Countertop Company Faces Flood of Injury Suits: Demands Insurer Coverage Amid Rising Claims

The countertop industry is facing a growing wave of personal injury lawsuits, forcing companies to grapple with significant financial and legal challenges. These suits often arise from installation mishaps, product defects, and, most alarmingly, health issues like silicosis among workers. As claims mount, countertop companies are increasingly turning to their insurance providers for coverage, leading to disputes over the scope and extent of that coverage. A recent case highlights this escalating conflict, raising critical questions about liability, worker safety, and the responsibilities of insurers.

The Rising Tide of Injury Claims

Countertop installation and manufacturing involve inherent risks. Accidents during installation can lead to property damage or bodily injury. Defective products can cause harm to consumers. Furthermore, the industry has seen a surge in silicosis cases, a debilitating and sometimes fatal lung disease caused by inhaling crystalline silica dust, particularly during the fabrication of engineered stone countertops.

Statistics to Consider:

A 2023 study found that 40% of workers exposed to silica dust in the countertop industry developed advanced silicosis, and 19% died from the disease.
OSHA notes that silica particles released during countertop fabrication are 100 times smaller than a grain of sand, making them easily inhaled without proper protection.

These statistics underscore the urgent need for stringent safety measures and highlight the potential for significant liability when those measures are lacking.

The Case in Point: MSI vs. Ironshore

A recent lawsuit filed by M S International Inc. (MSI), a major distributor of countertops and flooring, against Ironshore Specialty Insurance Co., a Liberty Mutual unit, exemplifies the growing tensions between countertop companies and their insurers. MSI is facing nearly 130 personal injury lawsuits, and a dispute arose when Ironshore, MSI’s insurer, allegedly reversed its initial position on coverage.

MSI argues that each lawsuit represents a separate “occurrence” because the injuries stem from different products, exposure times, and individual circumstances. Ironshore, however, has asserted that all the lawsuits constitute a single occurrence, potentially limiting the total coverage available to MSI. This disagreement hinges on the interpretation of “occurrence” within the insurance policy and has significant implications for MSI’s financial exposure.

The case draws upon the 2018 New York state appeals case, American Home Assurance Co. v. Port Authority of NY & NJ, which supports MSI’s argument. The court in that case concluded that claims constitute multiple occurrences when claimants are exposed to harmful materials in different ways, for different periods, and at different times and locations.

Understanding Insurance Coverage for Countertop Companies

Countertop companies typically rely on several types of insurance to protect their businesses:

General Liability Insurance: This is essential for protecting against unforeseen accidents and claims, covering costs associated with property damage or bodily injuries that may occur during installation. It can also cover claims of advertising injury, like libel, and slander.
Workers’ Compensation Insurance: This covers medical expenses and lost wages for employees injured on the job, which is particularly important given the physical demands and potential hazards of countertop work.
Product Liability Insurance: This protects against liability and damages resulting from the countertop products sold to clients.
Commercial Auto Insurance: This covers vehicles used for transporting materials and equipment.
Commercial Umbrella Insurance: This provides an extra layer of liability protection above the limits of the general liability, auto, or workers’ compensation policies.

The “Occurrence” Dispute:

The heart of the MSI vs. Ironshore case lies in the definition of “occurrence.” Insurance policies often define an occurrence as an accident, including continuous or repeated exposure to substantially the same general harmful conditions. Insurers may argue that multiple claims arising from similar conditions (e.g., silica exposure) constitute a single occurrence, limiting the total payout.

Countertop companies, on the other hand, may argue that each individual injury represents a separate occurrence, especially if the exposures and injuries vary significantly. This interpretation can substantially increase the available coverage.

Navigating the Legal Landscape: Advice for Countertop Companies

Given the increasing risk of injury claims and potential disputes with insurers, countertop companies should take proactive steps to protect their interests:

Review Insurance Policies: Carefully review all insurance policies to understand the scope of coverage, definitions of key terms like “occurrence,” and any exclusions that may apply.
Implement Robust Safety Measures: Invest in comprehensive safety protocols to minimize the risk of accidents and injuries. This includes providing workers with proper protective equipment, ensuring adequate ventilation, and training employees on safe handling practices.
Maintain Detailed Records: Keep meticulous records of all projects, including materials used, installation procedures, and safety measures taken. This documentation can be crucial in defending against claims and demonstrating due diligence.
Seek Legal Counsel: If facing a significant number of injury claims or a dispute with an insurer, consult with an experienced insurance coverage attorney. An attorney can help assess the merits of the claims, negotiate with the insurer, and, if necessary, litigate to protect the company’s rights.
Understand Countertop Installation Regulations: Ignorance of these regulations can lead to substandard installations, potential safety hazards, and even legal issues down the line.
Ensure the Durability and Safety of Countertops: Professional installers are responsible for making sure the countertop is installed correctly, which directly impacts its longevity and safety. They ensure that the countertop is securely fastened, reducing potential hazards, and guaranteeing the durability of the countertop.

Defenses Against Personal Injury Claims

In the event of a personal injury lawsuit, a countertop company has several potential defenses:

Comparative Fault: Argue that the plaintiff’s own negligence contributed to the injury, reducing the company’s liability.
Assumption of Risk: Show that the plaintiff was aware of the risks involved and voluntarily assumed them.
Statute of Limitations: Assert that the lawsuit was filed after the applicable statute of limitations had expired.
Pre-Existing Conditions: Demonstrate that the plaintiff’s injuries were caused by a pre-existing condition, rather than the company’s actions.
Challenge the Origin of the Product: Even if your company made and released the product, you could argue that you are not responsible for all of its parts. If your product worked fine otherwise, but there was a faulty gear or battery that originated from another manufacturer, you can argue that the liability truly belongs to them.

The Future of the Countertop Industry

The countertop industry faces a challenging future, with increasing scrutiny of safety practices and a growing number of injury claims. Companies that prioritize worker safety, maintain comprehensive insurance coverage, and proactively manage legal risks will be best positioned to thrive in this evolving landscape. The MSI vs. Ironshore case serves as a stark reminder of the potential financial and legal consequences of failing to address these critical issues. By taking proactive steps, countertop companies can protect their businesses and ensure a safer future for their workers and customers.