Jury Awards $52.5 Million Against Insurer in Asbestos Case

A jury has awarded $52.5 million to a Roseville, Minn., construction company that sued its Boston-based insurer for failing to defend it against hundreds of personal injury and wrongful death claims tied to asbestos exposure.

“The big message is you cannot mistreat your policyholders who went out and bought that insurance for protection,” said API’s attorney, John Faricy Jr.

Attorneys for OneBeacon Insurance Co. of Boston did not comment when contacted. But the insurer could file motions with District Judge John Finley to set aside or reduce the verdict.

The jury awarded API $27.5 million for breach of contract, $10 million for operating in bad faith and $15 million for breach of duty.

API installed building insulation that included asbestos. The dispute centered on the existence and terms of insurance policies from 1958 to 1966. Starting in the 1980s, API was hit with more than 700 lawsuits alleging wrongful death and injury due to asbestos.

API hired investigators to locate evidence of insurance. They never found policies but did uncover records indicating that the construction company was covered by General Accident Insurance Co. API then filed claims with that company’s successor, OneBeacon, which denied the existence of the policies and then disputed the extent of the coverage.

When API filed for Chapter 11 bankruptcy in January, it said OneBeacon’s denial of coverage had forced it to pay out $41 million to settle asbestos claims.