California time of “occurrence”

In Pennsylvania General Ins. Co. v. American Safety Indem. Co., No. D054522 (Cal. Ct. App. 4th Dist. June 28, 2010), Pennsylvania General sought equitable contribution from subsequent insurer American Safety for defense and indemnity incurred by Pennsylvania General on behalf of a mutual insured.  The American Safety policy was endorsed to (1) amend the definition of “occurrence” to require that the “occurrence” occur during the policy period, (2) deem any “property damage” occurring during the policy period which began prior to the policy period to have occurred prior to the policy period, and (3) exclude coverage for any “occurrence” which occurred prior to the policy period, even if it continues during the policy period.  American Safety denied coverage on the basis that the insured’s defective work constituted the “occurrence” and the insured completed its work prior to the inception of the American Safety policy. The trial court entered summary judgment for American Safety.   On appeal, the intermediate court of appeals reversed, holding that the changes to the American Safety policy did not unambiguously alter the “ordinary trigger of coverage” that an “occurrence” occurs at the time the damage occurs rather than at the time the wrongful act.  The court states that, rather than designed to require the causal wrongful act to occur during the policy period, the changes were instead designed to avoid the Montrose progressive injury continuous trigger.  The court remanded to the trial court for  a determination as to when the “property damage” first commenced.