BNSF’s Ongoing Legal Battle with Zurich Over Asbestos Defense Cost

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BNSF's Ongoing Legal Battle with Zurich Over Asbestos Defense Costs

BNSF is steadfast in its assertion that Zurich American Insurance Co. should bear the financial burden of defending it against hundreds of asbestos exposure claims. This debate unfolded vividly during a session at the Texas Court of Appeals on Tuesday, where the stakes were high for defining the scope of insurance liability in environmental exposure cases.

BNSF Zurich Asbestos Cases: Understanding the Crux of the Dispute

The origins of the conflict trace back to Libby, Montana, a site notorious for its asbestos-contaminated vermiculite mine. Over decades, this contamination led to widespread health issues among the town’s residents, culminating in numerous lawsuits against Burlington Northern & Santa Fe Railway Co. (BNSF). The railway, having transported the hazardous material, is now facing a formidable legal challenge, with Zurich at the center of its insurance claims.

BNSF Zurich Asbestos Cases: Legal Arguments on Display

The court proceedings highlighted a pivotal disagreement: whether each asbestos exposure should be treated as a separate incident under Zurich’s insurance policies, the earliest of which dates back to 1965. BNSF’s legal team argued that the multifaceted nature of the exposures necessitates a division into distinct occurrences, each warranting coverage under Zurich’s obligations. Conversely, Zurich maintained that the claims fall under a collective occurrence, thus limiting their financial responsibility due to the exhaustion of the per-occurrence liability cap.