Navigation

Superfund Informational Request Triggers Duty to Defend

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 a Superfund site. Its insurers denied coverage, claiming there was no “suit.” The Ninth Circuit required the insurers, who issued policies between 1963-1969 and 1973-1986, to defend Ash Grove for the cost of response to the EPA’s request, which the court characterized as a “coercive information demand that is an attempt to gain an end through legal process and is therefore a suit.”

Superfund actions can go on indefinitely and require an expensive administrative defense, highlighting the value of having coverage even at the earliest stages of the process.

This represents a significant step in favor of policyholders. It also illustrates the value of saving old policies, even decades after the policy period ends.

If you receive a letter concerning contamination at a Superfund site, make sure you evaluate the coverage that may be available under your liability policies.

For more information about Ash Grove Cement Co. v. Liberty Mutual Ins. Co., No. 13-35900, D.C. No. 3:09-cv-00239-HZ (2016), read our Case Alert here.

 

WSB

May 19, 2016
William S. Bennett

Leave a Reply

Your email address will not be published. Required fields are marked *