Insurers Clash Over $157M Montana Asbestos Settlement Costs
National Indemnity and TIG Insurance dispute payment responsibilities in Montana asbestos settlement.
Why it matters: Understanding insurer disputes over reimbursement helps legal professionals navigate environmental liability and complex settlement frameworks involving reinsurers.
- National Indemnity insured Montana from 1973-1975 and settled asbestos claims for $157 million in 2022.
- National Indemnity billed reinsurers over $101 million, but TIG Insurance paid only $12.7 million.
- National Indemnity demands TIG pay $44.5 million, claiming one-third of costs.
- Trial between National Indemnity and TIG began November 9, 2026, in Omaha, Nebraska.
The dispute involves National Indemnity Company, which insured the state of Montana from July 1, 1973, to July 1, 1975, and TIG Insurance Company, its reinsurer during the same period. In 2022, Montana and National Indemnity agreed on a $157 million settlement addressing claims related to widespread asbestos contamination caused by vermiculite mining at the W.R. Grace & Co. mine near Libby, Montana.
The contamination led to thousands of workers and residents suffering lung disease, prompting the U.S. Environmental Protection Agency to declare a public health emergency during a 2009 Superfund cleanup.
National Indemnity billed its reinsurers over $101 million for the settlement and related defense costs. However, TIG has paid only $12.7 million, asserting that amount fulfills its obligations. National Indemnity counters that TIG should bear one-third of the costs — approximately $44.5 million. The settlement includes 27 agreed occurrences at $3 million each totaling $81 million, plus about $76 million in defense costs.
The conflicting interpretations have led to litigation. Scott L. Davis, attorney for TIG, accused National Indemnity of breaching its duties to Montana and unfairly shifting costs to TIG. Conversely, Michael Knoerzer, representing National Indemnity, maintains TIG declined to associate with the claims when notified.
The insurance dispute entered trial on November 9, 2026, in Omaha, Nebraska, highlighting the complex challenges in allocating responsibility in multi-layered environmental tort settlements involving multiple insurers and reinsurers. The case underscores the importance of clear contractual terms and timely communications within reinsurance frameworks tied to historical environmental liabilities.
By the numbers:
- $157 million — total asbestos settlement between Montana and National Indemnity in 2022
- $101 million — amount National Indemnity billed reinsurers for settlement and defense costs
- $12.7 million — payment made by TIG Insurance to National Indemnity
- 27 occurrences at $3 million each — part of the settlement totaling $81 million
Yes, but: The detailed terms and conditions of the reinsurance contracts remain undisclosed, complicating clear assignment of payment obligations.
What's next: The trial proceedings in Omaha will clarify reinsurer responsibilities and may influence future settlements in similar complex environmental liability cases.