Many of you might have either read or heard about the massive gas leak that affected thousands of residents of Porter Ranch, a suburb of Los Angeles. The gas leak emanating from a nearby underground gas storage facility (operated by the Southern California Gas Co.) purportedly has stopped after a fix, but not before causing an estimated 100,000 tons of methane to be emitted into the atmosphere. Many scientists are calling the Porter Ranch gas leak the biggest in U.S. history.
Is the clean-up of dead bodies covered under a standard homeowners policy?…
Continue Reading The Clean-Up of Dead Bodies Can be Covered by Insurance
While the word “pollutant” may be defined by an English dictionary, the meaning of the term is frequently litigated in cases where coverage is denied under a policy’s “pollutant” exclusion clause. Some believe that the clause provides an absolute exclusion for damages caused by any sort of pollutant, including asbestos, lead, or fumes from Chinese drywall. Others maintain that the exclusion only applies to certain kinds of pollution, like industrial waste or environmental pollutants. To make matters more complicated (or interesting, depending on how you look at it), “courts across the nation are hopelessly divided over whether the clause is ambiguous[.]”1
This blog may appeal to fans (I being one of them) of the almost ubiquitous Sriracha hot sauce. Sriracha has been in the news as of late and is in the center of a controversy over spicy odors emanating from its factory in Irwindale, California where the condiment is produced. The City of Irwindale has taken legal action to curb the further production of the hot sauce contending that fumes generated by roasting chili peppers for the sauce are causing residents headaches and eye/throat irritation. Although on this blog we write mostly about property insurance issues, touching on concerns of homeowners and business owners, I momentarily digress. Following this Sriracha story has prompted me to wonder whether the company would be covered under its general liability policy if nuisance claims are made by the city or its residents.
Continue Reading Offensive Odors and the Pollution Exclusion
In my last blog post, “Pollutant” Exclusions in Property Insurance Policies, Part 1, I mentioned how a policy’s "pollutant" exclusion may be broader than one might think. In this post I will address the first question that logically comes to mind – what is a "pollutant"?
This is the first of a series of blog entries where I will examine the relationship between pollutants and first-party property insurance claims. I will be focusing on the different circumstances where coverage disputes have arisen as a result of the pollutant exclusion found in many of today’s homeowners and commercial property insurance policies.
Last week, I wrote about how California courts are interpreting Additional Living Expenses provisions. In the instance of ALE, courts have held that policies should be interpreted according to a layperson’s reasonable understanding. California courts are taking the same approach in applying property policy exclusions.
Policyholders in Colorado beware, Colorado’s Appeals Court recently determined that sewage is a pollutant, and that the Absolute Pollution Exclusion, found in many property and liability policies, unambiguously excludes property damages and injuries arising from sewage.
Continue Reading The Foul Smell of the Absolute Pollution Exclusion
This morning’s edition of Business Insurance has an article, Claims Could Get Messy After Huge, Costly Oil Spill, which explains that insurance claims are going to be complex and that the cost will certainly be in the billions. My reading of a FC&S discussion on the issue of "pollution" exclusions in homeowners policies indicates the same thing. Indeed, given the definition of a "pollutant" in the standard form policies, one may question whether oil escaping in a natural form would be a "pollutant."
First party property coverage may exist under some common form property insurance policies for losses caused by the oil spill. While I have been rather pessimistic regarding the possibility of first party insurance companies sending legions of claims adjusters to help oil catastrophe policyholders, there appears to be some coverage available, and possibly, a lot more, depending on what the cause of the loss is eventually determined to be. These facts are important. Each coverage form is important as well and must be reviewed in detail.