In Arceneaux, et al., v. AmStar Corp., et al., 2015-0588 (La. 9/7/16), 200 So.3d 277, 2016 WL 4699163 (La., 9/7/16).
The Louisiana Supreme Court allocated the costs of defending long legacy disease claims between the insured and insured based upon a on a time-on-the risk-allocation model. Under existing Louisiana law, an insurer’s duty to indemnify was to be pro rated among insurance carriers based on a time-on-the risk-approach between the insurance carriers that were on the risk during periods of exposure to the injurious conditions. While the law in Louisiana was settled regarding time on-the-risk-allocation applying to indemnification, there was no Louisiana precedent on whether insurers’ 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 reasonable of the Sixth Circuit Court of Appeals in Insurance Co. of No. American v. Forty-Eight Insulations, Inc., 633 F.2d 1212 (6th Cir. 1980), clarified on r’hrg, 657 F.2d 814 (6th Cr. 1981), cert. denied (454 U.S. 1109 (1981)). The Louisiana Court found that the pro-rata allocation scheme was an equitable system.
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