Option Clause in General Refractories' Policy Enough to Defeat Summary Judgment

PHILADELPHIA - An option clause in an insurance policy that states the insurer would pay asbestos-related court costs only on condition that it consented to them renders the policy ambiguous and leaves open the question of whether the insurer has an obligation to cover the insured's defense costs, a federal court has ruled. General Refractories Co., v. Federal Insurance Co., et al., No. 00-5508 (E.D. Pa.).

In an opinion issued Dec. 6, U.S. District Court Judge Herbert J. Hutton of the Eastern District of Pennsylvania ruled that the option clause and resulting ambiguity is sufficient to defeat a motion for …