(Article from Insurance Law Alert, April 2026)
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Holding
Several courts in California have declined to dismiss, at the pleadings stage, coverage actions by stone manufacturers and distributors seeking defense and indemnity for hundreds of underlying lawsuits by workers alleging silicosis and related injuries from exposure to silica-containing dust released during stone fabrication. Arizona Tile, LLC v. Travelers Prop. Cas. Co. of Am., Case No. 25STCV02521 (Cal. Super. Ct. L.A. Cty. Mar. 10, 2026); C & C North Am., Inc. v. ACE Prop. and Cas. Ins. Co., Case No. 24STCV18642 (Cal. Super. Ct. L.A. Cty. Mar. 10, 2026); Sompo Am. Ins. Co. v. LX Hausys Am., Inc., 2025 U.S. Dist. LEXIS 271754 (C.D. Cal. Dec. 22, 2025); Hanover Am. Ins. Co. v. Francini, Inc., 2026 U.S. Dist. LEXIS 84338 (C.D. Cal. Mar. 31, 2026); Regent Ins. Co., et al. v. Cambria Enter., et al., No. 2:25-cv-4142 MRA (MAAx) (C.D. Cal. Mar. 31, 2026); Pac. Shore Stones, LLC, et al. v. Allied Prop. & Cas. Co., et al., 2026 U.S. Dist. LEXIS 86260 (C.D. Cal. Mar. 31, 2026); Surface Warehouse LP v. Charter Oak Fire Ins. Co., 2026 U.S. Dist. LEXIS 85579 (C.D. Cal. Mar. 31, 2026).
Background
More than 400 lawsuits nationwide allege that stoneworkers were exposed to respirable crystalline silica, metals, and organic compounds released from stone products containing 95-99% silica. The workers claim that the fabrication process generated large amounts of highly concentrated respirable silica dust which caused silicosis and related diseases.
The underlying defendants contend that their insurers owe a duty to defend and indemnify these claims. Insurers contend that coverage is barred by silica and/or pollution exclusions. In response, insureds argue that: (1) alleged exposures involve both silica and non-silica substances, rendering the silica exclusions inapplicable; (2) enforcing the exclusions would render coverage illusory; (3) pollution exclusions do not apply because the alleged release of toxic matter occurred within fabrication facilities and therefore does not constitute “traditional environmental pollution”; and (4) certain pollution exclusions requiring contractor involvement are not triggered. Insurers counter that: (1) the silica exclusions apply whether silica is the sole cause or not; (2) injuries are inherently tied to silica exposure; (3) the illusory coverage doctrine cannot override clear policy language; (4) California appellate courts have recognized industrial silica dust as pollution; and (5) the locational requirement of certain pollution exclusions is satisfied because fabrication occurred on behalf of insureds.
Decisions
A California state court declined to dismiss two coverage actions, finding that resolution of the exclusions requires evidence outside the pleadings. With respect to a silica exclusion barring coverage for bodily injury “arising out of or in any way related to” the “handling, contact with, exposure to or inhalation or respiration of silica or products or substances containing silica,” the court noted that application of the exclusion depends on facts such as whether insureds’ products contained silica, the scope of available products liability coverage, and the parties’ course of dealing. The courts stated that application of pollution exclusions similarly depends on factual questions regarding the extent of dust dispersion and, where applicable, whether stoneworkers were contractors or subcontractors working directly or indirectly on the insureds’ behalf.
Federal district courts in the Central District of California reached similar conclusions, denying insurers’ motions for judgment on the pleadings, either in whole or in part. With respect to certain silica exclusions barring coverage for injury arising in whole or in part out of silica or silica-related dust, these courts emphasized that, under the concurrent proximate cause doctrine, where injuries arise from both silica and non-silica matter, coverage cannot be excluded at this stage. They also noted that certain broad silica exclusions barring coverage for injury related to a product or substance containing silica could render coverage illusory if applied strictly based on current allegations. Notably, however, the courts granted judgment on the pleadings where silica exclusions barred coverage for claims involving non-silica substances that are part of any claim or suit alleging silica-based injuries. Rulings on the pollution exclusions were largely consistent with the state court decisions. In several cases, insurers have sought interlocutory appellate review, which remains pending.
Comments
These cases raise significant issues regarding the interpretation of silica and pollution exclusions in commercial general liability policies. The determination of whether the concurrent proximate cause and “illusory” coverage doctrines are applicable may shape the resolution of current and future disputes involving insurers’ duties to defend and indemnify silica-related claims.