No Coverage Available For Lead Paint Related Injuries

This coverage action arises from a dispute regarding the applicability of a total pollution exclusion contained in a commercial general liability policy.  The insurer, Cumberland, relied on the exclusion in denying coverage for a suit involving alleged negligent removal of lead paint from a residence causing injury to a child.  The plaintiff asserted that the subject total pollution exclusion does not apply to lead-based injuries that are not traditional environmental contamination.

Cumberland denied coverage for the underlying suit based on the total pollution exclusion advising there was no coverage because the lawsuit was based on the allegation of the release of a “pollutant” as a result of the remediation work performed.  The insurer further asserted that the total pollution exclusion endorsement contained in its policy was analogous to similar pollution exclusion clauses that Delaware courts have found to be unambiguous and valid; that lead is a “pollutant” as defined in the policy; that the underlying claims alleged a release of lead paint that caused the resultant injury; and that total pollution exclusions are not limited to only traditional environmental pollution.

Conversely, Farm Family (as subrogee) asserted that Cumberland had a duty to provide coverage as the subject exclusion in ambiguous, as a matter of law; that other courts are split as to the application of the pollution exclusion to injuries resulting from residential lead paint exposure, which is indicative of the ambiguity of the exclusion; and that another inclusion expressly addressing lead contamination demonstrates that the more general total pollution exclusion was not intended to apply to lead claims.

Upon analysis, the court acknowledged that no Delaware court has addressed the applicability of a total pollution exclusion in the context of residential lead contamination.  However, the court held that under a strict interpretation of the policy terms, lead and lead paint met the criteria of being a “pollutant.”  In addition, the court found that the terms regarding the release or discharge of a pollutant to be unambiguous such that the allegations of negligent abatement in the complaint adequately alleged a method of travel required to trigger the exclusion.

As to the issue of the exclusions applicability outside the traditional environmental context, the court held that notwithstanding the lack of unanimity between jurisdictions, it would “not insert such a restriction” that the event be of a traditional environmental nature.  Specifically, it noted that the policy does not contain any limiting language that the pollution must occur in an outdoor environmental setting.  Also, the court did not interpret the presence of the lead contamination exclusion as demonstrating the parties’ intent that the total pollution exclusion not apply to lead paint.

Click below for a copy of the decision.
Farm Family Cas. Co. v. Cumberland Ins. Co., Inc.
(Delaware Superior Court, October 2, 2013)