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Chemical Industry Council of California

CA Supreme Court Issues Sweeping Pro-Policyholder Decision on Environmental Liability Coverage


03/09/09

 

 

The California Supreme Court issued its decision in State of California v. Allstate Insurance Co., Case No. S149988. In this unanimous decision, the court resolved several issues in favor of the policyholder regarding the application of pollution exclusion provisions in the State's comprehensive general liability insurance policies. The case arises out of the State of California's liability for environmental contamination at the "Stringfellow Acid Pits," a state designed and operated waste-disposal facility in Riverside County, California.  The Court addressed:

 

        the relevant "discharge" for determining whether the "sudden and accidental" exception to the pollution exclusion applied and, therefore, reinstated coverage that otherwise would have been excluded;

 

        the court addressed whether an "absolute" pollution exclusion for discharges "into or upon any watercourse" precluded coverage;

 

        the court held that where there is a threatened "sudden and accidental" release of contaminants, the pollution exclusion does not bar coverage for liability arising from intentional releases performed in order to prevent a greater accidental release; and

 

        the court held that where indivisible property damage is caused by a combination of covered "sudden and accidental" releases and non-covered releases, the insured does not have to prove the amount of property damage caused by the covered releases.

 

The above information provided courtesy of CICC Member ReedSmith.

Read more. . . .

 

 

 

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