What is Exposure Trigger

Exposure Trigger is an event that causes a policyholder’s insurance coverage to kick in. This is one of four triggers of coverage that determines when an injury or damage covered by an insurance policy occurred and whether the policy will pay for a related claim. The exposure trigger commonly applies in lawsuits claiming bodily harm because of the plaintiff’s exposure to a hazardous substance.

Understanding Exposure Trigger

It is often difficult to determine the specific time period when someone was harmed by a substance and who should be held responsible. That’s where the exposure trigger comes in. According to the International Risk Management Institute, the most common use of the exposure trigger is in asbestos lawsuits. In these cases, exposure is defined as the first time the plaintiff was exposed to and inhaled asbestos fibers.

Key Takeaways

  • Exposure triggers are coverage triggers for lawsuits that claim bodily harm due to plaintiff's exposure to hazardous substances.
  • Exposure triggers are generally used in asbestos lawsuits.
  • They can also be used in homeowner liability cases against home builders and contractors who use defective or harmful materials.

Asbestos Cases

Inhalation of asbestos fibers can be asymptomatic for years and later cause lung disease and a long, slow, painful and premature death. Because symptoms of asbestos exposure may not show up for decades, it can be difficult to establish who is responsible for the patient’s exposure.

Often, the person worked in a job that exposed him or her to asbestos, and the employer or the employer’s liability insurance company can be held responsible. Under the exposure trigger, liability is incurred at the date of exposure, not at the date when the injured worker first experiences symptoms. The trigger is important in these cases because it stipulates that the insurer which the employer used at the time of exposure is responsible. Or, if no insurance was in place at the time of exposure, the employer will have to remunerate the victim.

Classification of claims relating to asbestos exposure affects the final outcome of exposure trigger cases. For example, cases in which exposure trigger claims relate to products distributed or manufactured by the defendant may be subject to aggregate policy imits. However, claims cases relating to a policyholder's operations or facility are not subject to aggregate policy limits, meaning there is no limit to the amount of damages that can be claimed.

Exposure triggers also arise in building and homeowner liability cases. If, for example, defective building material is installed but damage isn't apparent until years later, responsibility could be laid to the insurer of record as of the installation date, or when the damage first starting occurring or the time when the claim was made.

Other Coverage Triggers

The other three types of coverage triggers are manifestation triggers, continuous triggers and injury-in-fact triggers. The manifestation trigger applies when the insured notices the damage; the continuous trigger applies when damage or injury may have more than one trigger that occurs at numerous points in time; and the injury-in-fact trigger applies when the injury or damage takes place. The type of trigger is important because it affects when liability begins and how much damage an employer, insurance company or other entity may be held responsible for.

Example of Exposure Trigger

An example of exposure trigger occurred in the case of Forty-Eight Insulations Inc., an Illinois-based manufacturer of high-quality insulation. From 1923 to 1970, the company produced insulation using asbestos. Workers in their plants inhaled the mineral, which can cause a wide variety of pulmonary complications. While the company stopped using asbestos in its products in 1970, workers who had inhaled the compound during their work hours began falling ill or passed away. Eventually, a spate of cases were filed against Forty-Eight. The cases alleged that the company knew about asbestos's harmful properties but failed to inform consumers and workers. The courts used exposure trigger to determine payout amounts. Eventually, Forty-Eight filed for bankruptcy in 1985.