In Arceneaux, et al. v. Amstar Corp., et al., 299 So.3d 277, 2015-0588(La., 9/7/16), the Louisiana Supreme Court allocated the costs of defending long legacy disease claims between the insurer and insured based on a time-on-the-risk allocation model. Under existing Louisiana law, an insurer’s duty to indemnify was to be prorated among insurance carriers based on a time-on-the-risk approach the insurance carriers that were on the risk during the period of exposure to the injurious conditions. While the law in Louisiana was settled regarding time-on-the-risk pro rata allocation applying to indemnification, there was no Louisiana precedent on whether the insurer’s duty to defend could also be pro rated among the insurers and the insured during periods of self-insurance in long latency disease cases. The Court then adopted the time-on-risk method of allocation for defense costs, adopting the reasoning of the Sixth Circuit United States Court of Appeals in Ins. Co. of North America v. Forty-Eight Insulations, Inc., 633 F.2d 1212 (6th Cir. 1980), clarified on re’hrg 657 F.2nd 814 (6th Cir. 1981), cert denied, 454 U.S. 1109 (1981). The Louisiana Court found that the pro rata allocated scheme was an equitable system.
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