NY’s Highest Court Holds “Unavailability Exception” Unavailable for Pro Rata Allocation

Policyholders must pick up the tab for pollution claims in years when insurance was unavailable for those risks, the New York Court of Appeals ruled on March 27, 2018. In the closely-watched case KeySpan Gas East Corp. v. Munich Reinsurance Am., Inc., the first-impression ruling decisively decided the applicability of the “unavailability” rule in policies that mandate pro rata allocation in the context of continuous environmental contamination and other “long-tail” claims implicating many policy periods.

Under standard pro-rata allocation, the policyholder, rather than the …

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Air Pollution at Louisiana Big Cajun II Facility Prompts Duty to Defend

Louisiana Generating LLC v. Illinois Union Ins. Co.
United States Court of Appeals for the Fifth Circuit, May 15, 2013

Louisiana Generating LLC (LAGen) sought defense coverage from Illinois Union Ins. Co. (Illinois) in a suit brought against it by the EPA and the Louisiana Department of Environmental Quality for Clean Air Act and state environmental law violations. LAGen owns a coal-fired electric steam generating plant known as the Big Cajun II in Louisiana. In 2009, NRG, LAGen’s parent company, purchased a custom Premises Pollution …

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