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 whether the policy’s total pollution exclusion applied. The Doerr test requires an insurer to refer to the allegations in the underlying complaint to prove 1) the insured is a “polluter”, 2) the injury-causing substance is a “pollutant,” and 3) there was a “discharge, dispersal, seepage, migration, release or escape” of the pollutant.
Total pollution exclusions are extremely prohibitive for policyholders because they eliminate coverage for virtually all pollution incidents, but this decision reinforces that policyholders may still have a path to coverage.
Dec 09, 2016
William S. Bennett