Pro Rata v. All Sums: When Viking Pump Applies

The United States Court of Appeals for the Second Circuit recently changed the tune of a decades-old insurance coverage dispute when it decided to apportion liability exposure for multiple instances of environmental contamination on an “all sums” basis.

In the matter of Olin v. OneBeacon, Olin, a manufacturing company, sought indemnity for remediation costs and other sums related to pollution cleanup at five of its manufacturing sites under several excess general liability policies. OneBeacon insured Olin under three excess umbrella insurance policies, each …

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Injuries Caused By a Gas Explosion Covered By Pollution Liability Policy

In Acuity, A Mut. Ins. Co. v. Chartis Specialty Ins. Co., 2015 WI 28, P52 (Wis. 2015), the Wisconsin Supreme Court has held that a pollution liability policy issued by Chartis Specialty Insurance Co., covered lawsuits alleging property damage and bodily injury caused by a natural gas line explosion. The policy, held by a construction company, was found to be implicated because natural gas is a pollutant and contaminant, the escape of which was a “pollution condition” within the meaning of the policy. The …

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Where There is Fire, There is Smoke

In Hobson v. Indian Harbor Insurance Co., No. 316714, 2015 WL 1069242 (Mich. Ct. App. Mar. 10, 2015), the appellate court in Michigan rejected the insurers’ interpretation of the pollution exclusion in the landlord’s commercial general liability (“CGL”) insurance policy to deny the tenants’ bodily injury claim.

The dispute arose when the plaintiffs sustained bodily injuries from a fire that broke out in the apartment building where they resided. Subsequently, the plaintiffs sued the landlord and its insurers, alleging that the fire was caused …

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No Further Information Required: 10th Circuit Confirms Clear Pollution Exclusion and Rejects Insured’s Attempts to Introduce Extrinsic Evidence

This environmental coverage action involved a determination of the insurers’ obligations to reimburse the policyholder for its litigation costs arising from an action commenced by over 400 Chesapeake, Virginia landowners.  The landowners alleged a golf course developer caused personal injury and property damage through the use of contaminated fly-ash material during the construction of a nearby golf course.

The policyholder was insured under seven commercial general liability policies that required the insurers to reimburse Headwaters for expenses associated with lawsuits that occurred during the policy …

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Second Circuit Holds Insurer Need Not Show Prejudice to Assert Late Notice Where Policy Issued Outside of New York

In Indian Harbor Insurance Co. v. City of San Diego (2d Cir., No. 13-4244-cv, Oct. 2, 2014), the Second Circuit affirmed summary judgment in favor of Indian Harbor, finding based on a late notice defense that Indian Harbor had no duty to indemnify the City for three pollution claims.  The main issue was whether New York Insurance Law § 3420(a)(5) applied and required Indian Harbor to prove prejudice as a result of the City’s untimely notice.

The policy in question, a pollution and remediation legal …

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Fifth Circuit Rejects Argument That Total Pollution Exclusion Creates Illusory Coverage

The Fifth Circuit affirmed the district court’s grant of summary judgment in favor of Liberty Mutual, finding that Liberty Mutual had no duty to defend or indemnify Linn Energy in connection with the underlying lawsuit, which alleged leakage of saltwater, brine and other contaminants from Linn Energy’s pipeline onto the complainants’ properties.  Notably, the Liberty Mutual policy issued to Linn Energy contained an Underground Resources and Equipment Coverage endorsement, which included in the definition of “property damage” damage to particular types of underground resources.  Nonetheless, …

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Carbon Monoxide Poisoning Deemed Traditional Pollution Precluding Coverage Under Policy’s Pollution Exclusion

This environmental coverage action involved a Church pastor and his wife’s exposure to carbon monoxide from the Church’s heating system resulting in the death of the pastor, and the court’s interpretation as to the application of the policy’s pollution exclusion.  Specifically, the insurer commenced a declaratory action seeking a determination that the policies’ pollution exclusions precluded any duty to defend or indemnify the Church with respect to the pastors’ estates’ claims and issued a reservation of rights denying coverage on the basis of those exclusions.…

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Insurer Prevails On Applicability Of Pollution Exclusion – Release Not Sudden or Accidental

This environmental coverage action arises out of the historic contamination of a parcel with various solvents and toxic waste disposed in unlined pits at the property.  Specifically, Northrop acknowledges using the property, which later became known as Bethpage Community Park (BCP), for the disposal of sludge from an on-site industrial wastewater treatment plant and from waste oils that contained residual amounts of TCE, other solvents and PCB’s since 1948.

Later, in the 1960’s, the company donated the property to the Town of Oyster Bay and …

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Texas Supreme Court to Rule on BP-Transocean Coverage Dispute

(Tex. Sept. 6, 2013) 

The Texas Supreme Court announced Friday that it would enter the fight over $750 million in insurance coverage for the catastrophic BP oil spill that occurred in April 2010.

This past March, the Fifth Circuit rule on the scope of BP’s additional insured coverage under excess policies issued to Transocean. The Fifth Circuit ruled that “where an additional insured provision is separate from and additional to an indemnity provision, the scope of the insurance requirement is not limited by the indemnity …

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Pollution Policy’s Late Notice Requirement In Buy-Back Provision Upheld Regardless Of Prejudice

Starr Indemnity & Liability Co. v. SGS Petroleum Service Corp.
(5th Cir., June 18, 2013)

This environmental coverage action arises from a dispute on as to the notice provision involving a pollution occurrence and whether the policyholder was required to show prejudice before denying coverage as required by a pollution buy-back provision in the policy.

Specifically, Starr’s excess coverage policy contained an absolute pollution exclusion clause.  However, the parties negotiated a buy-back provision which deleted the original pollution exclusion and replaced it with a …

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