What Is a Manifestation Trigger?
A manifestation trigger in an insurance policy activates coverage for an event when it is discovered by the policyholder rather than the date when it occurred.
- The manifestation trigger is one of four dates that may be used to pinpoint the timing of a covered event or injury.
- It is used when the actual date of the event cannot be determined.
- An injury-in-fact trigger may be used if the date is known.
For example, if a winter storm knocks a tree onto a homeowner’s house while the family is away on vacation, the insurance coverage is triggered on the date that the homeowner discovers the damage. The date of the incident may be unknown.
Understanding the Manifestation Trigger
For an insurance company and its customers, identifying the date a covered event occurred can be complicated. The relevant fact is that a covered incident was reported and is recorded with the claim. A reported event may be recorded to an insurer under any of four triggers:
- The manifestation trigger, as noted, sets the date of incident discovery as the date to be recorded on the claim.
- The exposure trigger uses the date when an injured party first came into harmful contact.
- The continuous trigger applies when the damage or injury occurs over a period of time.
- The injury-in-fact trigger is used if the date of an injury or damage is known.
This can be complicated if a policyholder changes policies when the new policy goes into effect sometime between when the event occurred and when it was discovered.
The trigger can be crucial in clarifying the responsible party when an insurance client has changed insurers.
When It Matters
It may seem like splitting hairs, but the question of the relevant date for a claim of insurance coverage has proved a thorny one for the courts.
Consider the case of Don's Building Supply, a Texas wholesaler of exterior insulation and finish systems that were installed on various homes built between late 1993 and late 1996. While the homes were being constructed, Don's was insured by three consecutive general liability policies issued by OneBeacon.
Various homeowners filed suit against Don's from 2003 to 2005, alleging the insulation was defective and had allowed moisture to seep inside the homes, resulting in rot and other damage.
The homeowners argued that the damage began to occur in six months to a year after installation, while the insurance policies were in effect. However, the damage was hidden from view and became apparent only after the policy period ended.
The case eventually went to the Texas Supreme Court. The question, as paraphrased by the Supreme Court, was: "Is an insurer’s duty to defend triggered where damage is alleged to have occurred during the policy period but was inherently undiscoverable until after the policy period expired?” The court's answer was yes. The key date that triggered coverage was when the injury occurred, not when the homeowner discovered it. The insurer was responsible.