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Category: Environmental


Washington Supreme Court Issues Groundbreaking Pro-Policyholder Pollution DecisionMay 12, 2017

The Washington Supreme Court recently extended the efficient proximate cause doctrine – commonplace in first-party insurance – to a commercial general liability (“CGL”) pollution claim. In doing so, the court determined that the negligent installation of a water heater, rather than the carbon monoxide emitted therefrom, was the proximate cause of injury and could not be excluded via a pollution exclusion. Describing the rule of efficient proximate cause, the court…

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Travelers’ 3rd Circ. Win Curbs Insurers’ Asbestos ExposureApr 28, 2017

In breaking news this week, LAW360.com posted that the Third Circuit ruled Friday that “a common exclusion found in a Travelers policy bars coverage for claims arising out of asbestos in any form, limiting insurers’ potential exposure to asbestos injury claims by precluding policyholders from arguing that the exclusionary language is ambiguous and doesn’t extend to products containing the carcinogen.” In its detailed analysis of the decision, LAW360 turned to…

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District of Oregon Predicts Oregon’s Place in “Plain Meaning” Pollution CampMar 27, 2017

The Federal District Court for the District of Oregon recently decided that Carbon Monoxide constitutes a pollutant within the meaning of a pollution exclusion in a Commercial General Liability (“CGL”) policy. In Colony Ins. Co. v. Victory Constr. LLC, No. 3:16-cv-00457-HZ (Mar. 14, 2017), the District Court considered whether there was coverage for a pool company that allegedly failed to warn of the “risks of carbon monoxide poisoning associated with…

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Louisiana District Court Declines to Apply Total Pollution ExclusionDec 09, 2016

The United States District Court for the Eastern District of Louisiana recently decided that a broad total pollution exclusion in a marine general liability policy did not bar coverage. The insurer could not unambiguously establish, based on the facts of the underlying case, that waste from a shipyard’s sandblasting activities met the requirements of the exclusion. The court found that the insurer could not meet Louisiana’s three-part test to determine…

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New Case Alert: California Federal Court Allows Policy Stacking to Cover Continuous InjuryNov 16, 2016

”Stacking” is a practice that is very favorable for policyholders, especially in environmental coverage cases involving extended pollution events. It allows a policyholder to combine the limits of multiple consecutive policies to cover continuous injury claims occurring over multiple policy periods. Without stacking, insurers can limit a policyholder’s recovery to a single policy limit. The Eastern District of California recently decided that a policyholder could stack the limits of six…

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Minnesota District Court Broadly Interprets Pollution ExclusionOct 25, 2016

The Minnesota Federal District Court recently decided against coverage for the release of carbon monoxide from a boat’s engine compartment due to a general liability policy’s pollution exclusion. This case and others demonstrate the need for policyholders to closely examine their insurance programs to ensure they fill all of the coverage gaps created by the pollution exclusion in their general liability policy. For more information about how each jurisdiction approaches…

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Something Stinks – But It Isn’t This Alabama District Court RulingOct 21, 2016

As our State by State Survey on CGL Pollution Exclusions shows, the definition of the word “pollutant” can be ambiguous in the insurance context. Recently, an Alabama federal judge held that sewage was not a pollutant for purposes of the pollution exclusion in a CGL policy. This is a positive result for policyholders, and is part of what we hope is a positive trend towards courts limiting the pollution exclusion…

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New York Clarifies Continuous Trigger Coverage Where Not All Years Are Covered by PoliciesSep 28, 2016

The New York Appellate Division recently ruled that insurers who are “on the risk” in extended environmental claims do not have to contribute to years when there was no coverage available in the marketplace for the insured to purchase. In Keyspan Gas E. Corp. v. Century Indem Co. Index No. 604715/97 (1st Dept. Sept. 1, 2016), the court considered whether Century owed any indemnification to Keyspan for years when the…

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New Jersey Jumps On Board: EPA PRP Letters are a “Suit” Under a CGL PolicySep 01, 2016

Good news for policyholders in New Jersey. A New Jersey Superior Court judge has joined the majority of states in finding that Environmental Protection Agency “potentially responsible party” letters constitute a suit under a commercial general liability policy. This is a big win for policyholders, because it entitles them to a defense from their insurer beginning with the issuance of a PRP letter in the often enormously expensive to defend…

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Policyholders Entitled to Qualified Counsel in Superfund Actions, Even if More Expensive Than Local MarketJun 02, 2016

Qualified local environmental defense lawyers can be hard to find when the EPA cracks down on a Superfund site. These disputes can involve a huge number of parties, leaving implicated companies with few or no viable legal options in their area. Although coverage is likely available for defense of the Superfund action, insurance companies may dispute a policyholder’s retention of a more expensive out-of-market defense counsel. Schnitzer Steel Industries was…

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Superfund Informational Request Triggers Duty to DefendMay 19, 2016

Policyholders may remember when it was groundbreaking for courts to characterize the EPA’s Potentially Responsible Party letters as a “suit,” triggering the duty to defend under a Commercial General Liability policy. Going a step further in favor of policyholders, the Ninth Circuit recently determined that EPA informational request letters should also be characterized as a “suit.” In 2008, Ash Grove Cement Company received an EPA informational request letter concerning contamination at…

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Georgia’s Supreme Court Extends CGL Pollution Exclusion to Lead Paint ChipsMay 03, 2016

The “pollution exclusion” contained in an insured’s policy was at issue in a recent case in Georgia (Georgia Farm Bureau Mutual Insurance Co. v. Smith et al., 2016 Ga. LEXIS 245). Georgia Farm presents a relatively straightforward dispute regarding the pollution exclusion. The insured owned a residential house that he rented to a tenant and her infant daughter. The tenant’s daughter became ill after she ate paint chips from the…

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New York Court Provides Relief to Policyholder in Multiple Decade Pollution CaseMay 02, 2016

Did you know that insurance coverage issues can arise from events that took place over 100 years ago? The Long Island Lighting Company (“LILCO”), now owned by National Grid, has been involved in a coverage battle with its insurer, Century Indemnity, since 1997 over coverage for pollution resulting from its Community Gasworks Facilities, all of which were closed by 1930. The facilities, which produced coal gas for lighting, created coal…

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Texas Court Rules EPA Proceedings Trigger Duty to DefendFeb 04, 2016

In a significant win for policyholders, the Texas Supreme Court refused to revisit its 5-4 decision that a Potentially Responsible Party (PRP) letter from the U.S. Environmental Protection Agency constitutes a “suit” within the meaning of the Commercial General Liability policy.  The decision entitles policyholders to a defense under the policy. The decision came in McGinnes Industrial Maintenance Corp. v. The Phoenix Insurance Co. et. al. and solidified the court’s…

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Read our New State by State Survey on CGL Pollution ExclusionsJan 26, 2016

SDV is proud to introduce a new State by State survey showing each state’s interpretation of the CGL pollution exclusion. Some courts adopt a narrow construction, limiting the exclusion to “traditional” environmental contaminants (such as toxic waste). Other courts adopt a broad construction, applying the exclusion to any substance that can be considered an irritant or contaminant (including materials found in nature, and everyday cleaning products). The interpretation of the…

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