he said.

He noted that plaintiffs in cases like asbestos claims often don't provide all of the details underpinning their claims right away, instead adding dates of exposure and other information are after an action is initiated.

"So it makes sense that in these types of cases, you would go to extrinsic evidence to really understand what the plaintiff is alleging in the complaint, because the complaints often don't provide all those details," he said.

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