Hold the Salt – Mine Claim Collapses Over Failure to Provide Notice


The plaintiff-insured, Lyons Salt Company, is a Kansas corporation that owns and operates a massive salt mine in Lyons, Kansas. B.S.C. Holding, Inc. is the sole shareholder of Lyons Salt. The defendant-insurer, Lexington Insurance Company, issued eight consecutive policies of commercial property insurance to the plaintiffs from the years 2002 until 2010. The policies at issue, which were all substantially identical, constituted “all risk” insurance policies.

Beginning as early as October 7, 2004, technicians at Lyons identified higher than expected closure rates, indicating that …

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Court Rules Policyholder Arguments Do Not Hold Water

Grinnell Mut. Reinsurance Co. v. Hubbs
(Appellate Court ofIllinois, Third District, April 24, 2013)

This water resource/environmental coverage action arises from an underlying dispute involving the interference and damages from the divergence or obstruction of streams or surface water between landowners.  Specifically, plaintiff insurer brought a declaratory judgment action against landowners who alleged damages to crop land caused by the policyholder’s alleged alteration of the flow and level of surface and groundwater following the policyholder’s construction of a holding pond on the property.

The insurer …

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Barriers Impede Recovery of Environmental Response Costs at Superfund Site

On April 26, 2013, Chubb Insurance Co. submitted a motion requesting an en banc rehearing of a ruling which was handed down by the Ninth Circuit in March 2013. The ruling held that an insurer was not permitted to recover environmental cleanup expenses through subrogation under the Comprehensive Environmental Response Compensation and Liability Act (CERLCA) aka Superfund.

In the initial lawsuit, Chubb brought an action in California Federal District Courtto recover money it had paid for the cleanup of hazardous substances in the soil and …

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Bad News for Insurers: Groundless Claims Must Be Defended

Illinois Tool Works Inc. et al. v. Travelers Casualty & Surety Co. et al.,
Circuit Court of Cook County, Illinois

In this insurance coverage action from the Circuit Court of Illinois, the plaintiffs, Illinois Tool Works, Inc. and ITW Finishing LLC (ITW) brought action against their insurers Travelers Casualty & Surety Co., the Travelers Indemnity Co. of Connecticut and Century Indemnity Co., (defendants) for insurance coverage in thousands of underlying toxic tort claims allegedly arising from exposure to harmful chemicals contained in the plaintiffs’

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Hazardous Environmental Contamination in Texas, and No Insurance Coverage

Arrowood Indemnity Co. v. The Lubrizol Corporation, et. al., 
United States District Court for the Northern District of Ohio Eastern Division, March 30, 2013

The defendant, The Lubrizol Corporation, a specialty chemicals company, released hazardous substances and/or arraigned for the disposal of hazardous substances at a site in Houston known as the Patrick Bayou Site. On September 5, 2002, acting pursuant to CERCLA (Superfund), the EPA placed the Patrick Bayou Site on the national priorities list, thus designating it a Superfund site. In 2002, …

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Ninth Circuit Denies Insurer’s CERCLA Subrogation Claims

Chubb Custom Ins. Co. v. Space Systems/Loral, Inc.
(9th Cir., March 15, 2013)

This environmental coverage/subrogation action arises from CERCLA clean-up of a contaminated site owned by Chubb’s insured, but formerly operated by Ford Aerospace, among others, resulting in volatile organic soil and groundwater contamination.  Chubb issued an environmental insurance policy to its insured, Taube-Koret covering remediation costs related to the former pollution releases at the property. Eventually, Chubb paid its insured $2.4 million as reimbursement of the cleanup costs.

Thereafter in 2009, Chubb …

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Fifth Circuit Reverses District Court, Holds BP Was Entitled to Additional Insured Coverage Under Insurer’s Policy for Environmental Claims

In Re: Deep Water Horizon; Ranger Ins. Ltd. v. TransOcean Offshore Deepwater Drilling, Inc. et. al. (5th Cir., March 1, 2013)

This environmental coverage action arises from the explosion and sinking of Transocean’s Deepwater Horizon oil platform in April 2010.  At issue were the obligations of Transocean’s primary and excess liability insurer to cover BP’s pollution-related environmental liabilities resulting from the ensuing oil spill.  Transocean owned the subject offshore oil platform and at the time of the incident and was engaged in exploratory drilling …

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Asbestos – England/Wales Court of Appeal Clarifies Employer’s Liability Insurer’s Obligations to Solvent Insured

International Energy Group Ltd v. Zurich Insurance Plc UK Branch [2013] EWCA Civ 39

Background Facts

IEG employed Mr. Carré for 27 years. During his employment, Mr. Carré was exposed to asbestos without adequate protection being provided. As a result, Mr. Carré contracted mesothelioma and died in 2008.

Zurich covered IEG for only six years out of the 27 years Mr. Carré was employed. The cover was in respect of any employee who “sustain any bodily injury […] caused during any period of insurance and …

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Mesothelioma sufferer successful in action against owner of factory, although factory owner was not employer



Mr. Baker was briefly employed by a company as a lagger’s labourer during the 1963-1964 tax year, when he was 16-years old. At that time, the company sent Mr. Baker to do a job at one of the factories of Tate & Lyle, the defendants in this action. When carrying out his job at Tate & Lyle’s factory, which lasted for about five weeks, Mr. Baker was exposed to substantial quantities of asbestos. Mr. Baker contracted …

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Eleventh Circuit Denies Coverage For Drywall Claims Based On Pollution Exclusions

Granite State Ins. Co. v. American Building Materials, Inc.
(11th Cir, January 3, 2013)
This environmental coverage dispute arises out of Chinese Drywall claims and the interpretation of coverage under six separate policies issued by the plaintiff.  Here, an insured alleged that another insured, American Building, supplied it with defective gypsum drywall manufactured in China for installation in residential homes in Florida. It was determined that the drywall was emitting unusual amounts of sulfide gases.

The court of appeals held that the damages …

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