Occurrence Analysis in First-Party Insurance

In contrast, a “continuous trigger” theory, which is applied by some courts in third-party liability cases to determine what policies respond, provides that all insurers on the risk from the beginning of the loss to the time it manifests owe coverage. The considerations that sometimes lead courts to apply a continuous trigger in the third-party liability context ' chief among them, the interests of an injured third-party who had no role in negotiating the insurance policy but who may be reliant upon it for appropriate compensation ' simply do not exist in first-party property claims.

Although there is a wide body of case law and commentary recognizing and reinforcing these distinctions under the laws of California, New York and several other jurisdictions, opinions issued in two recent cases arising in Wisconsin have erroneously assumed, without actually examining the issue, that principles applicable in the third-party liability context may be applied without modification to first-party property claims. This article reviews key principles that guide a thoughtful analysis in the first-party context when addressing physical loss or damage that may span multiple policy periods, and the issues that could arise if the first-party/third-party distinction is overlooked in favor of a one-size-fits-all approach.