There has been a landmark decision by the California Court of Appeal that now makes it possible for policyholders (including dry cleaners, chemical manufacturers, waste disposal companies, etc.) to use all the historical insurance policies they can find to defend them against claims for progressive property damage or personal injuries that might have started years ago.

On January 5, 2009,the court held that a policyholder facing long-term property damage or personal injury claims may be entitled to indemnity under all years of insurance policies that were in effect while the damage to soil and groundwater was taking place. State of California v. Continental Ins. Co., 09 Cal. Daily Op. Serv. 161.The Court overturned a 2004 ruling thata policyholder could not “stack” or combine its successive years of policy limits, but instead had to pick one year’s policies and demand payment under them. The Court held that each policy had an independent contractual liability to pay regardless of whether the State had purchased similar policies in other years that might also be obligated to pay.

This will mean that more policyholders in California will be looking to insurance archeology to find all of their lost policies. They will want to find the missing insurance for all the years of operation because now each year’s coverage is valuable.