Manifestation Trigger

The manifestation trigger activates insurance coverage under the policy in place when the personal injury or property damage becomes known by the property owner or victim.

The manifestation trigger is an important concept in insurance because it sets the date of incident discovery as the date for coverage, not when the incident may have actually occurred. For example, if a winter storm knocks a tree on a homeowner’s house while the homeowner is on vacation, the triggering date for the policy is when the homeowner first detects and reports the accident, not the date the tree hit the house.

A complicating factor for insurance claims is that it can be argued insurance coverage should apply as soon as the damage first occurred, regardless of when it was first discovered. The problem with this is oftentimes the homeowner can only speculate as to when the damage may have first occurred. This is further complicated because people change policies and it is possible a new policy may have been taken out between when the event occurred and when it was discovered.

The three other types of insurance triggers are the exposure trigger, continuous trigger and injury-in-fact trigger. The exposure trigger uses the date when an injured party first came into harmful contact. The continuous trigger applies when damage or injury may have more than one trigger occurring at numerous points in time, while the injury-in-fact trigger applies on the date an injury or damage takes place.

Don's Building Supply in Texas sold exterior insulation and finish systems that were installed on various homes between December 1, 1993, and December 1, 1996. During construction, Don's was insured by three consecutive general liability policies issued by OneBeacon. Various homeowners filed suit against Don's from 2003 to 2005, alleging the insulation was defective and allowed moisture to seep inside, resulting in rot and other damage.

The homeowners argued the ongoing moisture exposure was damaging the homes and the damage began to occur on the occasion of first penetration of moisture, which was within six months to one year after application. The homeowners argued that the damage to the homes was hidden from view and not discoverable or readily apparent to someone looking at that surface until after the policy period ended. 

The case eventually went to the Texas Supreme Court. The issue, as paraphrased by the Supreme Court, was “is an insurer’s duty to defend triggered where damage is alleged to have occurred during the policy period but was inherently undiscoverable until after the policy period expired?” The answer was yes, the key date is when injury happens, not when someone happens upon it.