Category Archives: Environmental Insurance

Does EPA Have Authority to Promulgate Cumulative Risk Assessment Guidance?

Last week, Inside EPA (subscription required) reported that the Texas Commission on Environmental Quality has basically informed EPA that EPA may not promulgate guidance on cumulative risk assessments because of questions about its legal authority to require CRAs. 

If EPA plans to interpret such environmental regulations as providing EPA with the authority to require that states consider CRAs in its decision making, including CRAs that may include nonchemical stressors,… More

AIG Bows Out of the Pollution Legal Liability Market

On Tuesday, insurance giant AIG announced a major restructuring designed to make it a “more profitable and focused insurer.” Apparently as a result of these efforts to streamline and slim down, AIG has begun notifying holders of itsAIG Pollution Legal Liability insurance that it will no longer be underwriting new policies.  Existing policies will be honored, but renewal will not be available.  AIG will reportedly continue to write Contractors Pollution Liability and Environmental and General Liability Exposure policies.… More

Be Careful With Pollution Insurance Coverage Disclosures – How Conditions Actually Disclosed Were Deemed Not Disclosed

A Massachusetts company learned the hard way that you need to pay close attention to policy endorsements when you negotiate them. In Market Forge Industries, Inc. v. Indian Harbor Insurance Company, the Appeals Court of Massachusetts held, in an unpublished decision, that a Pollution and Remediation Legal Liability Policy did not cover the costs of cleaning up certain pollution because the “Pollution Conditions” were not specifically listed in the “Known Conditions” endorsement.… More

Is the Absolute Pollution Exclusion Absolute? It Depends on Which State Answers the Question

The battle over the scope of the absolute pollution exclusion in general liability policies continues to be fought in the context of defective drywall manufactured in China.  An earlier blog entry discussed a Virginia court that had concluded that there was no coverage for defective drywall claims, rejecting decisions from a number of states that had ruled that the absolute pollution exclusion should be limited to industrial pollution claims, … More

Do Liability Policies, Particularly Pollution Liability Insurance Policies, Exclude Coverage for All Injunctions? The Fifth Circuit Says No.

The Fifth Circuit handed down an important decision last week, Louisiana Generating LLC v. Illinois Union Insurance Company, clarifying the scope of coverage under a Premises Pollution Liability Insurance Policy.  The policyholder sought coverage for a Clean Air Act suit by the United States alleging unpermitted major modifications that resulted in increased emissions of  sulfur dioxide and nitrogen oxide.  The insurer disputed coverage on the ground that the government under the Clean Air Act was seeking not remediation costs or compensatory damages but an injunction to repair emission control equipment to comply with regulatory standards.  … More

Words Matter — Settlement Agreements Should be Enforced As Written

Sometimes you read a decision and it’s hard to understand how there really were two plausible sides to the dispute.    Arrowood Indemnity Company v The Lubrizol Corporation is one such a decision.  There, a policyholder sold back its liability coverage for claims “arising out of” certain named environmental sites.  When the policyholder subsequently received a PRP notice letter for a site that included a property that had allegedly been contaminated by waste migrating from one of the named environmental sites,… More

The Intersection of Subrogation and Environmental Law — The Ninth Circuit’s Tyranny of Logic over Common Sense

In a decision that exalts casuistry over common sense, the Ninth Circuit recently held that an insurer who reimbursed $2.4 million in CERCLA response costs to its policyholder had no subrogation rights against the potentially responsible parties that actually caused the contamination in the first place.  That holding turns upside down the most basic principles of insurance law.

Chubb Custom Insurance Company v. Space Systems/Loral involved an assisted-living facility which was built on a former manufacturing facility that had been operated and allegedly contaminated with VOCs by Ford. … More

Sudden and Accidental Pollution in Massachusetts — Not Always Fatal To Coverage

In some jurisdictions, an environmental claim under a liability policy with a “sudden and accidental” pollution exclusion has the same prospect of success as a due process claim under the strict scrutiny standard — strict in theory, fatal in practice.  In Massachusetts, however, sudden and accidental pollution exclusions have sometimes been less fatal, as evidenced by the recent decision in Narragansett Electric Company v. American Home Assurance Company. … More