A federal appellate court ruling could require Manitex International Inc to pay two insurers a total of USD1.9 million over 20 years.

The Bridgeview-based materials handling equipment manufacturer and crane distributor intends to file a petition for a rehearing of the decision in the New Orleans, Louisiana-based US Court of Appeals for the fifth circuit.

Manitex's insurance carrier, Colony National Insurance Co of Richmond, Virginia, denied coverage to Manitex for two product liability claims relating to legacy JLG products that Manitex no longer sells or supports. The second insurer, Lexington Insurance Co of Boston, Massachusetts, provides excess coverage of the Colony policy and joined the suit.

"Manitex has become liable to make combined payments of USD95,000 annually to the two plaintiffs over a 20-year period without interest," Manitex says in a statement. "Manitex expects to record a one-time exceptional expense of approximately USD0.8 million, net, after-tax, against its fourth quarter and full year 2011 GAAP financial results".

Colony National sued Manitex LLC, Manitex Inc., Manitex Skycrane LLC, Quantum Equipment LLC formerly known as Quantum Heavy Equipment LLC, Quantum Value Management LLC, Quantum Value Partners LP and JLG Industries Inc on 2 October 2009 in the US District Court in Austin, Texas.

On 8 December 2009, Lexington Insurance filed an intervention motion that was granted. Colony and Lexington contend their policies do not cover the defense of JLG in the underlying product liability litigation. Lexington Insurance is an operation within the Chartis Inc division of publicly traded American International Group Inc.

On 16 November 2010, the district court granted a Manitex motion for summary judgment, finding that Colony did have a duty to defend the two product liability claims.

On 21 February 2012, the appellate court reversed the district court's decision and determined that the insurance companies did not have an obligation to defend these two product liability suits.

Publicly traded Manitex makes boom truck cranes, rough-terrain forklifts, container handling equipment and special mission vehicles and distributes truck and rough-terrain cranes and material handlers.