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Travelers sued by Goodyear over asbestos liabilities

Goodyear Tire & Rubber Co has filed a lawsuit against Travelers over an alleged breach of contract relating to asbestos-related claims.

In a Pennsylvania District Court filing, the tyre manufacturing giant said that Travelers stopped paying indemnity costs after 28 January 2013 and is seeking a declaratory judgment on a variety of insurance policies issued up to 50 years ago.

The firm says it is subject to "tens of thousands of lawsuits" after claimants were made ill by exposure to asbestos-containing products made by Goodyear or on Goodyear's premises.

The dispute partly revolves around which Travelers insurer bore Goodyear's risks: Travelers Indemnity, Travelers Casualty, and/or Travelers Casualty's antecedent Aetna. Between 1961 and 1971, Aetna sold the US firm general liability cover, which insured it for "all sums which it shall become legally obligated to pay as damages because of bodily injury".

The policy also required Aetna to defend Goodyear against any action alleging injury, even if the claim was "groundless, false or fraudulent", the court filing stated.

Travelers Casualty bought Aetna's P&C business in 1996 and took on all its duties and obligations under the primary policies and the umbrella policy in place.

The limits have been exhausted by asbestos products claims, but the legal complaint alleges that Travelers Casualty has not honoured its due.

Between 1971 and 1977, Travelers Indemnity sold the tyre maker primary general liability cover, which obliges it to defend and indemnify Goodyear for injury claims. Between 1973 and 1980, the insurer also sold Goodyear umbrella coverage that sits directly above the primary policies until 1977.

The primary policies have per occurrence limits of $1mn between 1973 and 1976, and of $1.5mn between 1976 and 1977. After 1977 the umbrella policy sits directly above $1.5mn per occurrence deductibles.

Goodyear says all deductibles have been met and all per occurrence limits have been exhausted, but Travelers "has declined to honour its coverage obligations" due under the policies.

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