Litigation and Regulatory Compliance



Insurance News - Chinese Drywall

August 9, 2009 Advisory

A rash of lawsuits have recently been filed for alleged damages due to drywall originating from China. As with every new type of class or mass action suit brought by the plaintiffs' bar, the question always posed is whether this is the next asbestos, a tidal wave of litigation with potentially devastating exposure. Unless some new evidence emerges or the alleged fact pattern changes, the answer appears to be "No, Chinese drywall is not the next asbestos." Nor does it appear to be the next silica, welding rod, or even mold litigation.

The implications of these Chinese drywall suits are still evolving, and the ultimate scope of the litigation remains to be seen. However, we suggest that insurers take note because issues raised in the Chinese drywall lawsuits implicate a number of lines of coverage, both personal and commercial.