After the Zurich American Insurance Co (ZAIC) in Missouri, USA paid out a claim on wrongful death from asbestos exposure, it sought a contribution from Insurance Company of North America (INA). The claim for contribution failed because the INA policy had a pollution exclusion but the principles of contribution between insurers were discussed.
The facts were unusual. A man who had been exposed to asbestos fibres and dust at work brought the substances home on his clothes resulting in his wife’s death. ZAIC paid $1.5 million in damages. ZAIC insured the employer from 1972 to 1980 and INA from 1980 to 1996 but the INA policy had a pollution exclusion for the ‘discharge, dispersal, release or escape of irritants, contaminants or pollutants into the atmosphere’.
In the state of Missouri a claim for contribution is based on equity. According to the equitable contribution principle an insurer who pays more than its share of the claim is able to recover the excess from the other insurer based on equitable subrogation and unjust enrichment provided both policies cover the same loss. In the ordinary course, as consecutive insurers of the employer, both insurers should have contributed to the loss. It was held however that the asbestos which was picked up by the husband whilst working was an irritant or contaminant or pollutant and that it had been released into ‘the atmosphere’ despite ZAIC’s unavailing argument that it was released inside a building and therefore not into the atmosphere.
Because the INA policy included the pollution exclusion, ZAIC was not entitled to a contribution because the INA policy was never obliged to pay.
In South African law the right of contribution is based on the principle of indemnity. Where one or two or more persons responsible for the same loss indemnifies the claimant it is entitled to a contribution from the other parties who are liable for the same debt.