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A recent New Jersey trial court decision confirmed expansive coverage for commercial general liability policyholders entrenched in construction defect litigation involving continuous and progressive property damage.
New Jersey applies the “continuous trigger” method to insurance coverage claims involving progressive and indivisible injuries, as discussed in our treatise, Policyholder’s Guide to the Law of Insurance Coverage (see § 3.02[B][2]). Under this doctrine, insurance coverage is triggered in each insurance policy year from initial exposure to the injury’s manifestation. Originally stemming from asbestos exposure claims, this doctrine was later extended to environmental contamination claims, and ultimately constructive defect cases. New Jersey courts recognized that the public policies implicated by the progressive nature of asbestos exposure were likewise germane to construction defect matters, where property damage can be latent, undetected, and gradually worsening over time.
So-called “non-cumulation” clauses sometimes factor into “trigger” disputes. These clauses vary in wording, and they may not be explicitly labeled as such. These clauses can have the effect of collapsing coverage for damages occurring across multiple policy periods into a single policy year. In connection with environmental contamination claims, New Jersey courts find these clauses to be incompatible with the continuous-trigger doctrine and therefore unenforceable.1
In Northfield Mass Associates, LLC v. The Travelers Indem. Co., decided in late October 2025, a New Jersey trial court found non-cumulation clauses likewise unenforceable in the context of property damage resulting from construction defect claims.2
The coverage dispute in Northfield arose from construction defect litigation alleging property damage at a condominium complex caused by latent water infiltration, among other things. Various insurers denied coverage to plaintiff Northfield for this litigation, asserting, among other things, application of non-cumulation and non-cumulation-type clauses, including those labeled as: Pre-Existing Injury or Damage Exclusions; Continuing or Ongoing Damage Exclusions; and Prior Injury exclusions. Coverage litigation ensued, and plaintiffs thereafter moved for a declaration (1) that these clauses were, indeed, non-cumulation clauses; and (2) these clauses are unenforceable under New Jersey’s continuous-trigger theory, particularly in the context of progressive and indivisible construction defect damage.
The court agreed, holding that “the public policy underlying application of the continuous trigger to toxic or environmental contamination applies with equal force to cases involving construction defects.” Perhaps most importantly, the court found the clauses at issue—although not explicitly labeled as such—were indeed “non-cumulation” clauses and therefore incompatible with the continuous trigger doctrine because “they would bar coverage for any damage not originating within the specific policy year, regardless of [the damage’s] progressive or indivisible character.”
This decision may prove an important tool in a New Jersey policyholder’s tool belt when faced with construction defect litigation, or possibly any litigation involving long-tail or progressive injury or damage. More broadly, it exemplifies New Jersey’s willingness to look to the effect of an insurance clause or exclusion, and not only its technical characterization, in deciding enforceability.
Footnotes
1 Spaulding Composites Co. v. Aetna Cas. & Sur. Co., 176 N.J. 25 (2003).
2 Northfield Mass Associates, LLC v. The Travelers Indem. Co., No. ESX-L-1080-22, 2025 WL 3145237 (N.J. Super. L. Oct. 30, 2025).
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