Zurich, XL among Imerys Talc liability insurers

Imerys Talc America, burdened with liabilities allegedly tied to asbestos-tainted talcum powder, may use an estimated $709mn in coverage from insurers including Zurich North America and XL, according to filings in the company’s bankruptcy case.

The talc producer, a major supplier for Johnson & Johnson’s iconic baby powder, filed for bankruptcy along with two subsidiaries last week in wake of an onslaught of legal claims and judgments linking the product to ovarian cancer and mesothelioma. 

Although both Johnson & Johnson and the mineral producer dispute those findings, Imerys Talc America and affiliates face more than 14,000 personal injury cases and “lack the financial wherewithal” to litigate them, the company’s CFO Alexandra Picard stated in a 13 February court filing.

In the filing, Picard said Imerys Talc America has about $529mn in coverage available for ovarian cancer liabilities, with $492mn coming from Zurich North America. 

An additional $37mn in primary general liability and umbrella coverage is available from XL Insurance America, according to Picard, although “each of the XL policies contains an endorsement that purports to exclude coverage for injuries caused by exposure to asbestos”.

For mesothelioma claims, Imerys Talc America says it has approximately $180mn in coverage available from umbrella and excess policies dating back to the 1960s from the American Insurance Company. 

More coverage may be available from policies issued decades ago to Standard Oil (Indiana), which the company that became Imerys Talc America was once affiliated with, according to the filing. Picard said the company “lacks knowledge” of the specifics of those policies.

“The debtors have been and continue to be committed to the quality and safety of their products above all else,” Picard noted in the filing. 

“Nevertheless, the substantial increase in alleged talc claims in the last few years, combined with the current state of the US tort system, has led to overwhelming projected litigation costs (net of insurance) that the debtors cannot sustain in the long term.”

Imerys Talc America’s bankruptcy follows a surge of litigation focusing on Johnson & Johnson’s talcum powder products. In lawsuits, women allege that their use of talcum powder for hygiene purposes caused ovarian cancer, potentially from trace amounts of asbestos. In other cases, talcum powder users alleged the product caused them to develop mesothelioma, a rare lung cancer linked to asbestos exposure.

Many baby powder-related cases against Johnson & Johnson also name Imerys units as defendants, Picard said in her filing.

In July 2018, Johnson & Johnson was hit with a $4.7bn verdict in a Missouri case brought on behalf of 22 women who blamed their ovarian cancer on the use of baby powder. The Imerys unit separately settled claims against it in that case for at least $5mn, according to Bloomberg. 

Johnson & Johnson disputed the jury’s findings and asserts that its products are safe and do not contain asbestos. 

Zurich had no immediate comment. and XL declined to comment.