The South Carolina Court of Appeals found that a Completed Operations Hazard And Products Hazard Exclusion did not bar coverage for a mesothelioma victim exposed to asbestos at home. Covil Corp. v. Pa. Nat'l Mut. Cas. Ins. Co., No. 2020-001239, 2022 S.C. App. LEXIS 1 (S.C. Ct. App. Jan. 5, 2022).
The insured, an asbestos installer, was sued by an individual who alleged he contracted mesothelioma due to exposure to his step-father who worked for the insured. The exposure was alleged to have occurred at their home. The insured's insurer denied coverage, asserting that the Completed Operations Hazard And Products Hazard Exclusion in the policy barred coverage. The insurer concluded that while it applied to bodily injury that arises out of the insured's product, since the exposure occurred away from the insured's premises after the physical possession of the products had been relinquished, coverage was excluded.
The court disagreed, and noted that the risk insured by the exclusion is the possibility that the product will cause bodily injury or property damage other than the product or completed work itself. Thus, it concluded that the exclusion applied only when injury was caused by a defective product placed into the stream of commerce, or when the injury was caused by an insured's completed work and that neither had occurred.
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