Celia Jackson and Rich DeNatale Author Article on General Liability Policies

This article, authored by San Francisco insurance special counsel Celia Jackson and San Francisco insurance partner Rich DeNatale, discusses commercial general liability policies and the California Supreme Court's recent ruling in State of California v. Continental Insurance. An excerpt from the article is included below.

The question of stacking has been hotly litigated and has enormous ramifications for both policyholders and insurers. Consider the following example: A large manufacturing company buys, each year, primary insurance with $5 million in limits and excess insurance with an additional $20 million in limits. It is sued for environmental cleanup damages, based on allegations that its manufacturing operations have caused soil and groundwater contamination over a period of 10 years. If the policyholder is permitted to stack its policies, it would have $250 million in insurance to cover its potential liability. If stacking is not allowed, the policyholder would have only $25 million in coverage — the policy limits for a single year — which could leave it vastly underinsured.