Superfund Site Results in $3 Million Coverage Row

An Oregon Judge required RLI Insurance to reimburse three other insurers more than $2.9 million in defense costs surrounding litigation over a Portland Oregon Superfund site. The other insurers defended Northwest Pipe Co. in its litigation over the Superfund site after Northwest’s facility was identified as part of the superfund site by the EPA and state departments. Northwest’s insurers expended money in the required investigation of the site and facility as well as the defense to claims brought by the EPA and state agencies.

Northwest Pipe filed the current action in state court in 2009 after one of the insurers claimed there was no coverage of the environmental claims under its policy and RLI denied it had any duty to defend. The court found that RLI indeed had a duty to defend as it failed to show that any other insurer had a duty to indemnify the plaintiff. It also failed to prove that the property damage in question did not occur during the period at issue. Accordingly, the court found that RLI owed a defense.

Despite RLI’s arguments that other insurers were defending, the court found that RLI ‘s policy clearly defined its duty to defend, which was implicated by the damages at issue.

Northwest Pipe Co. v. RLI Insurance Co., United States District Court for the District of Oregon, Portland Division.